VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
AUGUST 2, 2011

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on August 2, 2011, at the Virgin Valley Water District Office at 5:00 p.m.  Attending were President Karl Gustaveson, Vice-President Mark McEwen, and 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 Accountant Wesley Smith, 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 – There was no public comment at this time.

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

CONSENT AGENDA:

Ted Miller 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 7/19/11 Regular Board Meeting

3. Discussion & Action – Approve Bills Paid - $294,815.12

4. Discussion & Action – Approve Purchase Orders Over $2,500
a. Kitchen Encounters - $10,000 – Ratify approval of office remodeling

** End of Consent Agenda**

5. Presentation & Discussion – Robcyn will present how they can set up a system for the District of federal land records for permits, grants, and rights-of-way.

Barry Stubbs representing Robcyn, LLC, along with Joe Liebhauser, were present.  Mr. Stubbs began by stating that they were pleased to be in their second year of a contract with the District representing the District with federal lands and agency issues.  In the past year, Barry stated that they have notice deficiencies with the land records relative to different permits, grants, easements, etc. with the federal land surrounding the community.  A lot of the District’s facilities are located on these lands and it would be good idea to set up a system to keep track of what the District has and the dates that some of these mature; since they can go to 50 plus years.  Barry mentioned a similar circumstance that happened with another community where they did not have a tickler system and were unaware that their lease had expired.  Robcyn is willing to set up a system to keep the District’s records straight and on top of the issues.  Barry stated that Merv Boyd and Joe Liebhauser would be assisting the District with the set up of these files and stated that these gentlemen have extensive experience in dealing with federal agencies and record keeping.   Barry also stated that setting up this record keeping system would be covered within the standard contract between Robcyn and the District. 

Joe Liebhauser distributed handouts to Board and staff and explained how the system would get laid out.  Joe demonstrated and reviewed a dummy file and how the BLM set up their files.  The District’s files would be set up the same way so communication between agencies would be much more productive as everyone would be looking at the same documents.

6.  For Discussion & For Possible Action – Consideration of continued allotment of irrigation shares for long-term leasing.  Discussion may include a chronology of events leading to the allotment of BIC shares for long-term leasing.  Possible action may include, but is not limited to, confirmation and ratification of current policies for the leasing of irrigation shares or revision and adjustment of policies for the leasing of irrigation shares. – Requested by Robert Draskovich

Mr. Bob Draskovich stated that he has been interested in irrigation shares for a while and he didn’t want to miss the auction to bid on shares.  Mr. Draskovich explained to the Board the process he went through of coming into the District office and checking on trying to lease shares, dates he came in, and who he spoke with.  Mr. Draskovich mentioned a land swap deal between the Bunkers and himself and stated that he was speaking with Robert Bunker about irrigating when he discovered that there might be an issue with priority regarding the 12 shares he had requested from the District.  Mr. Draskovich stated that Mr. Bunker thought that there may be some mistake because the Bunkers were at the District first and there wouldn’t be enough water for Bob Draskovich to lease and that he may want to contact district’s legal counsel.  Mr. Draskovich explained how he contacted, Aaron, Ken, etc.  Mr. Draskovich then stated after speaking with Aaron, he was under the impression that he was first with his request in writing dated June 9, 2011.  Mr. Draskovich proceeded to read aloud the motion from the Board’s May 3, 2011 meeting.  Mr. Draskovich continued to review the District’s process from the May 3rd meeting and subsequent Board minutes dealing with the leasing of irrigation shares and the repealing of Ordinance 5.  Mr. Draskovich reiterated that he believes he was first-come-first-serve because he had put his request for shares in writing first.

Bo questioned Bob and asked when he actually requested water from the District and Bob stated that it was on June 9th.  Bob further stated that he had stated that in previous visits to the District that he wanted to bid on the water and wanted to know when the auctions would be held.  Mr. Draskovich stated that he was willing to modify his request for only six or seven shares in lieu of twelve.

Bo stated that something to keep in mind is that letters received by the golf courses on May 4, 2011 were in result of the passing of Ordinance 5 and the criteria to Ordinance 5 required much more information than the traditional leasing of irrigation shares.  Bo further stated that Bob was referring to the first-come-first-serve language; but that it did not state it had to be in writing and that the Board did not request further criteria at that time.  Bo continued to explain the difference in the criteria for Ordinance 5 and traditional leasing.

Mr. Draskovich questioned when the traditional long term leasing was approved and was informed June 7th.  His written request to lease 12 BIC shares is dated June 9th; before Bunker Farms submitted the actual Application For Lease of Irrigation Shares form dated June 14th. 

