VIRGIN VALLEY WATER DISTRICT SPECIAL BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
MAY 19, 2011

Minutes of a Special Board Meeting of the Virgin Valley Water District Board held on May 19, 2011, at the Virgin Valley Water District Office at 5:00 p.m. Attending were President Karl Gustaveson, Vice-President Mark McEwen, Board Members Ted Miller and Sandra Ramaker. Secretary-Treasurer Kenyon Leavitt was not present. Also present were District General Manager Ken Rock, District Legal Counsel Bo Bingham, District Hydrologist Aaron Bunker, District Administrative Assistant Mary Johnson taking minutes and other interested parties of agenda items.

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 – Tim Colbert with Pulte questioned if public comment would be allowed on agendized items and stated that he had a couple comments regarding item #10. Tim read from a handout stating that #2 states that it is advantageous for the golf courses and he doesn’t feel that it is and his second point was that the metered service had passed twice before the Board and now with changing, Conestoga Golf Course has seen an 18% increase from two weeks ago. Tim also questioned the market value of $300 when the District has not been able to lease all their available MIC shares.

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

CONSENT AGENDA:

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

1. Discussion & Action - Approve Agenda

2. Discussion & Action – Approve Minutes from 5/3/11 Regular Board Meeting

3. Discussion & Action – Approve Minutes from 5/5/11 Budget Work Session

4. Discussion & Action – Approve Financial Statement for March 2011

5. Discussion & Action – Approve Bills Paid - $273,181.43

** End of Consent Agenda**

6. Discussion & Possible Action – Consideration to approve an increase in the amount of the contract for government and legislative affairs consulting – Requested by Randy Robison with Capitol Strategies

A letter with an explanation for this request was submitted by Randy Robison. Ken stated that Randy has proven his value to the District in his ten-plus years working with the legislature, particularly at this time with issues regarding Lincoln County, water right issues, etc. Ken further stated that Randy had provided a pretty good list of why an increase is warranted. Randy also is a lobbyist for the City of Mesquite and is very involved and protective of the interests in this area. Ken feels personally that Randy would continue his services without an increase, but doesn’t feel that’s inappropriate for considering how little he’s been paid compared to other lobbyists and the value he provides to us in these difficult times.

There was further discussion and comments by the Board. Ted stated that he dislikes lobbyists and feels that we have elected officials to handle. Mark mentioned how little he gets paid and Randy’s rates were compared to other lobbyists for the District. Sandra agreed that Randy has done a good and an increase is probably warranted, but maybe we could split the difference. Ken stated that maybe we could offer half this year ($500) and then the other half ($500) next year.

Mark McEwen made a motion to approve an offered increase to Randy Robison of $500 per month for the next fiscal year with the understanding that the Board will review again in a year with the possibility of increasing another $500 per month. Sandra Ramaker seconded the motion and it passed by a vote of 3-1 with Ted Miller opposed. 3-1

7. Discussion & Possible Action – Consideration to approve addendum to agreement to provide consulting services between Robcyn, LLC and the VVWD to extend for twelve months through April, 2012.

Ken stated that both Barry Stubbs and Mike Ford have had careers in public agencies such as the BLM, and they are interfacing the District with these other agencies. Ken also stated that they made it easier for us to get by with the paving up to our reservoir; they will help with the BLM on well #30 site with the radio tower; but most importantly, they are facilitating the HMMP and the HCRP with the City and the District. Ken recommended that we continue their services and to look at yearly.

Aaron explained how their assistance is helping with the HMMP and how they will be of tremendous help with easements and right-of-ways on BLM land where no records can be found now.

Ted mentioned that he thought when we began their services, it was only to be for a year and Karl stated that their scope of work has changed since we first hired them. There was further discussion regarding well #30 site, the scope of work they were hired for and continuing service.

Bo stated that he had some comments on the contract stating that initially they were contracted for the tower issue and that they were key in making sure everything was okay with the BLM even though this issue has not been resolved. Other concerns Bo has with the contract is that they are asking for an extension for another year on the same contract which states that the District would pay them $10,000 for the first two months and then $5,000 for the remaining ten months. Bo doesn’t feel that this is what they expect but that it needs to be spelled out that it is only for $5,000 per month. Bo further stated that the scope of services originally presented to the District did not have a fourth item that we had previously asked them to include in their scope of services. Bo feels that since we pay them a flat fee, they should do absolutely everything that we can have them do; and one of these was to assist in litigation and Bo would like to increase the scope of services to include this. The District also requested that they provide a monthly summary of services rendered and this also should be included in the scope of services.

