VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
DECEMBER 15, 2009

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on December 15, 2009, at the Virgin Valley Water District Office at 3:00 p.m. Attending were President John Paul, Vice-President Kenyon Leavitt, Secretary-Treasurer Cecil Leavitt, and Board Members Ted Miller and Robert “Bubba” Smith. Also present were Michael Winters General Manager, Michael “Boomer” Johnson Chief Hydrologist, Bo Bingham and Eric Wilbanks District Legal Counsel and Mary Johnson taking minutes and other interested parties of agenda items.

President John Paul called the meeting to order at 3:00 p.m.
Bubba Smith offered a Prayer and Kenyon Leavitt led the pledge.
Public Comment – There was no public comment at this time.

Discussion: Board Comments – Cecil Leavitt mentioned that this was most likely Bubba’s last meeting and wanted to publicly thank him for his time and service as a board member of the VVWD. As policy in the past, the District has offered a token of their appreciation for departing board members and Cecil presented Bubba with his gift. Kenyon also offered his appreciation to Bubba for serving on the board.

President of Board Comments – John Paul also echoed the previous sentiments and stated that Bubba has done an admirable job.

CONSENT AGENDA:

Kenyon Leavitt made a motion to approve the consent agenda as listed below. Bubba Smith seconded this motion and it was unanimously carried. 5-0

1. Discussion & Action - Approve Agenda

2. Discussion & Action – Approve Minutes from 12/1/09 Regular Board Meeting

3. Discussion & Action – Approve Financial Statement for October 2009

4. Discussion & Action – Approve Bills Paid - $2,053,866.33

5. Discussion & Action – Approve Purchase Orders Over $2,500
a. Iceberg Air Conditioning & Heating - $2,900.00 – Air/Heat Unit at Well #30

** End of Consent Agenda**

6. Discussion & Possible Action – Consideration to Approve Amendment to Contract with Bowen, Collins & Associates, Inc. to Finish Telemetry Work on the Arsenic Plants not to Exceed $30,844.00

Mike began by stating that he signed the final pay request for MMC, Inc. today and explained that November 24th was the official day of “end of completion” and the one year warranty began. However in the contract with MMC, their ISO was supposed to do certain things and it was not done so Marcus with Bowen & Collins, who is their telemetry person, has gotten the plants up and running and his charges were deducted from the MMC contract and this would be the last time this would come back before the board. Kenyon questioned what happened to the first person who should have completed the work. Mike Chandler representing Bowen & Collins explained that several of the items that they were contracted to do, specifically to install certain instrumentation and some wiring within the panels; they were taking a significant amount of additional time and Bowen & Collins were concerned that we were not going to meet some of our state mandated deadlines, so Bowen & Collins went ahead and programmed the instrumentation and got everything up and running with the knowledge that this was part of their scope of work. Mike Chandler further stated that in the interim, there were several other additional items that MMC did perform. MMC had submitted a change order for additional time needed because of the moving of site 27 and Bowen & Collins submitted a counter claim for the telemetry work and MMC was satisfied to walk away as is. Mike Chandler also stated that since they had to move site 27 they no longer had line of sight radio communications and now we needed to put a repeater at well #26. Mike Chandler also stated that they had included a buffer for Marcus to come down to help the operators without having to come back to the board for approval.

Cecil Leavitt made a motion to approve amendment to contract with Bowen, Collins & Associates, Inc. to finish telemetry work on the arsenic plants not to exceed $30,844.00. Bubba Smith seconded this motion.

John Paul called for questions on the motion and Bo Bingham stated that typically you would want to obtain some type of written confirmation or written release from a party who could potentially file a legal claim so it is possible to add to the motion that we obtain some type of release from that party in the event that we are going to go this route and we would be clear legally. Mike Winters asked if we would do this through the general or the sub. Mike Chandler stated that the District only has a contract with the general contractor, MMC, Inc. and not the sub-contractor ISS. We have a signed change order with corporate between the parties. Mike Chandler further stated that as part of the final paperwork they have the general contractor fill out an affidavit of payment and certification of final completion which notifies any and all parties that may have a lien on the project stating that the project is about to be closed out and that there has been no claims. Bo stated that they would like to review that paperwork and proposed that this be added to the motion.

