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

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on July 20, 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 Ken Rock District 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.
Kenyon Leavitt offered a Prayer and Ted Miller led the pledge.
Public Comment – There was no public comment at this time.

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

CONSENT AGENDA:

Kenyon questioned Boomer if he had a presentation regarding item #5 and Boomer stated that he had prepared a memorandum with information regarding this item. Mark McEwen also requested that item #4 be pulled from the consent agenda.

Kenyon Leavitt made a motion to amend the agenda moving item #9, Hydrology Report to be heard before item #5; to pull item #4 from the consent agenda and to approve items 1-3 on the consent agenda as listed below. Karl Gustaveson seconded this motion and it was unanimously carried. 5-0

1. Discussion & Action - Approve Agenda – Item #9 moved to be heard before item #5 and item #4 pulled from the consent agenda

2. Discussion & Action – Approve Minutes from 7/6/10 Regular Board Meeting

3. Discussion & Action – Approve Financial Statement for May 2010

** End of Consent Agenda**

4. Discussion & Action – Approve Bills Paid

Mark had questions on the procedure for the paying of bills and questioned if there was not a way to see and approve the bills before they have actually been paid. Mary and Kenyon explained that the policy is that no bills are paid without the General Manager approving them first, or if they are over $2,500, (and not a monthly bill for the maintenance and operation of the facilities, professionals’ monthly statements or bond payments, etc.), they are brought before the board for
approval before ordering.

Mark McEwen made a motion to approve the bills paid in the amount of $201,863.01. Ted Miller seconded the motion and it was unanimously carried. 5-0

9. Hydrologist’s Report

Boomer had supplied a memorandum to the board with background information and the District’s history on subsurface diversions for existing and future use of Virgin River water and the purchase of 5 acres associated with the Virgin River 140, LLC. Boomer stated that three monitoring wells, approximately 100 feet in depth and completed in the Virgin River alluvium have been drilled and are included in the Hydrologic Monitoring and Mitigation Plan (HMMP). Two of the wells are located on private land owned by Cedar Development Company LLC through an easement and the other collector well is located near Bunkerville Well #2 within the public easement.

Boomer further explained how and where the secondary collector well to divert Virgin River surface water was installed and the funding that was made available for construction; the ownership of the properties and easements on these properties; and the water quality of the secondary system.

Michael further informed the board that under the current BLM, Las Vegas Field Office (LVFO) Resource Management Plan (RMP) the area downstream of Bunkerville to the Riverside Bridge 85 is part of the Virgin River ACEC, in which site type facilities are not allowed; and that there is virtually no location to divert the surface water to serve future development with the exception of the private land downstream of the Riverside Bridge. The NDOT Right-of-Way is one of the few areas that can cross the Virgin River and that several points of diversions and existing water rights held by VVWD are anticipated to cross the Virgin River in the NDOT Right-of Way. Boomer further informed the board of the costs expended thus far on this 5-acre parcel.
Boomer continued to explain that the monitoring wells have been a critical part of the Virgin River Hydrologic Monitoring Mitigation Plan (VRHMMP); the process of VVWD and BOR drafting a new cooperative agreement and funds of 1.3 million available for the installation of a horizontal collector well that is an important diversion structure for VVWD supplying water resources to the western portion of the service area that could also be installed on this 5-acre parcel.

Kenyon questioned the easements and there was further discussion regarding the easements required for the District to utilize the parcel. Bo stated that the District needs an easement agreement and we need the ingress and egress path and the legal description that will be recorded with the County Recorder to include that all of the utilities will follow the same path. Bo further stated that he sees that the District has one shot, and one shot only, to get everything into this agreement that we will need now and in the future. We will need all of the utilities and all other uses of the property, everything that is conceivable, that we get it now with this agreement and then we record this agreement against the property and this way it will be binding not only on Virgin River 140 LLC; but also David Belding if he forecloses on the property and any future property owner that may take over this property. It was also discussed that the path should be a straight shot in lieu of the current path for entrance.

Ted questioned the funding available through the BOR and Boomer explained that with the new agreement he was working on, there will be 1.3 million available to the District and that the District’s portion would be 25%.

Boomer continued with his hydrologist report not related to item #5 and stated that he has been working with Robcyn and the Furman Group on the Gold Butte Area (GBA) and making sure that all District facilities and water rights in the GBA are all identified and taken back to DC for use in Federal Regulations.
Boomer reported on an earlier meeting with the Virgin River Habitat Conservation & Recovery Plan (VRHCRP) and trying to get that document finalized.

Mark McEwen requested that Boomer submit his Hydrologist Report with the packets in lieu of handing them out at the board meeting. The board members would like time to review the report before the meeting.

5. Discussion & Possible Action – Discuss the status of the transaction with Virgin River 140, LLC (“VR 140”) and the existing agreement for the Virgin Valley Water District (VVWD) to purchase 5 acres from VR 140. Possible action could include amending the agreement due to Clark County declining to approve dividing out the subject 5 acres that was to be purchased by VVWD

Mark commented that this issue was a long way away, but we needed to be prepared. Karl commented that he was not in favor of the location and feels that the District is in a bad position, but could lose the money already expended if we don’t try to utilize this location.

