VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
APRIL 6, 2010

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on April 6, 2010, at the Virgin Valley Water District Office at 3:00 p.m. Attending were President John Paul, Vice-President Karl Gustaveson, Secretary-Treasurer Kenyon Leavitt, and Board Members Ted Miller and Mark McEwen. Also present were William “Pete” Peterson Interim General Manager, Michael “Boomer” Johnson Chief Hydrologist, Bo Bingham District Legal Counsel and Mary Johnson taking minutes and other interested parties of agenda items.

President John Paul called the meeting to order at 3:04 p.m.

Mark McEwen offered a Prayer and Kenyon Leavitt led the pledge.

Public Comment – Bill Mitchell with John Mitchell Insurance introduced himself and stated his concerns regarding the District’s insurance with the Nevada Public Agency Insurance Pool Pact and who their broker would be. Sandra Raymaker thanked the District for being able to tour the Arsenic Plants.

Discussion: Board Comments - None
President of Board Comments - None

CONSENT AGENDA:

Karl Gustaveson made a motion to approve the consent agenda as listed below. Ted Miller seconded this motion and it was unanimously carried. 5-0

1. Discussion & Action - Approve Agenda

2. Discussion & Action – Approve Minutes from 3/16/10 Budget Work Session Meeting

3. Discussion & Action – Approve Minutes from 3/16/2010 Regular Board Meeting

4. Discussion & Action – Approve Financial Statement for January 2010

5. Discussion & Action – Approve Bills Paid - $610,398.13

** End of Consent Agenda**

6. Discussion & Possible Action – Consideration of Process, Parameters and Guidelines for Hiring New General Manager. Issues to be Considered may Include, but are not Limited to, Appointment of Person or Committee to Perform Initial Review of Applications and Establishment of Guidelines and Parameters for Review of Applications

John Paul began by stating that Mike Chandler with Bowen & Collins was present and that he thought he would possibly be a candidate to sit on the committee to review applications. Karl Gustaveson stated that he thought Bill Tanner, Public Works Director with the City of Mesquite would also be a good candidate for the committee. Karl further stated that the City Manager was present and maybe he could comment and say if this would be appropriate or not. Tim Hacker, City Manager, stated that he hadn’t really discussed this with anyone or with Billy Tanner, but that Bill’s wife, Hatty, works for the District and that this may cause an unnecessary situation. Tim further stated that the City had a very skilled HR Director, Mike Callahan, and was willing to offer his services for the process.

Kenyon stated that he would like to see two board members, two members from the community, if it be Mike Chandler and then another person and then Pete and Mary. Karl stated that he would like to volunteer as one of the board members and Ted also volunteered. Kenyon also stated that he would like to be on the committee so both Mesquite and Bunkerville had a representative and Ted stated that he would un-volunteer.

Pete questioned if the District would pay for applicants’ travel in order to interview if they were from out of town and the Board stated that the applicant would be responsible for all expenses. Kenyon stated that he thought that within the motion the board should allow the committee to set the parameters and Karl stated that with Mike Callahan’s expertise that he would be able to come up with the parameters and proper procedure.

Ryan Wheeler with Forsegren & Associates, a local civil engineering company, commented that he didn’t feel it was fair that another consulting firm representative would serve on this committee and that it would be a conflict of interest. Mark McEwen stated that was a valid point and that could take the committee to five and make it uneven. Kenyon disagreed and stated that Mike Chandler had expertise about the District’s system that no one else on the committee had and that the committee wouldn’t hire the new GM, but that this would be the board’s decision. John Paul stated that he felt as Kenyon and that Mike Chandler would do an honorable job sitting on the committee if he would accept. Mike Chandler stated that it didn’t make a difference to him, but he doesn’t want to cause any conflicts, but wanted to recommend that the committee should coordinate with staff regarding legal matters and water law issues and what the new GM would have to deal with in Nevada. John Paul further stated that the motion should include that if part of the process should require legal recommendation that they refer to Bingham & Snow.

Kenyon Leavitt made a motion to appoint Pete, Mary, Karl, himself and the HR Director, Mark Callahan, from the City of Mesquite to sit on the committee to set the parameters and guidelines to hire a new General Manager and that the committee start that process as soon as possible.

Mark questioned who would chair the committee and John Paul answered that the committee would decide that. Karl stated that Kenyon’s motion only deals with guidelines and wondered if he was not going to go beyond that and talk about interviewing, etc.

Kenyon further stated that as part of his motion it would include that the committee would do interviewing and then come back to the board with a recommendation of three for a General Manager. Kenyon also added that the committee should use other sources from the outside as legal counsel and/or experts as needed. Mark McEwen seconded the motion and it was unanimously carried. 5-0

7. Discussion & Possible Action – Consideration to Purchase One (1) Mesquite Irrigation Share from Staci Frei

Ted Miller stated that he would be abstaining from items “7” and “8” because of personal business dealings.