Sandra Ramaker made a motion to approve a 12 month contract with the updates discussed. Karl Gustaveson seconded the motion. The motion died by a 2-2 vote with Ted Miller and Mark McEwen opposed. 2-2

There was further discussion and whether to bring back with a full board. Mark proposed that Mr. Stubbs and Mr. Ford come to the next board meeting and explain their services in more detail. Bo also mentioned that we may be able to negotiate as with Capitol Strategies.

8. Discussion & Possible Action – Public Hearing on Tentative Budget and Approval of Final Budget for Fiscal Year Ending June 30, 2012

Ken began by summarizing the massive changes from the last budget. Ken further stated that he was proud of this budget and the costs that were cut; it is more economical; and with a positive on the bottom line, the District will be able to start putting money away for depreciation seven years sooner. Ken reviewed the budget summary sheet and explained the changes. Ken then began reviewing the budget and explaining where the District had saved money in salaries, utilities, repairs and maintenance and capital improvement projects. Ken asked the Board to re-consider the part-time employees and the reasons for his request, but it was not added back in. Ken also stated that if the budget again looks this good next year, he would like to add in a staff engineer.

Karl opened the item to the public with John Paul stating that he would like to compliment the Water District’s conditions now.

Sandra Ramaker made a motion to approve the tentative budget as filed with the State with changes made regarding the District’s lobbyist, Randy Robison as the final budget for fiscal year ending June 30, 2012; and in the event that the State would want to pull money from our reserves, the District can revise the budget within thirty days. Ted Miller seconded this motion and it was unanimously carried. 4-0

9. Discussion & Possible Action – Consideration to approve a License and Indemnification Agreement with Theron Jenson, as Trustee of the Elisa Biasi 1983 Trust (the “Trust”), to grant the District a revocable license to access certain real property owned by the Trust for purposes of monitoring wells located on such real property and to authorize execution of a conflict waiver to allow the District’s general counsel, Bingham & Snow, LLP, to draft the License and Indemnification Agreement based on Bingham & Snow’s concurrent representation of Theron Jensen as Trustee of the Trust.

Bo stated that his firm was representing Theron Jensen as Trustee of the Trust. Bo further stated that Aaron had approached him regarding wells located on the Biasi property and that there was no legal document signed stating that the District has access to the wells on this property. Bo approached Theron and Theron is fine with this as long as the Trust is secure. This way, District employees can access the property without the Trust being responsible for any possible accidents that may occur. Bo also stated that while there is a conflict of interest because Bingham & Snow represents both the District and the Trust in this matter, the agreement was requested by the District; it benefits the District; the conflict can be waived; and that the agreement presented was a standard agreement.

Mark McEwen made a motion to approve the License and Indemnification Agreement with Theron Jensen as Trustee of the Elisa Biasi 1983 Trust which grants the District a revocable license to access certain real property owned by the Trust for purposes of monitoring wells located on such real property and to authorize execution of a conflict waiver to allow the District’s general counsel, Bingham & Snow, LLP, to draft the License and Indemnification Agreement based on Bingham & Snow’s concurrent representation of Theron Jensen as Trustee of the Trust. Ted Miller seconded the motion and it was unanimously carried. 4-0

10. Discussion & Possible Action – Discussion of options for the leasing of the District’s irrigation water shares in the Mesquite Irrigation Company and the Bunkerville Irrigation Company on a traditional per share basis as the District has done in the past. This item may also include a discussion of Ordinance 5 and its interrelationship with the District’s prospective traditional leasing of irrigation shares. Possible action may include but is not limited to establishing the terms and details for the District’s traditional leasing of irrigation shares, the length of time for such leases, a possible fee for locking in a long term lease, the cost per share for leasing the irrigation share, whether leased water may be subleased and if so on what terms, whether there may be other fees associated with the leases, how the irrigation shares will be offered to the public for lease, and all other parameters and details related to the District’s leasing of irrigation water shares.

Ken introduced the item stating that concerns by Jeff Johnson, Chief Hydrologist for SNWA, the irrigation companies, and our Hydrologist, Aaron Bunker, regarding the metering, point of use and quantities have been brought up. Ken further stated that in order to achieve the goals for long term leasing for the golf courses, while quelling the concerns of the issues raised by other parties, and for the best interests of the District; revisions to Ordinance 5 have been done for leasing water long term in lieu of metering water to the golf courses.

Bo continued stating that these issues were raised by Aaron Bunker and Jeff Johnson and if the irrigation water was solely metered, it would not be in the best interests of the irrigation water users or the District. Those concerns were also shared by the irrigation companies. In an effort to limit potential issues in the future and interruptions to a user, we think that this proposal is a balanced proposal. If approved, this proposal could still allow a user to lock in a rate for up to eight (8) years, while limiting the District’s exposure to the issues raised by Aaron Bunker and Jeff Johnson. Bo explained that the proposal was put together so quickly because the golf courses have expressed a desire to move forward quickly and the board has already discussed many of these issues in past meeting. However, Bo also explained, that the Board may want to take more time to review these issues before taking action. Karl stated that he would like to work through it because summer was almost here and also asked if the lock in fee was more or less expensive because he wanted to stay within the parameters that were part of the first negotiations.

