VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
JANUARY 4, 2011

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on January 4, 2011, at the Virgin Valley Water District Office at 5:00 p.m. Attending were Board Members Karl Gustaveson, Mark McEwen, Ted Miller and Sandra Ramaker. Board Member Kenyon Leavitt was not present, but participated by telephone for the first five items. Also present were Kenneth Rock General Manager, Bo Bingham District Council and Mary Johnson taking minutes and other interested parties of agenda items.

Board Member Karl Gustaveson called the meeting to order at 5:05 p.m.

Mark McEwen offered a Prayer and Sandra Ramaker led the pledge.

Public Comment: Bob Frisby with the Beaver Dam Water Company commented on item #6 on the agenda and passed out a Decision and Order No. 40-700494.0000 signed by Herbert R. Guenther, Director Arizona Department of Water Resources, to all the Board Members. Mr. Frisby stated his opposition of the Board approving item #6.

Also stating their opposition to item #6 was Steve Starset of Virgin River Communities, David Young of Beaver Dam and Nikki Stoddard also of Virgin River Community Board.

Travis Anderson of Bulloch Brothers Engineering commented on item #5 and stated that he was saddened to see that a local engineering firm was not contacted to provide a statement of qualifications and considered for engineering professional services for the VVWD.

John Paul, former President of the VVWD Board of Directors, wished everyone well in the new term.

1. Oath of Office to Re-Elected Board Member Ted Miller and newly elected Board Member Sandra Ramaker (re-elected Board Member Kenyon Leavitt will take and sign his oath of office on Wednesday, January 5, 2011.)

Notary, Mary Johnson, administered the Oath of Office to Ted Miller and Sandra Ramaker.

2. Elect Officers

Ken Rock opened this item for nominations.

Karl Gustaveson nominated Kenyon Leavitt for Secretary-Treasurer. Mark McEwen seconded this nomination and it was unanimously carried (4-0) with Kenyon Leavitt accepting the nomination.

Sandra Ramaker nominated Karl Gustaveson for President. Ted Miller seconded this nomination and it was carried unanimously (4-0) with Karl accepting the nomination.

Karl Gustaveson nominated Mark McEwen for Vice-President. Ted Miller seconded the nomination and it was unanimously carried (4-0) with Mark accepting the nomination.

Discussion: Board Comments – Sandra Ramaker thanked the people of Mesquite for electing her to the VVWD Board of Directors.

President of Board Comments – Karl Gustaveson stated that he was excited to have Sandra on the Board and looking forward to the next year.

CONSENT AGENDA:

Ted Miller made a motion to approve the consent agenda as listed below. Mark McEwen seconded this motion and the motion passed 4-0 with Sandra Ramaker abstaining.

1. Discussion & Action - Approve Agenda

2. Discussion & Action – Approve of Minutes from 12/21/10 Regular Board Meeting

3. Discussion & Action – Approve Bills Paid - $521,406.04

** End of Consent Agenda**

4. Discussion & Possible Action – Public Hearing on the intent of the Governing Board of the VVWD to issue general obligation revenue supported refunding bonds

Ken stated that this item was part of the process authorizing the recall of the 2001 Bonds and calls for a public hearing. If there is no public comment, the public hearing is just closed. Karl asked for any public comment from the public and/or board and there was none.

5. Consideration to approve open agreement for professional services as needed with Bowen, Collins & Associates

Ken began by stating that it was true that we could get statement of qualifications from qualified firms for this, but Ken is suggesting Bowen, Collins & Associates (BCA) for this because they are currently working on our Master Plan, and Rate Study and feels they may have a leg up on incidental engineering services. Ken suggested no more than $30,000/annually, but if any project would be over $10,000 he would come to the Board first for approval.

Karl informed the public that the District was not required to go out for bids for professional services. Mark stated that he believes it behooves us to use BCA, but that he also agrees with Travis with BBE and that we should include everyone in the future when it is appropriate, but doesn’t feel that this is one of those times when the District needs to go out for statements of qualifications. Kenyon stated that his concern was that he didn’t want anyone to think that the Board was showing favoritism to any one company and also questioned if this is not for any particular project, why would we need a contract. Ted questioned if we had a project for $3,000, would that automatically go to BCA and Ken stated, not necessarily. Ken further explained that having been a consultant in the past, it is helpful to have a firm such as BCA on contract if he would need something done quickly, an opinion on a drawing or design or to have representation at meetings, etc. when required; especially with the District not having an engineer on staff.

Travis Anderson with BBE questioned if they would be reviewing improvement plans that they had designed and Ken stated that no, they would not review their own plans.

