VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
NOVEMBER 16, 2010

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on November 16, 2010, at the Virgin Valley Water District Office at 5:00 p.m. Attending were Vice-President Karl Gustaveson and Board Members Ted Miller and Mark McEwen. President John Paul and Secretary-Treasurer Kenyon Leavitt were not present. John Paul participated by telephone for a few items. Also present were Ken Rock District General Manager, Bo Bingham District Legal Counsel and Mary Johnson taking minutes and other interested parties of agenda items.

Vice-President Karl Gustaveson called the meeting to order at 5:00 p.m.

Mark McEwen offered a Prayer and Ted Miller led the pledge.

Public Comment – Robert “Bubba” Smith thanked the District for their participation in last week’s meeting, but he commented that even in good financial times he has not been one to go out for consultants to do studies. Bubba stated that he was very impressed with the skill level and the amount of information provided by the District within house and other entities, and he believes that we have the quality and skill sets to move forward in the short interim basis. Consultants may be required further down the road, but he feels that at this time, no consultants should be required.

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

CONSENT AGENDA:

Ted Miller made a motion to approve the consent agenda items 1-7 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 11/2/10 Regular Board Meeting

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

4. Discussion & Action – Approve Bills Paid - $372,522.80

5. Discussion & Action – Ratify Approval of Purchase Orders Over $2,500 for Arsenic to be reimbursed 75% by ACOE

a. Tradewest Construction - $92,353.68.00 – Arsenic/prepare and pave road from Highway to Plant 29

b. Alford, Inc. - $220,239.36 – Arsenic/Re-grade and install asphalt on access road to Plant #32

c. Legacy Construction - $8,190.00 – Arsenic/Plant #32 grade and place 3” type II on 12,600 SF inside gate

d. Legacy Construction - $17,962.56 – Arsenic/Plant #32 sub-grade and place 3” type II around tanks

e. Legacy Construction - $10,260.00 – Arsenic/Plant #32 sub-grade and place 3” type II between buildings and tanks

f. AUMA Actuators, Inc. - $9,890.00 – Arsenic/Treatment plant materials

g. Hach, Inc. - $20,139.04 – Arsenic/Treatment plant materials

h. Mid-West Associates, LLC - $44,038.20 – Arsenic/Treatment plant materials

i. Tiberti Fence Co. - $3,760.00 – Arsenic/Replace gate motor at Plant #32

6. Discussion & Action – Approval of a proposed workshop on January 18, 2011 at 3:00 p.m. for review, revisions and modifications to District’s Operating Rules, Regulations & Rates and Administrative Policy, Rules & Procedures Manual

7. Discussion & Action – Approval of a proposed workshop on February 1, 2011 at 4:00 p.m. with Draper & Gleave, LLC to compile a list of accounting tasks desired by the District

** End of Consent Agenda**

8. Discussion & Action – Approval of Purchase Orders over $2,500 for 18” emergency line repair

a. Tradewest Construction - $35,000 plus time & materials for extra work – Ratify approval of 18” emergency line repair

b. Pride Contractors and Legacy Construction – Approval in principle of invoices for damage repair due to flooding from line break

Ken stated that we added to the scope of work when we found out that not only was the 18” line separated and damaged, but when the hole was washed out while the water was escaping, the pavement dropped on the lines next to it and also bent the connections between the valves and pipes so there was some extra work. We received a bill for $16,704.89 from Pride, which includes Legacy’s costs. We also got a bill from Pride Construction and we were billed $1,226.81 for repairs at Mesa and Eureka entrance for the 8” waterline break.

(John Paul’s telephone connection was lost)

Ted Miller made a motion to approve purchase orders over $2,500 for 18” emergency line repairs submitted by Tradewest Construction and Pride Contractors, which includes Legacy Construction and invoice yet to be sent for extra work from Tradewest Construction. Mark McEwen seconded this motion and it was unanimously carried. 3-0

(John Paul was called back)

9. Discussion & Possible Action – Consideration of a potential change to District’s Operating Rules, Regulations & Rates policy to allow for the transfer of a meter from one property to another

Karl stated that our attorney had looked into this and he would let Bo explain. Bo explained the Board’s current policy of not allowing the transfer of meters; but that he had also put together a list of items or criteria/parameters that would allow the transfer of meters if the Board chose to amend policy and allow this in certain circumstances. Bo stated that the first requirement would be a title report. The owner/developer requesting the transfer must provide the District with a title report for the property where the water meter is presently located so the District can confirm ownership of the property. The second requirement would be the owner’s authorization. If the person requesting transfer is not the owner of the parcel, the person requesting the transfer must provide the District with the property owner’s written consent to the removal of the water meter from the owner’s property. The third requirement would be the cancellation of building permit. The person requesting transfer must provide the District with written documentation verifying that any building permit issued for the property where the meter is located has been terminated, cancelled or rescinded or has expired. The fourth requirement would be the payment of transfer fees. The District should charge the person requesting the transfer a fee which will cover the District’s expenses for transferring and relocating the water meter, including outside labor and administrative costs.
Bo also had included criteria to refund Ordinance II fees whereas the person requesting a refund of Ordinance II fees must provide a title report; provide documentation verifying that the property where fees paid has reverted back to raw acreage; and retention of a portion of fees. However, the matter to be discussed tonight was the transfer of meters.