Mr. Robert Bunker explained why the water means so much to Bunker Farms and that he and Brian Haviland have attended all meetings regarding leasing irrigation shares and have never had anyone show up to an auction or bid against them for available BIC shares to lease.  Mr. Bunker stated that the point he is making is that they have been here and working at it to be the first in line for water.  Mr. Bunker further stated that they would use all the water available for farming.  Brian Haviland stated that as soon as he was informed that the official application was ready, he came down to the office and filled it out.

There was further discussion regarding the chronology of events and information contained in the packets which included a memo from the general manager; statements from Valerie Martinez and Mary Johnson; a blank application form for the leasing of irrigation shares; a written request from Robert Draskovich to lease 12 BIC shares dated June 9, 2011; an official application from Bunker Farm, Inc. to lease up to 100 BIC shares when available dated June 14, 2011; a memo from Mr. Draskovich detailing his actions since January 2011; and an official application from Robert Draskovich requesting to lease 12 BIC shares dated July 17, 2011.

Board and staff discussion continued regarding the number of BIC shares available and currently leased to whom, and a possibility of more shares available.  Aaron explained that the District currently utilizes ten BIC shares for the secondary system and possibly transferring water from Riverside to use at that location.  There was discussion that there could possibly be more BIC shares available; Bunker Farm’s request to lease up to 100 BIC shares as they become available; possibly splitting the difference and allowing Mr. Draskovich some shares to lease; and back to the intent of the first-come-first-serve basis, verbally and/or written; and the District’s policy to lease shares.

Bo Bingham stated that he would like to disclose a couple things.  One is that he personally knows Bob Draskovich and that Bob and his father were close friends and second, Bo has represented an entity of Robert Bunker’s father in the past.  Bo further stated that there were some things specifically that the Board needs to do.  Bo would like the Board to make a couple of findings based upon the information that has been provided.  When Bob Draskovich came in the first few times and asked about water, Bo thinks the Board should make a determination as to whether that was actually a request for water or whether that was just an inquiry about water generally.  This also goes back to a time before ever mentioning “first-come-first-serve” and if it was a request for water, Bo’s understanding is that it was made during a period of time in which the District would actually auction off water.  Bo further stated that when we get into the Ordinance 5 timeframe, May 3rd, May 4th, Bo actually thinks that what Mark has said is accurate and that this was a process of making this water available under a different set of circumstances other than the public auction.  Bo also stated that it did seem to him that the golf courses said something like, ‘if we are switching this from Ordinance 5, we have already asked for water under Ordinance 5, and is that going to carry over to the new program of long-term leasing?; and Bo also thought that this precipitated some of the statements regarding first-come-first serve.

Bo stated that the first finding he would like the Board to make is when was the first time that Mr. Draskovich requested the water, and also make a finding as to when was the first time that Brian Haviland and Robert Draskovich requested the water.  If the Board makes these findings, Bo believes the answer is simple.  This is first-come-first-serve and the Board did make this decision.  Bo stated that his strong recommendation is that the Board has to follow the District policy that is in place regarding first come first serve.  Bo stated that if the Board makes these findings, that his recommendation is to follow policy of first-come-first-serve.  As to the request having to be in writing, Bo doesn’t believe that there was anything said at the meeting that the request had to be in writing.

Bo also mentioned a couple more things that the Board should do going forward to hopefully deal with future issues that could arise from issues that have happened today.  Bo stated that the agenda item was written in such a way that the Board could officially approve and ratify the application document that has been created establishing priority in time, even though it hasn’t been requested for traditional leasing in the past.  Bo would like to see a policy and direction to staff that the document be stamped with date and time received as they come in; and that there is a clear record of who is requesting the water.  The other thing Bo would recommend is to avoid a situation of someone coming in and requesting an unreasonable amount of water; he would consider the Board requiring that a document be submitted explaining what they are going to do with the water, what it is going to be used for; and if the Board feels that the request is unreasonable, the Board could make such a finding.

Mark McEwen made a motion proposing that this Board find that on May 4, 2011, Brian Haviland requested that Bunker Farm lease all shares of water currently being leased and all other shares that may become available.  Mark further proposed that the board find that on June 9, 2011, Robert Draskovich requested to lease twelve (12) shares of Bunkerville irrigation water.  Finally, Mark proposed that this Board find based on District policy that Bunker Farms was the first entity to request all shares of available water.  Sandra Ramaker seconded the motion and it was unanimously carried.  4-0

Bo wanted it known that the basis for the Board’s decisions were not made upon the questions to Bob Draskovich regarding the selling and leasing of his water to SNWA, but were based on the District’s current policy of first-come-first-serve basis.