Aaron explained that the rate lock fee proposed per share was equal to what would have been charged under Ordinance 5, but if the water was metered, the user would be paying less due to not having to pay for as much water during the winter.
Ken stated that it was proposed to lease at $300 per share, but that leasing at $250 per share would be closer to the metering rates of .10 cents/1,000 gallons. Ken also thought that the golf courses could sub-lease in the winter and they could get their revenue back that would compensate for that.

Karl stated that the document does not spell out the leasing term. Bo stated that the proposal was not provided as a final document for signature. Bo gave background information regarding NRS and issues with leasing for more than one year, but that we could word the contracts to give those leasing water a first right of refusal to continue leasing the water the following year. Bo further stated that the lessee could have a guaranteed price for 8 years and if reviewed annually, they may not require as many shares the following year and would have the first right of refusal so they would have water continuously. There was further discussion regarding the amount of water per share and if you go by shares and if metered, this would open up issues.

The item was opened up to the public. Rob Fuller with Wolf Creek Golf Course commented that since the information was just recently received he was trying to comprehend and felt that a “Will Serve Letter” by nature would be a perpetual water supply with only a lock rate fee for eight years. There was further discussion and explanation of continued service by first right of refusal, cost/price difference in metering vs. per share. Bo stated that no Will Serve Letters have been issued under Ordinance 5 as passed at the last meeting, he also wanted it known that if this matter was not handled appropriately it could raise very serious issues. Bo also stated that we’ve only touched upon one issue i.e., the possible uncertainty of the amount of water in a share; another issue could be the place of use; and if this is not handled appropriately, it could harm everyone who owns shares in Mesquite Irrigation Company.

There was further discussion with input from the public, regarding the State Engineer, peak use, how leasing Virgin River water was set up and year round usage and subleasing shares.

Bo thought it may be helpful to get together with the VVWD Board and staff, golf course representatives and the irrigation company representatives for a workshop to determine the best ideas for a final decision.

There continued to be a lengthy discussion regarding the terms; whether to have a workshop; subleasing; issues previously mentioned; and Ordinance 5.

Mark McEwen made a motion directing the General Manager, Legal Counsel, Hydrologist, and any others that the General Manager sees fit, to establish the terms and details for the District’s traditional leasing of the irrigation shares and to return a document at the next meeting for final approval. Ted Miller seconded this motion and it was unanimously carried. 4-0

11. Discussion & Possible Action – Consideration of and possible action to appoint an Assistant General Manager to manage the District in any absence of the General Manager due to medical leave, vacation, or similar temporary absence. Pursuant to the requirement of NRS 241.033, notice is given that this is an item that could involve a discussion of potential candidate’s “character” and “professional competence” as those terms are referenced in the statute.

There was discussion as to whether they were actually appointing a new assistant general manager and creating a new position; and Bo read from the current by-laws and stated that the assistant general manager would just stand in if the General Manager was gone for any period of time and that this would not be a new position. Karl suggested that the Board give their comments and Sandra commented that maybe they should look to the General Manager for his opinion.

Ken stated that William “Pete” Peterson took on the role of interim general manager before Ken was hired and Pete has stated that he would rather not hold that position again. Ken further stated that other supervisors know their position and do quality work, but communication skills would not be at the level required. Ken stated that Aaron Bunker is aware of the field operations and that his communication skills are very good, especially verbally, and that he is capable of making clear and valuable decisions and is confident that Aaron would protect the District’s interest.

Ted Miller made a motion to appoint Aaron Bunker as the Assistant General Manager to manage the District in any absence of the General Manager due to medical leave, vacation, or similar temporary absence. Mark McEwen seconded the motion and it was unanimously carried. 4-0

12. Hydrologist’s Report

Aaron had included a small written report, but also stated that the majority of his time has been spent on item #10/the leasing of irrigation shares and the budget.

13. General Manager’s Report

Ken had not included a written report and stated that “ditto” on Aaron’s remarks that he has been working on the leasing of irrigation shares and the budget.

14. Public Comment

Duane Magoon of Bunkerville commented on the measurement of ‘shares’ and how much land could be watered per a ‘share’ and concerns of the irrigation companies regarding this.

Don Paff of Bunkerville also commented that the Board should be very sensitive what they are doing with water rights especially now with the State Engineer’s office being scrutinized.

15. Adjournment

President Karl Gustaveson adjourned the meeting at 7:32 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.

•  Special Board Meeting Minutes: 2011-05-19 (.pdf 26.K)