Bo stated that based on the situation as he understands it this is in discussions with VR140 as well as David Belding through his attorney, Jim Morgan. VR140 has defaulted on their obligations on the note to David Belding; David Belding holds a trust deed and is going to foreclose on the property and if he does, it is unfortunate to us, he could attempt to wipe out the District’s interests in the property, but it is what it is at this point. Bo continued and stated that the District needs to mitigate the damage based on the unfortunate terms of the transaction and ultimately this could end up being a good project for the District, but from a legal perspective, if we do not do anything, David Belding will likely foreclose and because we have not yet recorded a sufficient legal document against the property at this point, that would be more harmful to the District. There was further discussion regarding the BOR and the District’s requirements and timeframe to secure the 1.3 million from the BOR for this project.

Bo stated that because we do not have a recorded interest in the property and if it forecloses, there is no sufficiently recorded document from Belding agreeing to subordinate his interests to the District; but based on conversations with Jim Morgan, Belding is willing to subordinate that right at this time. Bo further stated that the District needs to delineate and finalize some of the easement issues, and when that is done and an agreement is prepared, we should get a signature from Belding.

Kenyon Leavitt made a motion to go forward with amending our purchase agreement and making it an easement agreement until such time as they can convey title to the District; and because VR140 is still on the title to the property, we need VR140’s agreement and because Belding has a trust deed recorded against the property, we also need his agreement to subordinate his trust deed to us with the intention that we will have one document with all the parties to sign. Kenyon also moved to direct Bo Bingham to work with Ken Rock and Michael Johnson to prepare an easement agreement and authorize the general manager to execute the agreement between VR140, VVWD and
David Belding to make sure that the District has finalized the scope of those easements on the 5-acre parcel and access to the 5-acre parcel for installation of a prototype horizontal collector well based on the record of survey as recorded in June by Bulloch Brothers Engineering.

Karl commented that once the minutes were typed up that it be reviewed and approved by legal counsel so that it reflects the proper verbiage.

Mark McEwen seconded the motion and it was unanimously carried. 5-0

6. Discussion & Possible Action – Consideration to Purchase Ten (10) Shares of Water Certificate Numbers 236 and A-173 from Janice Draskovich

Kenyon commented that before any decision is made to purchase additional water we need to look at Ordinance II fees and the 2008 Bond and see what we’re going to do to alleviate debt. Kenyon further stated that he has always been in favor of purchasing water, but not at this date and time. Karl stated that he concurred with Kenyon’s comments and also commented on what is the “fair market value” of water shares and what we are actually going to offer when we purchase more shares and that the fair market value may have decreased by more than half with no one else purchasing water. A discussion of Ordinance II fees and the monthly obligations required from this fund and the 2008 Bond and what this money may be used for ensued.

Kenyon Leavitt made a motion to not purchase this water at this time and to send a letter to Mrs. Draskovich regarding the District’s financial situation and that they may come back in six to eight months to see if things have changed so that the District may consider purchasing water at that time. Karl Gustaveson seconded this motion and it was unanimously carried. 5-0

7. Discussion & Possible Action – Consideration to Approve Professional Service Agreement with TerraSpectra Geomatics for Geographic Information Services Not to Exceed the Amount of $15,000

Boomer had included a memo and a draft professional services agreement with TerraSpectra Geomatics (TSG) and stated that we have utilized these services for an extended period of time. TSG is a woman owned small business and maintains the existing digital coverages and numerous digital databases have been developed for the District to assist in making effective decisions regarding development of the water resources and address potential impact that increased development may have on the existing and future projects. The District budgeted $15,000 for fiscal
year 2010/2011; having cut this amount from $25,000 in the past and page 9 of the agreement should be changed from $25,000 to $15,000. TSG holds all the District’s GIS information and reports digitally, but they are owned by the District.

There was further discussion regarding TSG services and the need for these services.

Bo’s legal comments included that the board should make a finding that this is a
professional services agreement for purposes in the minutes and is not required to go through the bidding process as other contracts; page 9 & 10 should be changed from $25,000 to $15,000; page 3, paragraph 4.6 should be changed from “MANAGER” to the “District”; page 5, paragraph 9.2 contains good indemnifications stating that the District is the owner of all originals, products,
correspondence, exhibits, etc. and able to terminate with 30 days notice; the scope of work is not very substantial, but as long as Ken and Boomer are delineating what the scope is, it should be okay.

Mark McEwen made a motion to approve Professional Services Agreement with TerraSpectra Geomatics; that we specifically say that on pages 9 & 10 will read $15,000 and not $25,000; that page 3, paragraph 4.6, page 4, paragraph 7.9 (7.6[sic]), and the scope of work be reviewed by counsel before agreement is signed; and that we have our General Manager and Hydrologist closely monitor the funds that are being spent there. Karl Gustaveson seconded this motion and it was carried by a vote of 4-1 with Ted Miller opposed. 4-1

8. Interim General Manager’s Report

Pete had included a short report thanking the board and counsel for being so supportive during this period and that the leaks had been picking up with the rise in temperature.

10. Public Comment

Sandra Raymaker suggested that the District close one day a month to reduce costs.

11. Adjournment

President John Paul adjourned the meeting at 4:45 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: 2010-07-20 (.pdf 23.K)