VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
AUGUST 16, 2011

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on August 16, 2011, at the Virgin Valley Water District Office at 5:00 p.m.  Attending were President Karl Gustaveson, Vice-President Mark McEwen, Secretary-Treasurer Kenyon Leavitt, and Board Members Ted Miller and Sandra Ramaker.  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.
• Kenyon Leavitt offered a Prayer
• Ted Miller led the pledge.
• Public Comment – There was no public comment at this time.
• Board Comments - None
• President of Board Comments - None

CONSENT AGENDA:

Kenyon Leavitt made a motion to approve the agenda and consent agenda as listed below.  Sandra Ramaker seconded this motion and it was unanimously carried.  5-0

1. For Possible Action - Approval of Agenda

2. For Possible Action – Approval of  Minutes from 8/2/11 Regular Board Meeting

3. For Possible Action – Approval of Bills Paid - $268,886.29

4. For Possible Action – Approval of Purchase Orders Over $2,500
a. Morcon - $4,116.70 – Pressure Washer

** End of Consent Agenda**

5. For Discussion & for Possible Approval – Discuss and potentially approve revisions to the Applications for Lease of Irrigation Shares.

Bo began by stating that the footnotes came from the initial lease footnotes.  At the last meeting the board directed staff to put together an application, and specifically add to that application a requirement that those who desire to lease irrigation shares provide a description of how they intend to use those shares being requested.  The Board can then decide if the amount of shares being requested relates reasonably to the purpose that they have described.  Bo stated that the application was essentially the same as before with the exception of this requirement being added in; and because we are asking them to add that information of how they are going to use the water and how many shares, Bo took quite a bit of language from the lease itself and included it in this application.

Ted stated that the water shares in question were purchased by the District with public money and that the water the District is leasing out is public water and wondered if the District could ask applicants for a history of information about water shares that they may have sold or leased to other entities for a higher price and then want to lease the District’s shares at a lower price.  Bo stated that the Board could inquire about certain information, but cannot get into a situation where we are selectively choosing those who can or cannot use the water based on some basis that wouldn’t be proper.  There continued to be some discussion on this subject and the free market.

Kenyon questioned the terms of the application of paragraph 4 and if this meant that the District could change the lease at anytime.  Bo stated that you could change the terms of the standard lease that hasn’t been executed, but you cannot change a signed lease agreement.

The item was opened to the public with Scott Sullivan with Mesquite Gaming asking why the District wanted to know where he was using the water if he could not sublease it.  It was explained that the Board had a concern after the last meeting and that if an applicant only had one acre of land to water, but was requesting 100 shares; that this was an unreasonable request and someone could be trying to tie up the water without it being put to beneficial use.

Tillman Hafen stated that he thought you were able to sublease, but not at a profit.

Kenyon Leavitt made a motion to approve the latest revisions to the Applications for Lease of Irrigation Shares dated August 16, 2011.  Sandra Ramaker seconded this motion and it was carried by a vote of 3-2 with Mark McEwen and Ted Miller opposed.

Bo then stated he had a question regarding subleasing and if you would look at the Lease Agreement, it states on page 4, paragraph 6, that there is no subleasing, and Bo continued to read this paragraph.  President Gustaveson suggested going into item #6 since the discussion had to deal with the Lease Agreement more so than the Lease Application.

6. For Discussion & for Possible Approval – Discuss and potentially approve revisions to the Lease Agreement for Irrigation Shares.

The minutes and motion from the meeting on June 7, 2011 were read aloud pertaining to subleasing and Bo explained how it had changed to what it reads today from the previous leasing of shares.

Aaron Bunker stated that the front page, superscript #3 of the Lease Agreement should be changed to similar language as superscript #2 on the Lease Application.

It was also discussed that the word “deemed” should be substituted with the word “estimated” with respect to superscript #2 on the application.

Kenyon Leavitt made a motion to accept the revisions to the Lease Agreement with the change of footnote #3 to mirror footnote #2 on the Lease Application and also changing the word “deemed” to “estimated” on footnote #2 of the application.  Sandra Ramaker seconded the motion and it was carried by a vote of 4-1 with Mark McEwen opposed.

7. For Discussion & for Possible Approval – Review and discuss the potential acceptance of a long-term lease agreement with Mesquite Gaming for 80 Shares of Mesquite Irrigation Company (MIC) water.

Copies of the Lease Applications that were completed and submitted in reference to this item along with items #8, 9 & 10 were distributed.  Representatives of the four applications received were present and it was determined that the word “deemed” could be marked out and replaced with the word “estimated”, as approved in the previous item, and the representatives could initial and approve the change to their application without having to redo the entire applications.

