Judge upholds move to take $62 million from water group

CARSON CITY -- Clark County District Judge David Barker ruled Tuesday that Gov. Jim Gibbons and the Legislature had every legal right to take $62 million in Clean Water Coalition funds to balance the state budget.

Barker, sitting on the bench in Las Vegas, granted a summary judgment for Gibbons and the Legislature in which he ruled that political subdivisions such as the Clean Water Coalition are "mere instrumentalities of the state" and "each political subdivision remains subject to the overriding sovereign control of statutes enacted by the Legislature."

Facing more than an $800 million revenue shortfall, Gibbons and legislators during a special session in February approved several funding transfers, including passing a bill to take the Clean Water Coalition funds.

The Clark County Water Reclamation District and the cities of Las Vegas, Henderson and North Las Vegas formed the Clean Water Coalition in 2002 to develop a wastewater pipeline to Lake Mead.

The coalition earlier this year suspended preliminary work on pipeline project because declining growth and advances in sewage treatment have reduced the need for the project. Members voted to stop collecting connection fees from new homes and businesses that hook up to sewer systems in the valley. The fees were the source of the $62 million.

The M Resort in Henderson and other groups joined in the litigation. M Resort had paid $700,000 in fees to the Clean Water Coalition.

In his decision, Barker called the funding transfer "tantamount to legislative cannibalism" but pointed out that local governments and other political subdivisions do not have home rule.

"Rather the Legislature retains the power to regulate the internal affairs of all political subdivisions because of their essential nature … as political subdivisions of the state and the creatures of its sovereign will."

Assembly Speaker John Oceguera, D-Las Vegas, said legislators would not have gone after the money if they did not think they had that right.

"This is $62 million we would have and to fill" by other means, he said. "We are pleased by the ruling."

Legislature Counsel Brenda Erdoes said the judge ruled in the state's favor on all its issues, but there are other issues between the Clean Water Coalition, M Resort and others that still must be litigated.

Until the issues are settled, the money cannot be placed in the state's general fund, she said..

Calls to attorneys for M Resort and the Clean Water Coalition were not returned.

Besides taking $62 million from the Clean Water Coalition, the Legislature in February took $25 million in capital improvement funds from the Clark County School District and $25 million from a Clark County bond issue for highway construction.

Staff members to Gov.-elect Brian Sandoval have not ruled out that he might seek local government and school district money as the state faces at least a $1 billion revenue shortfall in 2011.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3900.