Kenyon Leavitt amended the motion to include that the District’s legal counsel review change order from MMC to Bowen & Collins prior to amendment of the contract. Bubba Smith seconded this motion and John Paul called for a vote.

Cecil Leavitt called for a point of order and stated that the board should vote on the amended motion and then the original motion. John Paul stated if there were no questions on the amended motion we would call for a vote.

The amended motion passed unanimously. 5-0

John Paul then called for a vote on the original motion as amended.

The original motion as amended passed unanimously. 5-0

Mike Winters added that 75% would be paid by ACOE.

7. Discussion – Discuss Correspondence/Letter from Mr. Don Paff Directed to Certain Board Members Regarding the Retention of Bingham & Snow, LLP as Administrative Legal Counsel for the Virgin Valley Water District – Requested by Kenyon Leavitt

Kenyon began by stating that Don had addressed the Board in public comment with his concerns, with letters to the Board with no response and then he published the letter in the local papers with still no response from the VVWD board. Kenyon further stated that anyone within the water district area who may have a concern or complaint should be able to state that complaint and receive board comment on it and that’s the reason he had this put on the agenda. Kenyon also stated that in his personal opinion, that there is probably no one who lives within this District who knows more about water issues than Don Paff and that he takes what Don says very seriously and appreciates his comments and concerns with the Water District. Don stated that he had spent some time on considering all the material that he commented on and felt that there was confusion, errors and maybe illegal actions in obtaining the legal counsel. Don stated some of his concerns and what he was confused about and some of the errors he thought occurred during this process and one was that the contract between the District and Bingham & Snow was not signed by Bingham & Snow. Don stated that the whole thing he has observed during this time and tried to report, essentially comes down to is what you want for counsel now and in the future and that relationships between staff, board and counsel should be like it exists under the laws establishing the VVWD and the District’s present Rules and Regulations, one of which directs the General Manager to appoint general counsel. Don stated that his suggestion was to start over and decide what the needs of the District are and proceed by seeking people who have qualifications to support what your needs are and then proceed in a cooperative way with counsel, staff and board.

Kenyon commented that in the closed session with legal counsel that these issues were discussed that Don brought up as far as who reports to whom and how this goes on. We are using George Benesch; however we are having Bingham & Snow be the reporting agency as our legal counsel. Water issues will hopefully go through George Benesch and come to the board for action and Mike Winters, as general manager is the go between and his job is to issue “work orders” per say. Kenyon further stated that there was some confusion, but believes this is taken care of. Don stated that he thought the District needed to examine their relationship between counsel and the District and feel comfortable that the contract or agreement are valid and secure administratively and legally. He further stated that the board should review the formation laws and Rules and Regulations they have adopted because he believes that they are weak, if not faulty.

Ted Miller commented that serving on the board was a difficult job and asked if the board had to listen to everyone’s complaints. He stated that he had some rate payers with complaints and asked if we would have to put them on the agenda next month? Kenyon commented that everyone has the opportunity to complain and if they want on the agenda that they should have that opportunity or they can speak during public comment and that this is the job of a board member, no matter what board someone serves on; and if you do not like how the process works, that maybe you shouldn’t run for reelection. John Paul stated after further discussion that Ted could have the rate payers contact him and he would put them on the agenda if need be.

Mike Winters suggested that he pull the agreement with Bingham & Snow and sit down and talk to Bo about it and whatever is missing we’ll rectify that.

Bo commented that he appreciates any concerned citizen coming forward and voicing their concerns to the Board. With respect to some of the comments made, Bo stated that it is common for fee agreements not to be signed by the attorneys and the specific reason for this is that the contract specifically states that the board can terminate Bingham & Snow at any time for any reason. It is not a binding contract where you are employing them for a specific period of time. With respect to the process that the board went through, the enabling statutes were absolutely followed; and moreover, the by-laws were also followed and Bo read directly from the statute itself.

