VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
APRIL 20, 2010

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on April 20, 2010, at the Virgin Valley Water District Office at 3:00 p.m. Attending were President John Paul, Vice-President Karl Gustaveson and Board Members Ted Miller and Mark McEwen. Secretary-Treasurer Kenyon Leavitt was not present. 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 3:02 p.m.
Mark McEwen offered a Prayer and Karl Gustaveson led the pledge.
Public Comment – There was no public comment at this time.

Discussion: Board Comments – Karl brought the board up to speed on the process of hiring a new general manager stating that the applicants had been narrowed down to seven for telephone interviews and that pool would be narrowed down to three for personal board interviews. Karl informed the board that if they had any specific questions that they wanted to be included in the process for telephone or personal interviews to e-mail them to him.

President of Board Comments - None

CONSENT AGENDA:

Karl Gustaveson made a motion to approve the consent agenda as listed below. Mark McEwen seconded this motion and it was unanimously carried. 4-0

1. Discussion & Action - Approve Agenda

2. Discussion & Action – Approve Minutes from 4/6/10 Budget Work Session

3. Discussion & Action – Approve Minutes from 4/6/10 Regular Meeting

4. Discussion & Action – Approve Bills Paid - $536,920.56

5. Discussion & Action – Approve “Will Serve” Letters
a. Tannery Cove Subdivision – 87 EDU’s
Contingent upon meeting the Criteria to Ordinance II

** End of Consent Agenda**

6. Discussion & Possible Action – Consideration of Possible Participation by the Virgin Valley Water District (VVWD) and Involvement in the Ongoing or Potential Litigation Against Formosa Plastics Corp., J-M Manufacturing company, Inc. and/or JM Eagle for Substandard or Defective PVC (Polyvinyl Chloride) Pipes

Bo stated that this item was involved with litigation and the board could not give out a lot of detail in an open meeting. Bo further stated that JM Manufacturing is one of the largest manufacturers of PVC pipe in the world and Nevada is a large customer. Formosa Plastics provides resin and possibly other materials to JM Manufacturing and there has been a False Claims Suit that has been brought and legal has been contacted. Bo further stated that he has been in touch with the attorney general’s office, Susan Stewart, who is handling this case and since we are a Nevada governmental entity, the attorney general handles these claims on behalf of Nevada Political Subdivisions. Bo stated that what he is seeking and proposing is that the board gives their consent for the VVWD to participate in this litigation since staff has indicated that there is JM pipe in the ground and falls within this false claim that has been made and feels that it would be prudent for the VVWD to participate in this.

Karl Gustaveson made a motion that the VVWD enter into a class action lawsuit against the Formosa Plastics Corporation, JM Manufacturing, Inc. /JM Eagle. Ted Miller seconded this motion and it was unanimously carried. 4-0

7. Discussion & Possible Action – Consideration of Ongoing Possible Action with Respect to Litigation Involving Lincoln County Water District, Vidler Water Company, and the Nevada State Engineer and the Settlement Reached or Expected Between said Parties. Action may Include Direction to VVWD Legal Counsel to take Legal Steps to Contest the Settlement in an Effort to Protect VVWD’s Interests

Bo stated that for the same reason as the previous item and many of the items on this agenda involve litigation and it would be inappropriate to discuss specifics publically, but legal counsel does need direction from the board on pertinent issues as they come up throughout the litigation. Vidler Water Company (Vidler) and Lincoln County Water District (LCWD) and the State Engineer have entered into a settlement agreement. Pursuant to that settlement, additional water has been granted to Vidler and LCWD. The VVWD has been involved as an intervening party or participant in contesting Vidler and LCWD seeking additional water because we felt that it could possibly have an impact on our senior water rights in this basin to the extent that these two basins are connected. Bo further stated that at this point the board could explore or direct legal counsel to explore options for contesting that settlement.
Those options could include seeking an injunction, asking the court to stop that settlement; and that would be a significant task. As one alternative, the settlement agreement reached between those parties contemplates a monitoring plan whereby Vidler and LCWD pump water from the Tule Desert Basin and there will be an assessment on an annual basis and the VVWD can review that data. Our hydrologist would have input and at this point could see if there are impacts to our senior water rights. Bo stated that this monitoring plan is important because a lot of this is speculation as to what the exact impacts might be to the Virgin River Basin. As part of the public litigation, there were models that Vidler and LCWD put together to try to anticipate how much pumping could be done without imposing on senior water right holders. Bo continued to summarize and stated that there could be two options for the board to consider: one would be to seeking to contest the settlement agreement; and two would be to participate in the monitoring and monitor that data as it comes
out as they pump this water. Bo further stated that he had contacted Michael Wolz, Attorney General, and spoke with him about the procedure and the administration of a protest we might engage in if we believe there has been an impact from their pumping to our senior water rights; and he confirmed to Bo that we would have a couple opportunities to do that as the monitoring data comes out. Bo proposed drafting a letter to him and/or the State Engineer confirming what had been discussed so that in the future we would have a document stating that we would have an opportunity to contest the data as it comes out and he stated to do so and to send it directly to the State Engineer and most likely we would receive correspondence indicating as much.

There continued to be a lengthy discussion with questions asked by the Board regarding costs, the monitoring plan and its availability, monitoring sites, monitoring time frame and protesting data at a later date all answered by either Wade Poulsen, LCWD General Manager, Bo Bingham or Boomer.

John Paul opened the item to the public with Robert “Bubba” Smith commenting.

