CARSON CITY – A Spring Creek developer with an unfinished duplex awaiting water service will have her case heard by the state.
Klondike Holdings LLC owner Julie Debenham and Great Basin Water Co. will go before the Public Utilities Commission of Nevada to determine if water rights were granted to two phases of a building project that stretched over six years.
On Feb. 26, the commissioners agreed to hear a complaint filed by Klondike Holding on Oct. 15 against Great Basin Water Co. for refusing to provide water service due to insufficient water rights allocation.
According to owner Julie Ann Debenham and Jon Bailey of Bailey Construction, a “will serve” letter issued in 2013 by GBWC was rejected six years later when the parties approached the company for service during the last phase of Klondike’s building project.
In 2013, Debenham paid GBWC a deposit of $38,550 to have the company install eight water and sewer utility connections. Two duplexes with four service connections were constructed at the time and received water.
During the second phase to construct two more duplexes last year, Debenham and Bailey received word that the company denied service to the project.
“We got the buildings built and made the request for the meters to be installed, and [GBWC] said they would not serve us, that they needed water for the project,” Bailey said.
Debenham told commissioners the final phase of the project was about three-fourths complete when she learned those buildings would not receive water and sewer.
She said she was assured repeatedly by GBWC staff for six months that her project would have water before receiving word from the company that the project would not be served.
“[GBWC] said they talked to the developer, that they informed the developer prior to pouring the foundation at the two duplexes about the water,” Debenham said. “I’m the developer. I will tell you one thousand percent they did not contact me.”
In two weeks, the project should be complete with tenants ready to move in, she added.
Debenham also requested the PUCN implement NAC 703.646, a state code for interim relief. It would order GBWC to provide water and sewer connections to the finished duplexes for tenants to move into the residence.
“So I can … mitigate my damages and their damages while we move this forward,” Debenham said.
In 2018, GBWC told the Spring Creek Association there could be limitations to commercial development for about two years due to the construction of Liberty Peak Elementary, along with multi-family and commercial projects.
The company stated the influx of construction pushed the water treatment plant beyond 85 percent capacity.
In a statement issued by GBWC President Wendy Barnett, since 1996 the company has “been and remains an ardent supporter, stakeholder and partner in the responsible development of Spring Creek.”
“However, we do believe the community should be developed within the scope of its resources,” Barnett said.
Addressing the matter, Barnett stated, “Klondike Holdings, LLC, did not receive a Will Serve for eight units, they received an Intent to Serve (legally, vastly different from a Will Serve) for four units, the most units which can be supported by the water rights allocation on the parcel (as determined by the State of Nevada Division of Water Resources and the Public Utilities Commission of Nevada and not GBWC).”
Barnett said GBWC “understands the cost to developers on meeting construction timelines and try to support projects in our service area as much as possible.”
According to Barnett, for more than a year the water company “repeatedly communicated” to Debenham and Bailey regarding “deficiencies in water rights to support eight units since the development was brought to us. They knew for almost a year before they started so much as grading for the additional four units.”
Additionally, Barnett stated a meeting with Klondike in Spring Creek was attended by the PUCN, in which the company explained “the restrictions of the utility imposed by the PUCN approved Tariff, Nevada statutes and Nevada Division of Water Resources regulations.”
“All these facts are documented in great length in the response to their complaint before the PUCN,” Barnett said, adding that the company hopes to provide insight to settle the dispute.
“GBWC is hopeful that the PUCN can bring clarity in resolving this issue as GBWC has done its utmost to obey the statutes, rules and regulations by which they are governed, communicating the same to Klondike Holdings,” Barnett concluded.
Debenham and Bailey said they hired former Nevada Division of Water Resources state engineer Thomas Gallagher to investigate the water company’s claims.
Bailey read the conclusion of a report written by Gallagher to the commissioners, which stated: “A utility cannot be allowed to arbitrarily change prior water service commitments. Those commitments are permanent in the same way as a subdivision final map is permanent. To permit otherwise would be a nightmare. How many other Will Serve letters could be in jeopardy in the future?”
Senior Engineer Analyst Adam Roney from the regulatory operations staff recommended the commission set the case for further proceedings.
“As of right now, I don’t think there will be a negotiation or a settlement between the parties until the commission finds on the issue,” Roney said.
With the matter set for a hearing, a prehearing conference will be scheduled to determine the next steps for the case.
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