There was further discussion how this item would work if the Board decided to change policy, but it wouldn’t be on paper before looking at item #10. Bo explained that whatever the Board’s decision, it would be effective as of this date, and putting it on paper in a policy could theoretically be done at any time; and this contractor or any other that wanted to move a meter could do so if they meet the criteria the Board sets.

There was discussion regarding fees for moving impact fees, but the meter fee has not been paid; property being taken down and made a parking lot or other use where a meter is no longer required, and what happens with those meters. Mary stated that in the case of property being taken down and a meter is no longer required; the owner would pay a locked meter fee and when a use came up for that meter later, they would have that meter available for the new location. Bo further stated that his handout only mentions the “transfer of meters”, but all the parameters for transferring in this situation would also apply to impact fees; but if there is no meter installed, there should only be an administrative fee, in lieu of the proposed $200 for actually moving a set meter.

Mark asked Mr. Graves if there was a time-frame he was looking at since this matter began over a year ago and has been tabled a few times. Trent stated that he may want to do this sometime before January. Mark stated that he wasn’t quite sure he was comfortable with this yet and thought that there were too many questions to be answered. Mark further stated he would like to see a policy before actually adopting different Rules & Regulations. Karl stated that we could adopt the
changes presented and there would only be a question of what fees would be. Bo stated that he had only looked at the legal issues and the Board only needed to decide what fees they wanted to charge. Ken stated that he thought the Board could make a motion and change the policy and then it would be incorporated into the Rules & Regs after the workshop and meeting to be in January.

Mark McEwen made a motion to propose a change to the District’s operating Rules & Regulations in reference to the transfer of meters and impact fees and that we direct legal counsel to draft a policy including any appropriate fees the District needs to charge for our costs and to incorporate this at the scheduled workshop in January. Ted Miller seconded this motion and it was unanimously carried. 4-0

10. Discussion & Possible Action – Consideration to approve request by Advanced Construction to transfer impact and connection fees from Calais lots 1083 Falcon Nest and 1035 Raptor Circle to other locations to be specified

Bo stated that the Board would have a standing policy sometime in February that would apply to Advanced Construction’s request; but that the Board may ask Trent if he had anything further to add to this item before moving on. Trent stated that he would like to see the criteria.

No action was taken.

11. Discussion & Possible Action – Consideration to approve proposal from Bulloch Brothers Engineering for design services requested by the District for improvements to help protect the distribution system from destructive high pressure surges and to add a valve to better isolate sections of the piping for maintenance and repair and to correct a drainage erosion problem for a total proposed fee of $19,500 – Presentation by VVWD General Manager and Bulloch Brothers Engineering

(John Paul’s telephone connection was lost)

Karl first commented that some of these issues were brought up by employees stating that this could happen and it did. Ken distributed handouts and presented a slide show illustrating the 18” line separation and the damage caused on 11-2-10; proposed system protections; and the 8” line corrosion failure on 11-11-10. Ken then introduced Travis Anderson with Bulloch Brothers Engineering (BBE).

Travis asked if there were any questions and then continued with his presentation.
 
Travis had broken out the proposal into sections where they deemed necessary, in that, if the Board thought something was not as critical, they would not have to approve that section(s). Travis stated that he had spoken with staff and received their input as to what they would like and he was
informed that some of the pressure relief valves higher priced items are currently in stock at the District facilities; also there was coordination time between the City and Regional Flood Control.

Ken stated that the drainage protection at Well #32 was the most expensive; the money needed for these improvements would come from the District’s reserves; and felt that the pressure relief valves were the most pressing project.

There was further discussion regarding costs compared to completing the project now or having more failures and having to pay for repairs later. Ken stated that he would like all four of these projects bid out separately and if #4 was too much, then we would not do at this time.

Ted Miller made a motion to approve proposal from Bulloch Brothers Engineering for design services requested by the District for improvements to help protect the distribution system from destructive high pressure surges and to add a valve to better isolate sections of the piping for maintenance and repair and to correct a drainage erosion problem for an amount not to exceed $19,500. Mark McEwen seconded the motion and it was unanimously carried. 3-0

A five minute break was taken at this point.

12. Discussion & Possible Action – Review of the Draft Rate Study dated October 2010 as prepared by Bowen, Collins & Associates and consideration to approve as final – Presentation by Bowen, Collins & Associates (BC&A)

Joel Andrus with BC&A began by stating that this was basically being presented tonight since the Board passed the rate increase a few weeks ago and this was just finalizing that report and giving the Board a “heads up” what BC&A’s recommendations would be in the future and hopefully allow the District to provide great service and still stay in the black. Joel continued to review the rate study with the Board and explained how they came up with the information provided. Some recommendations from BC&A are a rate increase of 36%, which has been implemented; review rates every one to two years with a comprehensive review every five years; and the District may consider setting block rates for different size meters, this being more equitable. Joel stated that additional considerations were that the District should make sure that their impact fees and Ordinance II fees are covering the costs that they should be covering and this way the cost of new development is not a burden on the existing users; capital improvement projects are critical and BC&A strongly recommends that the District begin funding a facilities replacement account.

