VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING
VIRGIN VALLEY WATER DISTRICT OFFICE
SEPTEMBER 6, 2011

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on September 6, 2011, at the Virgin Valley Water District Office at 5:00 p.m.  Attending were President Karl Gustaveson, Vice-President Mark McEwen and Board Member Ted Miller.  Board Member Sandra Ramaker participated via telephone and 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
• 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:

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

1. For Possible Action - Approval of Agenda

2. For Possible Action – Approval of  Minutes from 8/16/11 Regular Board Meeting

3. For Possible Action – Approval of Bills Paid - $301,074.49

** End of Consent Agenda**

4. For Presentation, Discussion & for Possible Action – John Jemison, District’s Financial Portfolio Manager with BNY Mellon, will make a presentation on the District’s investment policy and portfolio.  Following the presentation, the Board may review and discuss the District’s investment policy, make comments, ratify as is, or direct the General Manager and Mr. Jemison to make adjustments to the District’s portfolio and/or investment policy.

Mr. Jemison had Wes distribute a couple handouts that consisted of a review booklet that is reviewed four times a year with the General Manager and the finance director.  Mr. Jemison explained that this essentially breaks down the portfolio into what the current asset mix is.  He further stated that this was predominantly all fixed income, and due to the recent maturities, we have an influx of cash; and after this meeting, we will determine what to do with the cash.

Ken stated that each of the Board members were supplied with a revised investment policy that Mr. Jemison, Wes and Ken had revised for current economic conditions.  It has been 12 years since the District’s Investment Policy has been reviewed.

Mr. Jemison reviewed the returns and the cash the District has earned in the past one, three and five years.  He further explained the current economic conditions and how this has affected the District’s returns.  Mr. Jemison then reviewed the two page handouts and the difference in the yields of different bonds and how they determined how the District should invest.

The old and revised investment policy was discussed and reviewed so that Mr. Jemison was able to show the Board how the investment policies differed to show where he would like to see the District go with their portfolio and how the new policy will allow this.  Mr. Jemison further stated that the old and new policy were the same in that they both were consistent in safety, security and yield.  Mr. Jemison then reviewed the District’s portfolio holdings, maturity dates and examples of how the District could invest and the yields that may be expected.

After Mr. Jemison’s presentation, the Board continued with a brief discussion.

Sandra Ramaker made a motion to pass, approve and adopt the revised Investment Policy as submitted.  Ted Miller seconded this motion and it was unanimously carried.  4-0

5. For Discussion & for Possible Action – Consideration to accept and approve change order request of $14,200 from Forsgren Associates, Inc. regarding the secondary feasibility study.

Ken began by stating that included in the Board packets was a memorandum explaining some of the changes in the scope of work and that this was a difficult recommendation to make.  Ken stated that the biggest thing that happened was that the studies could not be effective on the secondary system unless it made a more effective assessment of what is the overall water situation in our basin and what is the community’s intention to do with that water.  Ken further stated that the District would receive two studies for the price of one and a half, and recommends that the Board approve this change order.

Ryan Wheeler representing Forsgren Associates, Inc. stated that he was here to answer any questions the Board may have concerning their letter requesting the change order and amount.  Ryan stated that he would touch on a few things that have led them away from the target to where they are at today.  Ryan stated that when this began, they were looking at doing a secondary water feasibility study on all the secondary water within the system; trying to determine the value of a secondary system to all the District’s customers; how it would reduce the potable water supply; and that they really had to do a potable water study at the same time while looking at a secondary water system.  Ryan also stated that another reason for the change order was that Ken had asked them to include the Lincoln County Land Act (LCLA), which would double the demand on secondary and potable water, infrastructure and costs.  This was brought back within the District’s current boundaries after realizing that there were still a lot of politics and unknowns associated with the LCLA at this time.  Another reason was the review of the Virgin River water quality to establish a water quality that can be beneficial to the end user; and that direction received from VVWD staff has changed a couple times and it was requested that certain information regarding the analysis of the Bunkerville secondary system be included with this report.

Ted questioned if $10,000 of this change order request was due to Forsgren attempting to obtain an ACOE grant for $90,000.  Ryan asked to clarify and stated that when they came back a month afterwards, that was for something different than this study.  The direction to try to obtain the grant money was given by the general manager and was for the idea of using solar power fields and installing hydro turbines so the District would have a green energy portfolio.  Ryan stated that this was done as a marketing effort and that any money spent was lost and they are not trying to obtain that money with this change order; but only for extra money and time for this contract for the Secondary Feasibility Study.  Ryan further stated that he did not believe they should be responsible for price difference since the scope of the project has been changed several times by the general manager.  Ryan further stated that due to the changes requested by the District, Forsgren is currently $8,642.22 over budget based on work that has been performed and the total change order of $14,200 would enable Forsgren to be compensated for these additional services and complete the report according to the District’s scope of work.