Cecil commented and took exception to what Bo said stating that the board did not follow procedures as set by the Administrative Policy and Procedures Manual in regards that the General Manager did not appoint anyone.

Bubba Smith stated that he disagreed with Cecil’s comments in that the board gives direction to the general manager to hire someone else and the board directs the general manager and that is their right as a board to seek additional and/or other services.

Kenyon stated that the Administrative Policy and Procedure Manual should be changed to state that. John Paul stated that Mr. Winters was responsible as an individual and that he would get together with general counsel and make sure that we have an agreement that’s binding and then also if we need to change the Administrative Policies and Procedures that it should be brought back to the board to do that.

8. Discussion & Possible Action – Consideration of Request by Cheetah Wireless Technologies, Inc. to Mount Antennas on the Freeway Water Tower Reservoir

Mike Winters stated that he thought this item should be tabled because he had received some diagrams and has found more things that concern him. Mike also stated that he had contacted Eric Wilbanks and had not heard back from him or Cheetah’s. John Paul stated that we would table this item but he would open for public comment. Jeffrey Thau, representing Cheetah Wireless, stated he was present to answer any questions. Eric stated that he had received Mike’s comments, but hadn’t forwarded them and thought that this would be discussed today. Mike stated that the District had spent several thousand dollars on painting that tank and he didn’t want anything attached to the tank. It would have to be a free standing tower and Mike also stated that we did not have any structures up there. Any structures needed to house any transmitters or receivers, they would have to do something there and he wasn’t even sure if there was 110 power up there. Bubba asked if there would be any zoning requirements if they needed to build a structure and Mike stated that previous requests to build a tower have gone to the City and been rejected. Tim Hacker, City Manager, stated that if this request was like Reliance Connects on the Vista Del Monte tank there would be no need to come to the City. Mike stated that the Vista Del Monte tank had a lip for attachment and didn’t believe the Freeway tank had a lip for any attachments. Eric questioned Mike on the comparison to Reliance Connects request and Mike stated that Reliance Connects was a much smaller tower.

John Paul stated that without objection he would un-table this item and re-read item #8. Jeffrey Thau stated that there was no need for a structure for housing and that there was a panel on the south side of the tank that would be used and that there is 110 power. Jeffrey further stated that they were not looking to construct a free standing tower and that the tower would be held by clamps and there would be no welding. Jeffrey stated that this was for public safety and mentioned other cities where they had towers and that they would be willing to work with the VVWD for communications needs. Mike asked if the tower could be hooked to the telephone pole and Jeffrey stated that yes it could be. There was further discussion and John Paul suggested that Jeffrey and Mike get together and see if there was a possible solution.

Kenyon Leavitt made a motion directing the general manager to work with Cheetah Wireless Technology and see what the feasibility is on putting it on the tower or on a pole, if it will clamp on to whatever Mike thinks is going to work there; and also have general counsel look at the contract and get it to where they like to see that and go from there and have the contract brought back to the board subject to City approval. Bubba Smith seconded this motion and it was unanimously carried. 5-0

9. Discussion & Possible Action – Consideration of the Handling of the Virgin Valley Water District’s (“VVWD”) Ongoing Disputes and Litigation with Vidler Water Company, Inc. (“Vidler”) and the Lincoln County Water District (“LCWD”) Regarding the Tule Desert Groundwater Basin, Including the VVWD’s Protests of Vidler and LCWD’s Applications to Appropriate Groundwater in the Tule Desert Groundwater Basin and the VVWD’s Intervention and Involvement in Pending State and Federal Actions of Vidler and LCWD. Potential Action May Include, but is not Limited to, Directives from the Board to the VVWD’s General Administrative Counsel Regarding Review and Assessment of the Pending State and Federal Actions and the VVWD’s General Administrative Counsel’s Participation in such State and Federal Actions.