Ken stated that staff recommends approval of all four applications.  It was also discussed whether each item must be done separately or if they could be combined and Bo stated that all four items could be approved with one motion.  There continued to be a discussion regarding the number of shares available for leasing and the number of shares requested on the applications.  Mark stated that he had questions regarding the BIC shares and would like item #9 separated from the MIC shares applications for approval.

Aaron also stated that he would like to be open and make sure everyone was aware that Bunker Farms is owned by relatives of Aaron, and that all the information provided to Bunker Farms was also provided to all other applicants.

8. For Discussion & for Possible Approval – Review and discuss the potential acceptance for a long-term lease agreement with Pulte for 4 Shares of Mesquite Irrigation Company (MIC) water.

10. For Discussion & for Possible Approval – Review and discuss the potential acceptance of a long-term lease agreement with Tilman Hafen for 17 Mesquite Irrigation Shares

Kenyon Leavitt made a motion to approve the lease applications for items #7, 8 and 10 respectively.  Ted Miller seconded this motion and it was unanimously carried.  5-0

9. For Discussion & for Possible Approval – Review and discuss the potential acceptance of a long-term lease agreement with Bunker Farms for 37 shares of Bunkerville Irrigation Company (BIC) water.

Mark questioned Bunker Farms application in that they are requesting to lease 100 shares “or all available” and the agenda item is for 37 shares.  Aaron explained that Bunker Farms currently leases 37 shares with 2 of the shares under a current lease agreement that will terminate on the 18th of this month; and wanting to lease all 37 shares under the new long-term lease agreement locking in at $250/share for 8 years with first right of refusal.  They would also like to lease up to 100 shares when and if they become available; and if even more than 100 shares became available,
they would also like to be the first come first served; so this is the reasoning behind asking for “all available”. 

There continued to be discussion regarding the total number of shares available in BIC (59 shares).  Aaron went on to explain that on September 9, 2013, Bunk Farms lease of 4 BIC shares would be available and that on September 30, 2014, SNWA lease of 8 BIC shares and one MIC share would become available.  Aaron further stated that 10 BIC shares are currently reserved for the Bunkerville secondary system. 

There continued to be discussion regarding “first come first served”; number of shares available, and when they become available; and the possibility of more shares becoming available from Riverside shares if the point of diversion could be changed.  Bo again explained the policy to the Board that they have adopted in regards to first come first served basis and what this means.  Bo also stated that he would prefer to see, or feel more comfortable, with a number in lieu of just stating “all available”.  Kenyon also stated that he too would like to see a reasonable number in lieu of “all available”.

Discussion ensued in regards to the Board reviewing the lease amount and when that amount would affect current leases or future shares that become available.  Ken stated that the secondary feasibility study may also enlighten the potential value of river water in the future for the District.
Mark started to make a motion to revise the application from Bunker Farms.  Kenyon stopped Mark and stated that Bunker Farms has submitted an application and he thinks the Board should ask them, if they are willing to accept the application as submitted.  Mark also mentioned that if they don’t accept the application because they are requesting more than available, the Board just approved Tilman Hafen’s application requesting an additional 45 MIC shares, if and when available.

Bo explained that at the last meeting the Board made policy to have the applicants supply the information to support the number of shares requested and to show that it is a reasonable request.   Bo stated that he strongly recommended against doing anything that would be inconsistent with that policy now.   Bo further stated that there is an application requesting shares that has been submitted and the Board needs to approve or disapprove the application on those factors established in the prior meeting.  Again, Bo stated that he was uncomfortable with “all available” on the application in lieu of a number certain, but if you look at their request and determine that it is reasonable in light of what they state their use would be, and then approving the request would be consistent with the policy the Board has adopted.

Brian Haviland representing Bunker Farms stated that he would only make the application up to 100 shares when available and will lock in the rate fee for what is currently available, which would be 37 BIC shares.

Aaron explained that the application was a request and not a binding document.  When they enter into the Lease Agreement, the exact number of shares available is what is entered into with the agreement.  If any other shares would become available, they would enter into another Lease Agreement with those shares at the current lease rate; but they would have first priority because they entered more shares than available on the Lease Application.

Kent Harper with the Mesquite Local News commented that he did not believe the Board was following the Open Meeting Law because the agenda item is requesting a long-term lease of 37 shares and the Board’s discussion is all over the place.  Bo stated that in his opinion, all items discussed have been directly related to the application that Brian submitted and believes the discussion has been healthy and well warranted. 

