Dallesport Water District Sues City of The Dalles, Klickitat County over water rights at Regional Airport

Photo from Wikipedia Commons. This olde shot does not show recent improvements at the airport closest to the river. Civil work is underway on the second phase of the Airport Business Park Improvements, which includes grading 24 acres to create six lots with roads.

By Tom Peterson

Dallesport, Wash., Aug. 12, 2025 — The Dallesport Water District is taking the City of The Dalles and Klickitat County to court, claiming the two governments failed to deliver on long-promised infrastructure and water rights for the Columbia Gorge Regional Airport — a dispute that could affect millions of dollars in development and long-term water service in the area.

On the advice of attorneys neither City of The Dalles Manager Matthew Klebes nor Dallesport Water District Commissioner Bill Clark chose not to make comment for this story, other than to say their is a suit for breech of contract.

The 27-page complaint, filed July 10 in Klickitat County Superior Court, alleges breach of contract, bad faith, and unjust enrichment tied to two agreements signed in 2011 and 2012. The suit alleges years of delayed development and lost revenue in Dallesport, a community known for lower housing costs but constrained in its growth by limited water and sewer capacity.

Attorneys for municipal clients in Washington and Oregon can bill upward of $450 an hour, meaning each tax district is committing significant public funds to the dispute; if the case stretches over months of motions, discovery, and trial preparation, legal costs alone could run into the tens or even hundreds of thousands of dollars, all paid from taxpayer-supported budgets.

Recent development meeting addresses water shortage

In January, developers of the proposed Chinook Hills housing project in Dallesport held a public comment session to gather feedback on a 70-acre plan that would add roughly 200 garden apartments, 90 single-family homes and 60 townhouses. At the meeting, project representatives acknowledged that the development’s future hinges on securing additional water capacity from the Dallesport Water District, which is working to upgrade and expand its infrastructure. Residents raised questions about how the water supply would be met, citing the district’s current limitations as a key factor in whether the long-discussed project can move forward.

The City of The Dalles and Klickitat County jointly own and manage the Columbia Gorge Regional Airport under a shared cost and operations framework set by a Joint Operation Agreement signed Nov. 1, 2002. The pact outlines each jurisdiction’s responsibilities for airport facilities, infrastructure development, and utility services, including water. Under the agreement, both governments share in the costs of capital projects, maintenance, and improvements, and jointly make policy decisions through the airport’s governing board. This arrangement extends to utilities such as the airport’s wells and water systems, which have been central to recent disputes over infrastructure completion and water rights transfers.

Dallesport Water District reservoirs and infrastructure at 302 6th Avenue.

The Dallesport Water District was established in August 2009 to provide water services to the Dallesport and Murdock communities in Klickitat County. Governed by an elected three-member Board of Commissioners, the district absorbed the Murdock Water and Mountain View Water Associations in 2010 to streamline operations and improve funding access. Funded primarily through customer water sales and service fees, its annual revenues have varied from about $329,000 to more than $1 million, depending on grants. The district operates with a small staff of roughly three employees.

The agreements at the center of the lawsuit were meant to connect a newly drilled “Well 7” on airport property — capable of pumping up to 615 gallons per minute and authorized to produce as much as 750 acre-feet of water per year, enough to supply millions of gallons annually — to the district’s water system, transfer a state-issued water right, and share costs for new storage and pumping facilities. Access to a reliable water supply is a key driver of land value, as it unlocks the ability to build, attract commercial tenants, and secure financing for projects. Developers often view connections to a municipal water system as a threshold requirement, meaning the completion of Well 7 could significantly raise the profile — and the price — of surrounding properties.

Under the 2011 Water Supply Agreement and the 2012 Agreement to Construct Water Storage and Pumping Improvements, the city, county and district agreed to jointly fund the construction of a new water reservoir, booster pump station, and the integration of Well 7 into the system to serve the airport and future business park phases, according to the suit.

The water district says it fulfilled its share of the deal by designing and building its portion of the facilities, including treatment system upgrades, at a cost of more than $869,000. According to the complaint, these projects were intended to meet Department of Health fire flow requirements and expand capacity for commercial and industrial development — but remain incomplete because the city and county did not finish their corresponding work or transfer the promised water rights and easements.

The district says it has kept the airport supplied with fire flow and potable water from its own wells — without receiving the well, the water right, or promised funding. It claims the city and county have withheld a $187,000 landfill grant, blocked easements, and diverted connection fees from new airport users.

According to the filing, the district is experiencing an ongoing loss of about $1.3 million per year in potential development revenue, along with equipment damage, higher treatment costs, and regulatory strain.

The district is asking the court to compel the city and county to transfer Well 7 and its water rights, complete the infrastructure, and pay damages for lost fees, unreimbursed costs, and other expenses. It is also seeking a declaration affirming its sole authority to approve new water connections in the service area.

The case highlights ongoing tension over the airport’s water service and could influence future industrial and commercial growth in Dallesport. The court has not yet set a trial date, and both sides are expected to present their positions in upcoming proceedings.