Kenyon Leavitt stated that this item had been taken care of during the closed session and that there was no legal action required. John Paul opened the item to the public and there was none so he sought a motion.

This item died for a lack of a motion.

10. Discussion & Possible Action – Consideration of Request by Longview Construction & Development, Inc. (“Longview”) that the VVWD Release Certain Funds under the Virgin Valley Water District Riverside Road Virgin River Crossing, Contract No. 2008-01, PWP-CL-2008-44 for Directional Drilling at the Bunkerville Bridge – Requested by Longview Construction & Development, Inc.

Dave Bundy, President of Longview Construction and Aaron Waite, Longview Construction’s legal counsel, were present and Aaron Waite began by stating that the District had hired Longview Construction for the Directional Drilling project at the Bunkerville Bridge and commented on the minutes from January 20, 2009 and the motion that was made to withhold the $50,000. They were here to ask the board to release that money back to Longview Construction. Cecil Leavitt stated that he would recuse himself because he was working with Legacy Construction and would be abstaining from this item. Bo stated that he had reviewed the contract and the minutes that Mr. Waite referenced and his understanding of the minutes was that the board wanted to make sure that all issues related to this project were resolved relative to the liquidated damages as well as any other issues that may be unresolved. The contract also provides for certain other offsets, for claims or other unforeseen things that might take place on the project. Bo stated that the board would be justified in making sure that all claims and all issues are resolved before releasing any money whether it be under liquidated damages or offsets. Bubba stated that he had made the motion in question due to a change order that had been submitted that the board denied and it’s really the policy of the Water District, and the contract reads, that they are going to pay $2,000 per day for every day that they don’t meet their contract. With potential pending litigation and other items that may come up that we anticipated coming up because of this change order and because of the delays and then not fulfilling their responsibility for fulfilling the contract on time, we held that money and in his opinion we need to continue to hold that money until we are sure that we are not going to accrue any other costs on this project. Kenyon stated that his personal opinion is that the motion has already been made on January 20th and that we hold that money until that time that all these issues are taken care of and he doesn’t believe that is the case right now. Kenyon further stated that maybe Bo and Aaron could get together and hack something out and resolve those issues along with Dave and Mike and then maybe we could consider that. Aaron asked if there were any other issues besides the change orders from Southeast Drilling that they could anticipate causing any problems and John Paul stated they needed to satisfy legal counsel and to work with Bingham & Snow.

11. General Manager’s Report

Mike had not included a written report. Mike stated that there were a lot of things going on and unfortunately a lot of these issues are legal issues. There are some meetings coming up this week and hopefully they will be in our benefit. Mike also mentioned that we are aware of our “bottom line” that Ted has brought up several times and we are working to see if there are different places where we can cut back on and believes that within the next month or so he will come back to the board with some recommendations on different avenues that we could take to hopefully improve the Water District.

12. Hydrologist’s Report

Michael had not included a written report. He informed the board that the AquaGard had been completed and well #30 was restarted without a hitch. Boomer further stated that there was a deposition last week with the Deputy State Engineer regarding Tule Desert and that there were ongoing talks with the AG and Vidler. Boomer also stated that they were working on the final draft of the feasibility study for the recharge program and attempting to have that here at the first board meeting in January. Also, still working on well #34 and hopefully we can go out to bid in January. Mike Winters also mentioned that we were going to try and get into the airport tank this winter which we’ve never been into.

13. Public Comment

Kraig Hafen commented that the board members were doing a good job. Morris Workman asked Mike about the 35 Bunkerville shares auctioned. Mike stated that there were two bidders and Bunker Farms, Inc. will lease the shares at $300 for one year. Sandra Raymaker asked when the Rules and Regulations would be completed and Mike stated that they should come back to the board after the first of the year.

14. Adjournment

President John Paul adjourned the meeting at 4:30 p.m.

The minutes of this meeting have been tape-recorded and will remain on file in the District office for a one-year period for public examination.

• Board Meeting Minutes: 2009-12-15 (.pdf 27K)