Kenyon Leavitt stated that Mike Waite was his uncle in item #8 and that comments in #7 would be no problem, but he would also abstain from both items “7” and “8”.

Boomer stated that the District had received a letter from Staci Frei requesting to sell one Mesquite Irrigation share to the District for $71,422.72. This price was the price SNWA was purchasing Mesquite Irrigation shares for and that the District had also purchased water at this same price. Boomer further stated that after conversations with SNWA representatives, they went out for a $40 million bond and that those funds were expended and currently not purchasing water and that current leases with SNWA may not be renewed once the expiration date of the lease is expired. Boomer further stated that the District is currently charging $3,300 per EDU and that they do not reflect the current estimated cost of $8,700 per acre foot and that the District currently has bond funds and Ordinance II funds available to use to purchase water. Boomer also stated that because of the reduced demand for the irrigation water and after doing a rough calculation with a 7 to 10% reduction in cost, he felt a more appropriate cost per share of Mesquite Irrigation water is estimated at $65,000 per share and that would be his recommendation.

John Paul stated that he was also inclined to think that the cost should be discounted since the VVWD were the only active buyers. John Paul gave his explanation as to why he thought the market was soft and how an artificially inflated rate was caused by SNWA. There was further discussion regarding what the real value or rate was of the irrigation water versus reuse water.

Staci Frei was present and commented that she wanted to come to the District board first to keep the water in the valley and she hasn’t made a decision yet and that the share was currently being leased from SNWA.

Mark McEwen made a motion to offer to buy one Mesquite Irrigation share from Staci Frei for $65,000. John Paul seconded this motion and it was unanimously carried, 3-0 with Ted Miller and Kenyon Leavitt abstaining.

8. Discussion & Possible Action – Consideration to Purchase Two (2) Bunkerville Irrigation Shares from Michael and Lynnette Waite

Boomer stated that this was much like the previous item except that these were Bunkerville Irrigation shares and using the same methodology as before he came up with a purchase price of $72,000 per share. There are no restrictions of these shares either; they are not being leased from SNWA. David Waite, representing his parents Michael and Lynnette Waite, stated that as in the last motion, it would be fine for the board to offer what they are willing to pay and that he would consult with his parents and get back to the District if they were interested in selling at the lower price.

Karl Gustaveson made a motion to purchase two Bunkerville Irrigation Shares; one A-038 entitled Mike Waite and Lynnette Waite for $72,000 and one A-037 entitled Mike Waite for $72,000 for a total of $144,000. Mark McEwen seconded this motion and it was unanimously carried, 3-0 with Ted Miller and Kenyon Leavitt abstaining.

9. Discussion & Possible Action – Consideration of Trespass and Unauthorized Use Issues Associated with the Site of Virgin Valley Water District Well #30 and Resolution and Settlement of Such Trespass and Unauthorized Use Issues with the United States Bureau of Land Management

Boomer deferred to Legal Counsel and Bo explained that the board was aware of the BLM contacting the District and stating that the equipment/antennas exceed the scope of the BLM’s perspective of the right-of-way that’s been granted. Bo further stated that they have made contact with parties who have equipment on that site and that they have agreed to move their equipment by April 12, 2010. Bo further stated that as the District continues to work with the BLM to get these issues resolved that sometimes outside consultants are brought in who have experience in dealing with Federal Lands. Bo has contacted a specific individual and they discussed the issues at well #30; they have significant experience in assisting entities in dealing with the BLM and the board could consider retaining a consultant in this capacity to assist the District with the issues that remain unresolved. Bo further stated that the board, if they decided to hire this consultant, had a couple options in that they could pay the consultants as if on retainer a specific amount monthly and they could work on any issues that may come up or you could pay them more money on this issue alone.

Kenyon questioned if we weren’t required to get an RFP or RFQ for this. Bo explained that according to NRS and this being a professional service that the District was not required to request RFP or RFQ.

Karl stated that this group had outstanding credentials and thought that we did need their help.

Ted stated that he agreed and that we are out of compliance and thought that we should hire for 90 days and clear this up as soon as possible.
Mark questioned if we were moving forward and didn’t we already have people on staff to handle.

John Paul stated that everything he has heard are good points and that he concurred with Karl and this group were worth the money and that we should proceed hiring this group.

Karl Gustaveson made a motion to hire Robcyn, LLC for the purpose of working on BLM issues for a period of ninety (90) days.

Bo stated that as far as the agenda item read, he had a suggestion for Karl to include the BLM trespass and that this group was exempt from NRS 332 since they are a professional service.

Karl Gustaveson rephrased his motion and moved to hire Robcyn, LLC to help the District with the trespass and unauthorized use issues associated with the site of Virgin Valley Water District Well #30 and resolution and settlement of such trespass and unauthorized use issues with the BLM; and feel that they are professional services and exempt from NRS 332 for a period of ninety (90) days. Ted Miller seconded the motion and it was passed by a vote of 3-2 with Kenyon Leavitt and Mark McEwen opposed.