Kenyon stated that he thought if Brian was willing to take off the “all available” and initial the application change that this could be passed with Bunker Farms entering into a Lease Agreement for 37 BIC shares and if and when any other BIC shares become available, Bunker Farms would be first come first serve up to 100 shares.  Brian Haviland representing Bunker Farms changed the application to 100 shares only and crossed off “all available” and initialed the document that he approved the changes before a motion was made.

Mark McEwen stated that having received revised application from Bunker Farms requesting 100 shares to be leased and having a representative from Bunker Farms, Brian Haviland, initial the fact that he wants 100 shares and has stricken out “all available”, I’ll make a motion that we approve a lease application from Bunker Farms in the amount of 100 shares (BIC).  Kenyon Leavitt seconded the motion.

There continued to be discussion on the number of shares available and the number of shares that would be stated on the lease agreement.

Mark McEwen amended his motion to include approval of a long-term lease agreement with Bunker Farms for 37 shares of BIC water.  Kenyon Leavitt seconded the amended motion and it was unanimously carried.  5-0

11. For Discussion & Possible Action – Review and discuss the potential acceptance of the apparent low bid for repair of damage caused by a burst 16” pipe under Pioneer Boulevard.  The bids for this project will become available and made public at this Board Meeting.

Ken stated that seven contractors were contacted to bid on this project and three responded. All three of the contractors were present for a walk through with District and City staff and agreed to conditions which they mentioned in their bids.  Trade West Construction was the low bidder at $59,860.  Ken further stated that staff’s recommendation is that the bid be awarded to Trade West Construction for $59,860, with a notice to proceed dated tomorrow (8/17/11) and to be completed by the 31st of August, 2011.

There was a question as to where the money came from to repair this break and the amount budgeted and spent to date.  Wes Smith responded that it would come from Line Maintenance/6375-00, budgeted $185,000, but he wasn’t quite sure what had been spent to date.

Kenyon Leavitt made a motion to award the contract to Trade West Construction with a Notice to Proceed tomorrow (8/17/11) for the bid amount of $59,860 and to be completed by 8/31/11.  Ted Miller seconded the motion and it was unanimously carried.  5-0

12. For Presentation, for Discussion & for Possible Action – Proposed revisions to the VVWD job titles, without any changes to compensation.  All staff would retain their current pay.

Ken stated that the existing job descriptions and pay scales were included in the packets.  Ken stated that he was inspired to change after reviewing the Hydrologist position.  Ken further stated that there would be no change in positions of any employees, but that this would provide better descriptions; more standard scaling; and the ability to tie certification levels with job level.  The previous management had the descriptions as entering at a level III and increasing to a level II then I, when entry level should begin at I and increase to II and III.

Mark McEwen made a motion to approve the proposed revisions to the VVWD job titles with the understanding that there are currently, right now, with this revision, no changes in compensation.  Ted Miller seconded the motion and it was unanimously carried.  5-0

13. 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 the packets included the proposed easement agreement and asked the Board to review Exhibit B and the brightest pink line showing the easement on Cedar Development Company (CDC) property.  Ken further stated that there is currently an easement in place, but that it does not include improvements or the two monitoring wells located on CDC property.  Ken also mentioned that the Easement Agreement has been forwarded to CDC, but a signed copy has not been returned.  Ken feels that it can be approved as to form at this meeting and when a signed copy is returned from CDC, Ken would be able to sign and execute the agreement.

Bo stated that he did not see any problem with the Board approving the agreement and signing after returned from CDC and that he doesn’t anticipate any problems with getting the easement signed by CDC.

Mark McEwen made a motion to approve the document included in the packets entitled Easement Agreement between the VVWD and Cedar Development Company L.L.C. (CDC) and that this pending agreement grant VVWD an easement for VVWD’s ingress-egress and waterlines across, under, and through certain real property owned by CDC.  Ted Miller seconded the motion and it was unanimously carried.  5-0

14. For Discussion & for Possible Action – Consideration to award work based on bids presented for 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.

Mark questioned if this project was included within the easement agreements, which it is.  Kenyon mentioned that we do not have a signed easement agreement with any of the three parties involved and stated that we could not issue a notice to proceed without these signed documents.  Kenyon also brought up the fact that only $3,000 was budgeted for secondary system maintenance and this price would put the District over budget $9,544 in only the second month of fiscal year 2012.  Kenyon also stated that he has used this road for a lot of years and believes that grading the road would be sufficient for the District’s use at least until more money could be budgeted for this project.