Karl Gustaveson made a motion to not contest the settlement agreement and to allow the settlement to take place with a strong monitoring plan and to direct counsel to send correspondence to the State Engineer asking them to confirm the conversation Bo and Michael Wolz had stating that data would be available and that the District would have opportunities in the future to contest if it is determined that the impacts are unreasonable. Ted Miller seconded this motion and it was unanimously carried. 4-0

8. Discussion & Possible Action – Consideration of Retention of Robcyn, LLC to Serve as a Consultant Providing Professional Services to the VVWD and as a Coordinator and Liaison Between the VVWD and Federal Agencies and Entities, Including the Bureau of Land Management (BLM) the Department of the Interior and the U.S. Fish and Wildlife Service and Review of the Terms of a Proposed Retainer Agreement by Robcyn, LLC for such Professional Services. Possible Action May Include, but is not Limited to, Retention of Robcyn, LLC as a Consultant to the VVWD and Authorizing and Direction to the VVWD’s Interim General Manager to Execute the Retainer Agreement to Retain Robcyn, LLC as a Consultant to the VVWD

Karl commented that this was voted on at the last meeting, but it is being brought up again to better identify what the purpose of this is, including not only the one specific issue brought up last time, but it is a wider issue and also includes the other agencies besides just the BLM.

Mark commented that he was maintaining his previous view that he didn’t think we needed to hire this firm and that we had legal counsel to handle issues as they arose or to delay the hiring because of the current economy.

Ted questioned time frame and Bo stated that because of litigation being filed and because of litigation, Rebel has requested that the court not do anything at this time until such time the court hears the case on its merits and an ultimate decision is made. Bo also stated that Robcyn, LLC is willing to modify agreement to where the board feels it is appropriate.

There was further discussion and questions regarding time restraints and hiring at this time or waiting on litigation.

Bo stated the highlights of the terms given by Robcyn: The first two months the District will be charged $10,000 and the balance of ten months, the District will be charged $5,000 each month; either party may terminate contract with thirty (30) days notice; Robcyn is saying that they no way represent or have any authority with the courts or other agencies and can in no way guarantee that they will achieve the result the District is hoping for; and the scope of work is more broad than just the Rebel issue.

Boomer questioned the scope of work and who Robcyn would report to and their progress/accountability and receiving a summary of work completed; and Bo stated that the agreement does not state this, but that they will assist in anything that comes up.

Mark again stated that he wanted to make his position clear on this and that he liked what the attorney said and that they will assist in more than one issue, but he still feels that Robcyn would not be much help within the first two months when they are charging $10,000.

Bo commented that he wanted the public to be aware that the District would not be accruing legal fees on this because it will be covered by insurance through the POOL PACT.

Ted Miller made a motion to retain Robcyn LLC as consultants to the VVWD and authorizing and direction to the VVWD’s Interim General Manager to execute the retainer agreement to retain Robcyn, LLC as a consultant to the VVWD.

Karl questioned if we wanted to include in the motion that we receive a monthly detailed report.

Ted Miller included in his motion to receive an itemized statement monthly. Karl Gustaveson seconded this motion and it was carried by a vote of 3-1 with Mark McEwen opposed.

9. Discussion & Possible Action – Consideration of Issues Related to the City of Fallon’s Removal of the Water Tank they Purchased from VVWD in 2005 and which is Presently Located at the Site of VVWD’s Well #32. Action may Include Direction to VVWD Legal Counsel to take Reasonable Steps to Protect VVWD in the Event of Damage to Persons or Property During the Removal or Transport of Said Water Tank

Karl asked to confirm that Fallon has volunteered to provide an insurance policy. Bo stated that yes they would supply the insurance policy and that this was going to be a simple issue. Bo spoke with the City of Fallon’s attorney and they will put in writing to indemnify the District of any contractor that goes on VVWD property to remove this tank.

John Paul’s motion was to enter into an agreement with the City of Fallon and that they will agree to hold the VVWD harmless and indemnify the VVWD in the event that any liability arises against the VVWD. Ted Miller seconded the motion and it was unanimously carried. 4-0

10. Interim General Manager’s Report

Pet had not included a written report due to illness. Pete informed the board that we had a 10” line break by the Virgin River, but it was a transmission line and nobody was out of water and that this had been repaired. Also, someone ran over something on Leavitt Lane and this had been repaired.
Pete also informed the board that the 2001 F-150 had been surplused earlier today and that the high bid was $1,651.11.

11. Hydrologist’s Report

Boomer had not included a written report. He informed the board that he has been working on and with the Tule Desert settlement and the initial legislative action. Additional comment letters have been posted on the State Engineer’s website, but it doesn’t look like there will be a special session.

Boomer further stated that he has met with NDOT since they are looking for a site for an antenna site along with the Nevada Highway Patrol that will best suit them.
There was an auction today for 64 Mesquite Irrigation shares and they leased for $538.74 per share to River View, LLC for one year.

Boomer will be attending the Colorado River Symposium along with Karl on April 22, 2010 in Las Vegas and Boomer will also be giving a deposition on the Van Guard pipe case on this date also. Boomer will also be meeting with the ACOE in Los Angeles on the 26th of April regarding the aquifer recharge project.

12. Public Comment

Tim Hacker stated that he would like to compliment Supervisor Steve Tietjen and his crew for their work in repairing a broken water line in front of his house on Sunday.
Morris Workman questioned the musical chairs in the State Engineer’s office and was informed that Jason King was appointed the position.

Robert “Bubba” Smith stated that Robcyn, LLC would be beneficial to the VVWD.
Vaughn Higbee introduced himself as a consultant for Rebel Communication and that he would be attending meetings and in contact with the VVWD. Karl commented that since a lawsuit had been filed by Rebel against the District that his contact should only be with the VVWD legal counsel.

13. Adjournment

President John Paul adjourned the meeting at 4:38 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: 2010-04-20 (.pdf 25.K)