Bo stated that a lot of the comments have been about the scope of services to be provided and it is not spelled out specifically in the contract and feels that it might be helpful in a legal standpoint to define what the scope is. Bo further stated that the word “open” was used in the agenda item and he is having some discomfort with the wording from a legal standpoint. Bo also commented on the terms of the contract and strongly advises the Board to consider revising Section 5 talking about indemnification where the District is to indemnify and hold the engineer harmless in a variety of situations, which he doesn’t feel are appropriate. Bo further stated that there is a portion in Section 9 that states ownership of all the documents would be BCA and depending on what they are doing, the Board may have a concern with this and may want to own the documents and be able to provide the documents to other engineers, contractors, etc. Bo further stated that revisions to Section 10A (indemnification), Section 11A (Utah laws govern should state Nevada laws will govern) and Attachment A should provide some type of scope of services.

Karl stated that maybe this needed to be reviewed by legal counsel and brought back at a later date certain for Board approval.

Kenyon had to disconnect from telephone participation at 5:45 p.m.

Bo further stated that if the Board so chose, they could go forward with the contract subject to revisions by legal counsel. Ken stated that he was okay with revising and bringing back for approval since there was no hurry.

Sandra Ramaker made a motion to table this item until the first meeting in February with legal counsel making assessments and changes to the contract as discussed. Ted Miller seconded the motion and it was unanimously carried. 4-0

6. Discussion & Possible Action – Consideration to revise contractual relationship with Wind River Resources, LLC/aka Canyon Creek Resources, LLC

Ken had provided a memorandum in the packet with challenges, possible public service factors, and questions to the Board and the original and amended contracts with WRR. Board discussion ensued regarding this item. Bo stated that the current contract was for 50 years, but that the contract could be terminated if WRR goes and applies for an export permit and getting all the authorizations from the state of Arizona and they fail to do that, then they can appeal that. If they appeal that and lose that appeal, then the contract is terminated; it is essentially rescinded and it is as though there was never a contract and both parties go their separate ways without any further liabilities or obligations.

There was further discussion regarding the contract and the agenda item as written and what would the revisions be to the contract. Bo answered stating that we cannot revise the contract unless the Board was so inclined to do so; second, technically WWR needs to make an assignment of their contractual obligations, rights and responsibilities to this new entity, Canyon Creek, which hasn’t happened; but if all of this came together and the District wanted to, they could modify the contract, but there is no obligation to do so. There was further discussion and until WWR does their due diligence in Arizona, we cannot do anything with the contract. The Board further emphasized that they do not want to be part of this aggressive business plan.

Bo offered some additional information after speaking with Bob Frisby, but also stated that he has not independently confirmed this, but Bob stated that WWR lost the lawsuit, the case was dismissed and the time for appeal has lapsed. If all this information is correct and can be confirmed, the contract is rescinded. Bo further commented that he believes the GM is attempting to look at all the options out there and if there was a win-win situation out there, it could be explored.

Mark McEwen made a motion to table this item until District’s attorney and general manager do the research to find out whether the contract has been rescinded or voided based on any of the legal activities in Arizona and bring this item back at that time. Additionally, if it is found that WWR have failed to appeal and we determine that the contract is dead, legal counsel should try to legally notify WWR, Canyon Creek Resources and their legal counsel by drafting a letter to determine if they legally agree with the District’s assessment of the contract. Sandra Ramaker seconded the motion and it was unanimously carried. 4-0

7. Discussion – Presentation on the diversion of water on the Virgin River – Presentation by Ken Rock & Aaron Bunker

Ken delivered a power point presentation with photographs of the diversions from the Virgin River in the Virgin Valley. Ken reviewed the surface water right allocations; what a share of water is; the lower Virgin River surface water allotments and a history of the diversions. Ken further reviewed the locations of diversions in the Virgin Valley and supplied information associated with the diversions resulting from recent flooding and what may be expected with future flooding and actions that may be optimized.

8. Discussion & Possible Action – Approval requested for up to $5,000 for helicopter service to access and read all mountain top rain gauges and to fly over the Virgin River to photographically record the percent of tamarisk removed by the December 2010 flooding

Ken stated that normally in October of each year the Hydrologist uses helicopter services to access the mountain-top rain gauges. This is a budgeted item and helicopter services have not been utilized this budget period. The cost is approximately $1,500 more than budgeted, since Ken would like to incorporate documentation of the percent of tamarisk removed by the December 2010 flooding. This information will also be helpful with the Habit Conservation Recovery Plan. At this time, it is inaccessible because of the snow.

Ted Miller made a motion to approve up to $5,000 for helicopter service to access and read all mountain top rain gauges and to fly over the Virgin River to photographically record the percent of tamarisk removed by the December 2010 flooding. Sandra Ramaker seconded the motion and it was unanimously carried. 4-0

9. General Manager’s Report

Ken had included a written report with significant events since his last report and explained that most of his time has been spent on field visits and meetings regarding the recent flooding.

10. Public Comment

John Paul stated that it is reassuring to him to sit in the back and how satisfied he is that the Board takes charge and that the general manager seems fully open.

11. Adjournment

President Karl Gustaveson adjourned the meeting at 6:56 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: 2011-01-04 (.pdf 30.K)