Bo questioned if his memory was correct that when Ordinance 5 was passed that there was a discussion, primarily from the golf courses, as to the Will Serve requests and that these requests would still hold priority in the transition back to traditional leasing.  Bo would like a finding on whether the first-come-first-serve basis was a continuation from Ordinance 5 discussions; and whether the Board was intending to carry through with the first-come-first-serve basis included in Ordinance 5 into the transition of the traditional lease of irrigation shares.  Wes Smith stated that there were conversations and discussions about the transition from Ordinance 5 back to the traditional leasing with a fixed dollar amount; and that there was significant discussion and effort on the part of the Board to make sure that the intent of Ordinance 5 would carry forward with the new leasing approach.

Sandra Ramaker made a motion that it was the intention of the Board to keep the same feel of the original Ordinance 5 intent of first-come-first-serve when the District transitioned to the long-term leasing of shares.  Mark McEwen seconded the motion and it was unanimously carried.  4-0

Mark McEwen made a motion that in the future, this Board direct our General Manager and any other employees to use the Virgin Valley Water District Application for Lease of Irrigation Shares, which is attachment #6 within the Board’s packets (attachment #5 within public packets) and that this must be completed by those who are requesting shares and that it be timed stamped and that would ultimately show who was first and who has first priority of those shares.  Ted Miller seconded the motion and it was unanimously carried.  4-0

Bo also wanted the Board to clarify that they have accepted a verbal request, because at the time, there was no formal application.  Mark stated that in his previous motion he had stated that Bunker Farms was the first entity to request all shares available by a verbal request.  Bo also mentioned that the application is only a request to lease shares and it is not a lease agreement.  Sandra mentioned that Bo had also stated that the application should provide information on the purpose for the water requested for lease.

Sandra Ramaker made a motion to make an addition to the Virgin Valley Water District Application for Lease of Irrigation Shares attachment #6 within the Board’s packets (attachment #5 within public packets) where it states “Number of Shares Requested” that the forms for leasing of shares should be accompanied with a letter of justification from the applicant that can be evaluated by staff and forwarded to the Board for approval.

Bo asked if any discretion was going to be given to staff to make the decision or whether the Board wanted to see all applications.  This was discussed and the Board would still like the applications to come before them for approval.

Mark McEwen seconded the motion and it was unanimously carried.  4-0

Brian Haviland asked if there would be new forms to fill out and it was determined that staff should contact the golf courses regarding this meeting and the findings and have them, Bunker Farms and Mr. Draskovich attach their letter of justification for the shares requested.

Mr. Draskovich again asked if the Board was accepting a verbal request for water when the parameters for leasing were unknown as far as how much they were leasing for, valve size, etc.  Bo stated that (based on the motions and approvals) the Board has accepted the verbal request from Bunker Farms.  There continued to be a discussion regarding the parameters of Ordinance 5 and long-term leasing.  Specifically, it was discussed that Ordinance 5 contemplated that the party requesting to lease shares had to provide specific information including meter size, etc.  However, it was also discussed that those specifics applied only to the leasing of shares in Mesquite Irrigation Company and not to the of leasing shares in Bunkerville Irrigation Company. 

Mark McEwen made a motion that the verbal request by Brian Haviland on May 4, 2011 satisfied the parameters for the water he was requesting which was Bunkerville Irrigation Shares.  The other parameters that were discussed in the process of trying to put together Ordinance 5 or any other procedure that specifically listed items such as valve size and things like that were specifically limited to Mesquite Irrigation Shares.  Sandra Ramaker seconded the motion and it was unanimously carried.  4-0

7. For Discussion & For Possible Action – Consideration to approve written Easement Agreement between the Virgin Valley Water District (VVWD) and NDKMT LLC, a Nevada limited liability company, for NDKMT LLC to grant VVWD an easement for VVWD’s ingress/egress and waterlines across, under, and through certain real property owned by NDKMT LLC.

Ken stated that the District has an easement agreement with Bunker Farms and after looking at easement further, it was discovered that this easement also crosses two other properties.

Kraig Hafen representing NDKMT LLC stated that he would like it known for the record and for the public to know that there was zero consideration (no money) given to NDKMT LLC by the VVWD for this easement.  Kraig also stated that the bids received by the District for the grading and road base application for the road leading to the secondary system were way too much for the purpose of that road and to not do it for NDKMT’s purposes.