There was further discussion regarding the condition of the road, budget, and costs.  Brian Haviland commented that Bunker Farms has been maintaining that road up until 2 years ago when they did not need to use it any longer.  Brian also stated that they (Bunker Farms) have offered to distribute gravel along the road if it was provided by the District.

Ken stated that the standard for access for a public utility versus a farmer was different and that a public utility would need to be able to access the road at all times.  Ken also stated that it was included in the easement agreements that the District would maintain a 16’ wide road.  There was further discussion regarding other users of the road, safety issues, and responsibility.  Bo read from the agreement and what the District’s responsibilities are.  There continued to be a discussion regarding the size of the road and the budget.

Mark McEwen made a motion to not approve the work and the bids presented for the grading and road base application on this right-of-way and also in this motion direction to staff to bring back with a different design taking into consideration the amount of money budgeted.  Kenyon Leavitt seconded the motion and it passed by a vote of 3-2 with Karl Gustaveson and Sandra Ramaker opposed.

Bo brought up the previous items regarding the easements and stated that he would rather not have the language on the size of the road included in the agreements.  Bo stated that if everything else was okay with the easement agreements, the Board could go back and modify that motion or bring the easement agreements back once the documents have been changed and also make contact with Cedar Development.  After further discussion, and since no easement agreements have been signed and executed, it was decided that the easement agreements would be revised and brought back with the corrected wording at the next meeting for approval.

15. For Discussion & for Possible Action – Review and discuss potentially establishing Ordinance IV connection fees to implement the Virgin River Conservation and Recovery Plan (VRHCRP) at $275.00 per equivalent dwelling unit (EDU).

Ken explained that the District currently has an agreement to assist with this habitat recovery plan.  The amount of work is tied to the amount of impact or to the number of connections there are.  However, the scope of work is not very well defined and the number of connections will determine the amount of recovery we will need to make; so we are trying to determine the amount of money that will do some good, between the amounts of money that would be limiting development.  The habitat recovery plan has proposed the $275 and Ken had included a table with the different amounts to be paid for each different size meter installed.

Aaron explained that when the Mesquite Land Act was passed, this was part of that document which required to have the habitat conservation plan and to also have a hydrological monitoring mitigation plan.  In order for the District to have an incidental take permit, the District must collect these fees.  Aaron further stated that Fish & Wildlife have been operating in good faith with the City and the VVWD in that they have allowed growth without actually having a signed agreement.  Fish & Wildlife in turn would like to see the District showing good faith by signing the agreement and collecting these fees.

There continued to be discussion on how the District is basing their fee on meter size while the City’s fee is based on disturbed acreage; reasoning for participation; the participants; and whether collecting this fee is double dipping with developers having to pay the City and the VVWD.

Discussion ensued regarding the scope of the plan, level/even participation by all participants, what is a fair amount for the District to collect, who decides on what amount is to be paid, and what would the bottom dollar be for the District.  Bo mentioned that the District is under contract with Robcyn, LLC. whose specialty is federal issues, and that maybe they would be willing to come out to the next meeting to explain the agreement and how fees are determined and, what is the bottom line for the District to collect, etc.  The Board all believed this was a very good idea.

The item died for a lack of a motion.

16. Hydrologist’s Report

Aaron’s written report included information of his daily activities and his attendance, along with Ken, to a well rehabilitation seminar in St. George that was very informative.  Aaron also mentioned that besides working on the items on this night’s agenda, he would be filing on fifteen water rights this month; one for proof of beneficial use, and extension of time on the remaining water rights.

17.  General Manager’s Report

Ken informed the Board that he and Aaron had met with Ryan Wheeler of Forsgren regarding the secondary feasibility study and since the scope of work has been somewhat changed, Ken has asked them to write a letter itemizing the report.  Ken also stated that he met with staff regarding the secondary system water quality and stated that there would be more studies and reports coming to the Board with information for what to with this system.

Ken stated what seminars and meetings he has attended and included a memorandum and graphs showing the recent water and wastewater flows for the District.

Ken also stated that he had staff put on a pressure recorder for the area of Pioneer Boulevard where the latest leak happened, and that we have seen no pressure spikes.  Ken will leave the pressure recorder for a while longer to monitor.

18. Public Comment

Kent Harper asked if the back-up material would be put on-line, and he was informed that it would not be; but a paper back-up was given to him.

19. Adjournment

President Karl Gustaveson adjourned the meeting at 7:46 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: 2011-08-16 (.pdf 47.K)