Comments and questions were given by Board members and Ryan gave examples of why he had to change because of requests by the general manager.  Aaron was asked for his opinion and he stated that he had come in after the scope of work had been changed and that he pushed for not including the LCLA stating this could be added in later if it were ever to happen that the District was to be the water provider in that area.  Aaron also added that with approving the change order, it would be a better product.

Ken added that the District did budget $20,000 for this fiscal year for Forsgren Associates, Inc. for possible additional studies and that this money could be used for the change order in question.  Ken further stated that he would like to make it clear for the record that the reason for including the LCLA was if the City might annex the LCLA and if the District was required or needed to help provide water to the LCLA properties; but after looking at the circumstances realistically, he thought it would be best to scale it back and deal with the LCLA separately if needed.  Ken further stated that the District has started good negotiations with representatives of Lincoln County and that they do have some water available for this area.

Ted Miller made a motion to accept and approve the change order request of $14,200 from Forsgren Associates, Inc. regarding the secondary feasibility study.  Sandra Ramaker seconded the motion and it was unanimously carried.  4-0

6. For Presentation, Discussion & for Possible Action – The General Manager and Hydrologist will make a presentation to show the water quality, location, appearance and access to Mica Notch Springs where the District has 201.26 afy of spring water rights.  The Board may approve $5,000 for an engineering letter report to make a preliminary assessment of pursuing this project.

Ken had prepared a power point presentation in regards to Mica Notch Spring where the District holds 201.26 afy of spring water rights.  Ken had taken a trip to the spring and had included pictures and information on the water rights, history, location and the water quality of the spring.  Ken also included the good news and bad news for attempting to use the spring water within the system.  Ken gave rough money estimates for the power generation value, to pump & treat energy savings, the water value and the access costs.  Ken’s recommendation is to commission a small study to better estimate the power generation values, pipe installation methods & costs, a return on investment calculations and bottled water potential; and to come back to the Board with a letter report and further recommendations.

Ken and Aaron answered questions from the Board and public.  There was discussion regarding budgeted funds, obtaining possible grants and whether the spring was included within the Gold Butte ACEC and what restrictions may be imposed. |

Ted stated that he felt that $5,000 would not buy much and thought that the District should speak to their consultant’s, Robcyn, LLC, regarding this BLM land before anything was decided.

The item died for a lack of a motion.

7. For Discussion & for Possible Action – Review of and consideration to possibly adopt the proposed budget preparation timeline.

Wes Smith stated that he had looked at what had been done in the past and tried to move the timeline ahead of schedule so that there would be more participation earlier; and this would give more time to respond to issues.  Wes also stated that he has designed in more structure involvement by the Board giving more opportunity to participate and work better together with staff.  Sandra mentioned that some of the dates mentioned were on the weekend and Wes explained that these dates were approximate unless required by NRS.

Ted Miller made a motion to adopt the proposed budget preparation timeline with the approximate dates as proposed.  Mark McEwen seconded the motion and it was unanimously carried.  4-0

8. Hydrologist’s Report

Aaron had included a written report and stated that he has been assisting Ken on items for this agenda, water rights, irrigation leases, preparing documents for Well 32 rehabilitation and reviewing and providing additional material for the Basin 222 Study being conducted by Bowen, Collins & Associates.  Aaron also stated that most of his time has been working on the Virgin River Habitat Conservation Recovery Program (VRHCRP) and Ordinance IV.

9. General Manager’s Report

Ken had included a written report with significant events that have occurred since his last report.  Ken also stated that the paving on Pioneer Boulevard would be completed by the end of this week and that the rest of the project was completed.  Ken has also been working with the contractor on the site 32 drain line and trying to minimize the potential for any change orders.  Ken further stated that progress has been made on the easement agreements for the Bunkerville secondary system.  Ken mentioned that there would be a work session for the VRHCRP at 9:00 a.m. on September 13th and another work session has been scheduled for September 29, 2011 at 9:00 a.m. regarding Basin 222 with Bowen, Collins & Associates.

10. Public Comment

Wade Poulsen, GM of Lincoln County Water District (LCWD) expressed his thanks along with his Board of Directors to Karl, Ken and Bo for meeting with them regarding the LCLA and felt that it was a very productive meeting and feels that both District’s are moving in the right direction; and appreciates the District’s willingness to come to the table.

11. Adjournment

 President Karl Gustaveson adjourned the meeting at 6:39 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: 2011-09-06 (.pdf 34.K)