Bo stated that he was not available when the agenda was put together and did not realize that NDKMT LLC was an entity of the Hafen family.  Bo disclosed that he has represented other entities or individuals of the Hafen family and this will also require a disclosure waiver as with the Bunker’s easement agreement from a previous agreement.

Mark McEwen made a motion to approve a written Easement Agreement between the Virgin Valley Water District and NDKMT LLC, a Nevada limited liability company, for NDKMT LLC to grant VVWD an easement for VVWD’s ingress/egress and waterlines across, under, and through certain real property owned by NDKMT LLC.  And in part of this motion, the Board also understands that our legal counsel has represented a different entity, but similar owners and that this was made very clear to the Board at the time the motion was made and that there was zero consideration to NDKMT LLC by the VVWD in exchange for their allowing the District to have an easement running across their property.  Sandra Ramaker seconded this motion and it was unanimously carried.  4-0

8. For Discussion & for Possible Action – Consideration to approve written Easement Agreement between the Virgin Valley Water District (VVWD) and Cedar Development Company, L.L.C., a Utah limited liability company, for Cedar Development Company, L.L.C., to grant VVWD an easement for VVWD’s ingress-egress and waterlines across, under, and through certain real property owned by Cedar Development Company, L.L.C.

Ken stated that this was almost like the previous agenda item in that there is zero compensation and that we are asking to put in a 16’ wide road base.  Ken also stated that there seems to be two monitoring wells located on this property and Ken would like to have access to these two monitoring wells through this agreement also, so this agreement is not completed yet.

Bo stated that Eric Wilbanks had drafted the agreement at the same time as the previous item and apologized for not being aware of what Ken just described regarding the addition of the monitoring wells.  Aaron stated that visually it looks like the monitoring wells are on this property in question, but he is still trying to get a legal description.

Mark McEwen made a motion to direct staff to continue the research for this easement to complete the easement agreement with that research once it’s done and then once the legal staff approves it, it comes back before the Board for approval.  Sandra Ramaker seconded the motion and it was unanimously carried.  4-0

9. For Discussion & For Possible Action – Consideration to award work based on bids presented for the grading and road base application for access to the secondary facilities in Bunkerville to the lowest responsible bidder in the best interest of the Virgin Valley Water District.

This project would be done on properties in question from the previous two items.  The Board would not want to make a motion on this item until all easements are in place.

Sandra Ramaker made a motion to bring back this item along with item #8.  Mark McEwen seconded the motion and the motion passed unanimously.  4-0

10. For Discussion – Summary of outside accounting services – recent and anticipated costs.

Ken had included a memo summarizing the outside accounting services.  Ken explained that John Gleave had to finalize the 2012 budget and that John was also involved in the defeasement of the 2008 Bond and the refinancing of the 2001 Bond.  The District has budgeted $15,000 for Draper, Gleave LLC accounting services for this fiscal year 2012, but Ken does not see that we will spend that much. 

There was further discussion regarding the budget and audit.  Wes Smith stated that he is trying to do everything he can without calling John Gleave, but if he calls him, he feels that is of prudent use of his time and the District’s resources.

11. For Discussion & For Possible Action – Consideration to accept revised Investment Policy Statement with BNY Mellon as rewritten.

Ken stated that he and Wes sat with John Jemison of BNY Mellon to review the District’s investment portfolio.  Ken stated that the existing investment Policy Statement (included) was inconsistent with the current economic conditions and a strategy of risk aversion and stability.  After meeting with John Jemison, he submitted the revised Investment Policy Statement.  John Jemison will be present at the September 6, 2011 Board meeting to explain and answer any questions the Board and staff may have.

12. Hydrologist’s Report

Aaron had not included a written report stating that he had been on vacation and otherwise had been working with Ken on these issues heard today.  Aaron also stated that he and Ken had attended a well rehab seminar today that was very informative.

13.  General Manager’s Report

Ken had included a written report and reviewed the significant events listed.  Ken further stated that he had met with the field staff on capital improvement projects for the next five years with long term plans and plans on bringing this information back to the Board for review and approval.  Ken stated that he had spoken with Chris with Bowen, Collins & Associates and their draft of the Basin 222 groundwater study would be available for review in a few days.  Ken also stated that the reconstruction of the reception area had been completed and thanked all who participated with the project with a special thanks to Ken’s wife, Voni, who painted the blue wall.

14. Public Comment

There was no public comment at this time.

15. Adjournment

President Karl Gustaveson adjourned the meeting at 7:10 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: 2011-08-02 (.pdf 54.K)