Commission Chairman Greg "Bum" Hess on Tuesday threatened a grand jury investigation into the conduct of northern Storey County's Canyon General Improvement District.
The issue will be addressed at the county commissioners' Feb. 19 meeting.
The move followed a plea from Rainbow Bend resident Richard McNaughton, who alleges the district's records are not available, although they should be public.
He also alleged Rainbow Bend residents were misled concerning a new source that would supplement their failing water supply.
"The improvement district started negotiating with A&K for a second water supply over a year ago and the well pumped 250 gallons per minute," he said. "A&K only needed 50 gpm, leaving us 200. But the documents at Nevada's Water Resources division state clearly that this company is in negotiations to sell those water rights, complete with the treatment plant, tank and pumping facilities, to Washoe County."
He said A&K is also in negotiations with the improvement district and this could be a three-way deal, but the residents of Rainbow Bend were never told about Washoe County's involvement, a development that compromises their position.
"These accusations have been ongoing since before I took office. Some are founded and some not," responded Hess. "The people are split and I want to call for a grand jury investigation, to find out what's going on."
The water shortage became so critical this summer residents were compelled to let their lawns and landscaping dry up in the name of water conservation. Production from the only well for Rainbow Bend, a 300-home community in northern Storey County, continues to falter.
"The best we can now hope for is 60 gpm, providing the well doesn't collapse," said Commissioner Bob Kershaw.
A small group of Rainbow Bend residents clapped approval as Kershaw supported the grand jury investigation. He said the community's failing water supply is the most critical issue at this point.
"The GID is a body that is supposed to serve the people, but it's been run like a for-profit business," Kershaw said Tuesday. "The county needs to have more control over what's going on."
In a recent recall vote, district Chairman Pat Shannon was removed by an eight-vote margin, 136 to 128. Three other board members named in the recall, Robert Schnaufer, Marvin Clark and Dave Cockerton, retained their seats by narrow margins: at the most 14 votes.
Schnaufer resigned following that election, leaving two vacancies on the five-member board.
Those vacancies could be filled at a meeting of the district tonight. The board will also be asked to appoint a citizen's committee concerned primarily with water issues, according to McNaughton.
Created in 1993, the district manages water, sewer, streets, storm drains, and cable TV.