Lawsuits filed to block state from taking water funds

With the ink barely dry on a measure aimed at balancing the budget, the state has been hit with a pair of lawsuits over a move to tap money collected for a shelved wastewater project in the Las Vegas Valley.

The Clean Water Coalition and M Resort in Henderson filed separate suits on Friday to block the state from siphoning $62 million from the coalition.

The legal action came just as Gov. Jim Gibbons was signing the fund transfer into law as part of sweeping budget measure passed by lawmakers to address a shortfall of almost $900 million.

Lawyers for the coalition and M Resort argue that the state lacks the authority to take the money because it was collected from residents and businesses in the Las Vegas Valley specifically to address regional water quality issues.

An analysis by the Legislative Counsel Bureau reached the opposite conclusion.

Senate Majority Leader Steven Horsford, D-Las Vegas, said the coalition was one of several accounts that were "swept" by lawmakers, a maneuver that yielded $190 million to help balance the budget and protect education and other vital services.

He said he was "disappointed" by the coalition's decision to sue, since the agency's own board recently decided its proposed wastewater project was no longer needed and was talking about using the money for something else.

"They themselves indicated they were going to use those funds for a purpose other than what they were collected for," Horsford said. "It's hard for me to understand why they would now put our entire state budget process in jeopardy."

M Resort Chief Executive Officer Anthony Marnell III said he decided to file suit because he and others paid money into the coalition exclusively to fund water quality improvements in the valley. If the money isn't going to be used for that purpose, "it should be returned to the people who paid into the fund," he said.

Marnell said his company has paid about $1.5 million in sewer connection fees to the Clean Water Coalition, and that's where he wants that money to stay.

"Everybody who lives in Southern Nevada knows how big the water problem is. And if they don't they should," he said. "I don't think that's how the state should do business."

If the effort to block the fund transfer is successful, Horsford said the governor may have to call another special session to find an alternate way to balance the budget.

Under the worse-case scenario, Horsford said, the budgets for K-12 and higher education will be cut by another 3.5 percent so the Clean Water Coalition can keep $62 million for a project it doesn't intend to build.

Contact reporter Henry Brean at hbrean@reviewjournal.com or 702-383-0350.