Douglas County commissioners authorized staff Thursday to draw up contracts and a loan structure toward construction of wastewater and water systems for the upscale Clear Creek subdivision.
Commissioners directed staff to bring contracts with Carson City and Clear Creek for consideration and approval of wastewater treatment.
The second directive is to create a development agreement for a temporary loan with the subdivision to borrow $1 million from the county, and make a $1 million cash payment in-lieu of Clear Creek constructing a new well.
The Clear Creek subdivision is a 366-home project in northern Douglas County approved in 2003 over the objections of neighbors who went to the Nevada Supreme Court in an unsuccessful attempt to stop it.
Under the original approval, the development’s owners were required to build the on-site water system and off-site improvements to connect to the county’s system.
In lieu of constructing a well in the West Valley Water System, the developer would pay an additional $1 million to the county in installments as each lot is sold, and provide other assurance of repayment to the county.
Commissioners expressed concern about assurances the county would be repaid.
“We did look at fund balances,” said Public Works Director Carl Ruschmeyer. “We could expend $1 million and still follow financial policies.”
“What is the interest, the timeline?” asked Commissioner Nancy McDermid. “What if the lots don’t sell? My biggest concern is being repaid.”
McDermid said she voted against the project twice as a planning commissioner, but wanted to see it succeed.
“We need something besides lot sales for repayment,” she said.
In the past, she said, the county has failed to protect itself in dealing with water systems.
“For us to enter into this kind of agreement, (repayment) has to be guaranteed. We have to be very fiscally responsible,” she said.
Commissioner Greg Lynn reminded the board, “We are not spending a million dollars. We are not spending a penny.”
The agreement comes back to the board at its Dec. 19 meeting at Lake Tahoe.
County Manager Steve Mokrohisky said staff would bring back a development agreement, repayment and interest schedule for the board’s consideration.
In his report to the board, Ruschmeyer said a connection and service contract with Carson City reduces the amount of off-site infrastructure required to serve the development by the county.
“This alternative significantly reduces the cost to the project for the off-site sewer improvements,” Ruschmeyer said.
The alternative reduces ongoing operation and maintenance expenses for the county and the system reinvestment costs to replace the off-site infrastructure in the future.
He said it would alleviate the operational and maintenance problems with the low flows associated with the early development of the project.
Project manager Mark Rotter told the board Clear Creek planned to construct the system next year and submit a Phase 1 final map in May.