This is a process problem. The correct order to do things is: pull permit to fix plumbing, that permit will allow you to connect to the city water for testing purposes once you've proven the system will hold pressure (initial inspection), then when you're connected to the water an additional inspection will be done to verify working plumbing, if thats the only outstanding issue you can apply for a certificate of occupancy, otherwise you move onto other work.

Dealing with the government on things like this can be EXTREMELY frustrating especially if you're not used to running in those circles. Its a lot of things to learn and the people involved assume you know everything and when you get difficult they have a million ways to make your life more annoying.

The city will not issue the permits to do the work. FULL STOP.

I literally already have a city water connection and it's costing me a hundred bucks a month just to sit there unused because I can't get the permits to fix the plumbing... So what would you do in that situation?

According to the city website, there is a vacancy in the planning commission. Apply for it, you'll probably have a lot more success getting the permits you need if they see an official making the requests.

Lawyer up, and get some private security preferably armed with tasers at a minimum.

You got a great bargain, now these expenses are the price of doing business.

Lawsuit has already been filed.

Whats the justification for not issuing plumbing repair permits? Or is it an issue of getting it inspected?

I know a lot of businesses that just put up brown paper and do the construction in secret because local governments are such a PITA.

Im not offering advice... but I see this often.