Brett Whipple representing Rebel Communications asked to address this item since they had been contacted earlier regarding this item and had a settlement agreement for the board’s consideration.

Bo stated that he appreciated Rebel/Brett attending meeting, but Rebel Communications was not part of the agenda item and that maybe they could step outside and look at the settlement agreement, but that this needed to be discussed between legal first and not publicly at this time.

Cody Whipple read the item from the agenda and commented that Bo had been in contact with Rebel Communications for over a week and thought that part of settling the BLM issues also included a settlement agreement with Rebel.

10. Discussion & Possible Action – Consideration of Status of Pending Litigation Against Manufacturers and Distributors of Pipe Used in Certain Portions of Virgin Valley Water District’s Service Area

Bo stated that this item was put on the agenda to assess the litigation of this situation and that the board was up to date on information regarding this and it was put on the agenda for any motion they may have.

Ted commented that after talking with the attorneys that he felt we could table until the second meeting in July.

John Paul stated that we could direct legal counsel to enter into a modified fee arrangement regarding fees or we could do it ourselves.

Ted Miller made a motion directing legal counsel to enter into a modified fee arrangement with attorneys currently handling this case at a reduced rate. Karl Gustaveson seconded the motion and it was unanimously carried. 5-0

11. Discussion & Possible Action – Consideration to Protest Water Right Applications Nos. 79356 and 79357 Filed by Lincoln County Water District and Vidler Water Company in the Lower Virgin River Basin

Boomer stated that following the Supreme Court Ruling, Lincoln County Water District (LCWD) and Vidler Water Company re-filed applications 79356 and 79357 in the lower Virgin River Basin. Not knowing what the ramifications are associated with the Supreme Court Ruling, they were re-filed and out for publication and currently they are in the protest period. The protest period ends April 17, 2010 and the cost to file a protest is $25 per application.

Karl questioned legal counsel and asked how they felt and Bo stated that it was absolutely prudent to file the protests.

Kenyon Leavitt made a motion to file protests on water right application Nos. 79356 and 79357 filed by LCWD and Vidler Water Company in the lower Virgin River Basin. Karl Gustaveson seconded the motion and it was carried unanimously. 5-0

12. Discussion & Possible Action – Consideration to Set a Date and Time for a Workshop to Review, Revise, Discuss and Amend the District’s Rules & Regulations and Proposed Changes to Such Rules & Regulations

Ted asked if we shouldn’t wait until we hire a new general manager and John Paul stated that the Rules & Regulations already exist and he felt we should move forward and the new general manager would have direction to follow and proceeded to pass out copies of the draft Rules & Regulations. Dates and times were discussed.

Kenyon Leavitt made a motion to hold a workshop to review, revise, discuss and amend the District’s Rules & Regulations and proposed changes to such Rules & Regulations on Thursday, April 15, 2010 at 1:00 p.m. Mark McEwen seconded the motion and it was unanimously carried. 5-0

13. Interim General Manager’s Report

Pete had included a written report and informed the board that he had met with Cheryl Couch of the USDA and she wanted the District to know that there are programs available to assist the District with capital improvement projects.
Pete also mentioned that the 2009 PRV Project was almost completed with a few small things to be taken care of.

Pete asked Bo about allowing a contractor to use the District’s site to complete some work to a tank that the City of Fallon purchased from the District and its legality and Bo stated that he would have to get back with Pete since Eric was more informed of this situation.

Pete also mentioned that he was taking a college course through AWWA and he thanked everyone who came to the Open House for the Arsenic Plants.

14. Hydrologist’s Report

Michael had not included a written report due to being on vacation last week. Boomer stated that he has been working with legal regarding the Legislative Mandated Workshop by the Nevada State Engineer and we have submitted a comment letter with pertinent issues and what language should be used to maintain our senior priority status in the lower Virgin River Basin. On the State Engineer’s website, there were six proposed comments and the District and Vidler Water posted comments and chose language three.

Boomer stated that he would be giving a presentation to the Mesquite Master Planning Committee; there was a meeting coming up April 21st and 22nd on the Colorado River and maybe board members may be interested; meeting on April 13th for the board of directors for NWRA; and meeting April 26th with RBF Consulting and the ACOE regarding the aquifer recharge.

15. Public Comment

Morris Workman with the Mesquite Local News questioned the board and how they were going to pay for the water shares that they proposed to purchase in items #7 and #8 and was informed through the Ordinance II account. Morris also questioned the amount the District was going to pay to Robcyn, LLC and was informed $10,000 per month.

Bob Frisby with Beaver Dam Water Company questioned Boomer and asked if he should also file a protest to the application nos. 79356 & 79357.
Sandra Raymaker asked to obtain a draft copy of the Rules & Regulations to be reviewed at the workshop on April 15th.

16. Adjournment

President John Paul adjourned the meeting at 4:44 p.m.

(NOTE): 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: 2010-04-06 (.pdf 25.5K)