There was discussion and questions answered regarding the presentation.

Don Paff asked how long before the District would be looking at an increase in rates and Joel stated that it should not be before five years.

Ted Miller made a motion to accept the final draft of the rate study as presented by Bowen, Collins & Associates. Mark McEwen seconded the motion and it was unanimously carried.

13. Discussion & Possible Action – Consideration to advertise for “Request for Proposals” for auditor to audit fiscal year ending June 30, 2011 – Presentation by Draper & Gleave, LLC

David Waite with Draper & Gleave distributed handouts pursuant to the Board’s request for a report on the pros and cons of auditor rotation. David stated that there are no current laws requiring auditor rotation at a government, private or public level. David further stated that saving money is not one of the reasons to rotate auditors. The primary purpose of an auditor is to find risks within an entity; test that risk; and ultimately give a report that your numbers are materially correct and hopefully provide suggestions as an entity you can better run on the financial statement process side. David then reviewed the pros and cons as presented.

Recommendations provided were that the District retain Hinton Burdick CPA’s to complete the 6/30/11 audit since the District is considering accounting personnel changes in 2011 and training new personnel along with having to bring on a new auditor may be too much “new” going at the same time; after the completion of the 6/30/11 audit, advertise an RFP for the 6/30/12 thru 6/30/14 year end audits; and create a scoring methodology that would be based on references, experience, price, presentation, recommendations and other factors established by the Board and management. David further stated that Morris Peacock with our current auditing firm would be willing to assist in the process of going out for RFP’s.

Ted stated that the District just went through a very serious financial problem and at no time did anyone raise any red flags over the situation and feels that it is time for change. There was further discussion regarding responsibilities and duties of the District’s accountant versus the District’s auditors. Ken stated that more energy was needed for the daily accounting and thought that the Board should follow Draper & Gleave’s recommendations to wait another year before looking for another auditor. There was further discussion regarding the length of time that Hinton, Burdick has been conducting the audit; the problems incurred by the District; responsibilities; and time frame to follow.

Bo stated that if the competence of the District’s current auditor was going to be discussed at the workshop scheduled in February, they would need notice in advance because under NRS we would have to give them notice that the possibility of their competence is going to be discussed.

The item died for a lack of a motion.

14. Discussion & Possible Action – Consideration to advertise for auction the lease of 35 shares of Bunkerville Irrigation water whose lease expires on 1/1/2011; and 86 shares of Mesquite Irrigation water that are currently available

Ken commented that he has spoken with his hydrologist and City reps and feels that no change is required now regarding the leasing of shares for a one-year period.

Ted Miller made a motion to advertise for auction the lease of 35 shares of Bunkerville Irrigation water and 86 shares of Mesquite Irrigation water on December 7, 2010 at 10:00 a.m. Mark McEwen seconded the motion and it was unanimously carried. 3-0

15. Discussion & Possible Action – Consideration to approve revisions to emergency and one-time purchase authorizations for the General Manager currently under Resolution 2002-1 and consideration to either incorporate into Administrative Policy, Rules & Procedures Manual or to adopt as a Resolution

Ken stated that legal counsel has put together a summary on this. Bo stated that NRS 332 and NRS 338, which govern the use of public funds is extremely complex. Bo would recommend, if the Board decides to keep the policy as it is, changes to the verbiage of the current resolution for legal purposes. If the Board decides to adopt a policy and change the amount to $25,000, this would be consistent with both NRS 332 and 338; both of which start at $25,000. Bo further stated that he strongly suggests a workshop or at some other meeting, go over the use of public funds in great detail so everyone understands what the parameters are and what the law requires.

Ted Miller made a motion to incorporate this item for discussion at the workshop scheduled for January 18, 2011. Mark McEwen seconded the motion and it was unanimously carried. 3-0

16. General Manager’s Report

Ken had included a written report of the daily activities since the last meeting. Ken reported that in the workshop held 11-10-10 with the City and local golf courses it was suggested that we develop a scope of recognizance level study on the long term solutions with the City’s review; meet on February 9th with suggested responses to five-year golf course requests; and who is going to “foot the bill”. Ken suggested forming an executive committee to review proposals from consultants consisting of one member from the VVWD, one from the City, two golf course reps and one Lincoln County Highland’s rep. There was further discussion as to how this would be accomplished and who would pay for the study.

Ken also informed the Board that he would like to invite Lincoln County Water (LCWD) to make a board/public presentation on two things: the values and costs of bringing Tule Desert water to Lincoln Highland’s annexations for the cost of that for equivalent residential unit per hook-up and the cost per 1,000 gallons based on 1, 5, 10, 20,000 units; and then what they have in secondary water for golf courses.

17. Public Comment

Morris Workman with Mesquite Local News asked about the executive committee and if it would be a public organization and would hold public meetings. Ken stated that his idea was that it would be public meetings.

 

18. Adjournment

Vice-President Karl Gustaveson adjourned the meeting at 7:55 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: 2010-11-16 (.pdf 39.K)