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

Minutes of the Annual Board Meeting of the Virgin Valley Water District Board held on October 4, 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 – David Ballweg of Mesquite stated that he would like to be recognized when the Board discusses item no. 5 regarding Ordinance IV and the VRHCRP

• Board Comments – Sandra Ramaker read a letter given to her from Ron Walters who stated that he had contacted the District via website about one year ago regarding receiving a monthly statement on-line in lieu of the U.S. Mail Service as other vendors whom he receives bills from to help save paper; and he also stated that he has never received a response back from the District on that request.  Mr. Walters also commented about the over watering from homeowners and HOA’s and stated in his letter that in his opinion to save water in Mesquite that the landscapers should be contacted and told how to manage sprinklers to save water.
Staff was directed to bring this letter back for discussion at the next board meeting.

• President of Board Comments - None

CONSENT AGENDA:

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

1. For Possible Action - Approve Agenda

2. For Possible Action  – Approve Minutes from 9/20/11 Regular Board Meeting

** End of Consent Agenda**

3. For Discussion & for Possible Action – Presentation of Annual Audit for Fiscal Year Ending June 30, 2011 by Wisan, Smith, Racker & Prescott

MacRay Curtis (Mac) distributed the final version of the District’s Financial Statements while Val Overson made introductions, including Bryce Wisan from the Las Vegas office, and information about their firm.  Val stated that the process to produce this document is more important than the product.  Val continued to thank the Board for the opportunity to work with the District and congratulated the District on their actions to shift the District’s direction from rapid expansion to economy and stability.  The full impact of these changes will be seen in the next fiscal year, although 2011 already shows a significant shift in the balance of revenues and expenditures. 

Mac presented the report and stated that he was very impressed with inventory and how it is handled.  Mac stated that after working with the District and realizing what issues that have been dealt with in the past; they were very impressed with how those issues have been handled and the improvements made by the current leadership.  The District has done a good job of handling controls and getting back on an even track.  The firm has given the District a clean opinion on the financial statements.  Mac continued to the Management’s Discussion and Analysis within the report explaining the financial highlights and the actions taken to make changes and the conditions that led to having to make these changes.  The report included the District’s financial analysis as a whole, but was not gone into detail by Mac.  Mac reviewed the Statement of Net Assets and the difference between the FY2010 audit and the current FY2011 audit.  Mac reported that their firm did not identify any deficiencies in internal control over financial reporting that they would consider to be material weaknesses.  The firm did do a single audit because Federal funds were involved from reimbursement from the ACOE with the arsenic project.  The report at the financial statement level for the single audit found nothing in internal controls that gave them any heartache and they found no problems at that level.  Mac then reviewed the single audit report and stated that they had a couple notes on internal controls.  Mac stated that when he brought these notes up with Ken, Ken responded immediately and Mac was impressed with Ken’s response that was included for review.  The District was aware of the Nevada law of paying prevailing wages for amounts over $100,000; but the District was not aware that when receiving federal funds, they must pay Davis-Bacon wages for anything over $2,000.  The summary of the single audit results were reviewed.  Mac also noted that the District was not aware that before contractors are awarded any project that they would receive federal funds; the District must make sure that the contractor has not been debarred or suspended by the federal government.  There is a website to retain this information.  Mac stated that no contractors that the District awarded bids to were found to be suspended or debarred from the federal government.

Kenyon Leavitt made a motion to accept the audit as presented by Wisan, Smith, Racker & Prescott for fiscal year ending June 30, 2011.  Sandra Ramaker seconded this motion and it was unanimously carried.  5-0

4. For Discussion & for Possible Action – Consideration to approve $7,715.00 for funding the Demonstration Garden at the District offices

Pete had included a letter with bids and a landscaping plan.  Kokopelli Landscaping is the low bidder with a bid of $7,715.00.

Mark McEwen disclosed that Kokopelli Landscaping is partly owned by his brother-in-law and he will be abstaining from this item.

Ken stated that he has spoken with Kokopelli and their bid includes replacing the irrigation system and removing some old plants.  Kokopelli also wants this to be a show piece since their name will be attached to it.  Ken further stated that his wife has some influence with Kokopelli and that they are willing to modify the scope of work somewhat and that he has also spoken to Odyssey Landscaping and that they are willing to modify their current contract to keep it looking nice.

All plants will have the common and scientific names posted.

Sandra Ramaker made a motion to approve $7,715 to Kokopelli Landscaping for the Demonstration Garden at the District offices.  Ted Miller seconded this motion and it was passed by a vote of 4-0 with Mark McEwen abstaining.

5. For Discussion & for Possible Action – Discussion of the Virgin River Habitat Conservation & Recovery Program (VRHCRP) and the District’s role and financial participation.  Possible action may include adoption of Ordinance IV.  Possible action may also include determining the amount of the fee to be imposed by the District through Ordinance IV and other conditions in order to address the District’s financial participation in the VRHCRP.

Karl Gustaveson gave some background information and based on the recent workshop, the District was currently considering an Ordinance IV fee of $200 per EDU (equivalent dwelling unit) and that the Fish & Wildlife (F&W) have also tentatively agreed to this amount.

Sandra Ramaker read a statement that she had prepared stating that she believes that the District must support the VRHCRP and that the District must move forward and adopt Ordinance IV as soon as possible along with the reasoning for her opinion.

Ted Miller stated that he was against this Ordinance and gave the reasoning for his opinion, saying that it was a burdensome tax.

Kenyon Leavitt stated that since the last meeting he has talked to a few people and had some questions.  Kenyon made a statement regarding the first time F&W came to a District meeting and told the District that if they did not collect this fee the District would not get another permit; Clark County was supposed to be involved with this plan and they are not; developers in Mesquite must pay the City and the VVWD for the same fee and this is “double dipping”; and F&W cannot come up with a specific fee amount that the District should collect, how they are going to spend the money, or when the plan will be approved.

Karl explained that this all began with the BLM land take down and explained why the City and the VVWD require a take permit to build and take more water from the ground respectively.  Discussion continued as to why the District has not yet finalized its portion of the plan; the program not being approved as of yet by any entity as a final agreement does not yet exist; who will actually spend the money; and where is the plan currently.  Karl stated that the City and the VVWD must submit a plan, which hasn’t been completed.  Once plans are submitted from the different organizations and all approved with the F&W, the VRHCRP will be approved.  The plan will state how the City and the VVWD plan to spend the money collected through their ordinances and that will be approved through the executive committee that Ken will sit on.  Karl also stated that the District will be reimbursed for monitoring wells and possibly other projects included in the plan.

After a heated discussion regarding the F&W, the item was opened to the public.  Comments were received from David Ballweg and Barb Ellstead regarding the impact of this fee and developers in the community.
Mark questioned a couple of Ken’s statements and Ken stated that he has read reports where businesses have been sued because they did not comply with federal regulations.   Mark asked for legal counsel’s opinion on where the District stood regarding those type of suits.

Bo began by stating that when Bingham & Snow became involved in this, the District was already heading down this road to pass the VRHCRP.  Bo further stated that if it is this Board’s intention to potentially avoid this fee or tax, he doesn’t think that it would be appropriate to just not collect it.  Bo stated that he thinks there would be something that the District would need to attempt to do affirmatively to address the issue properly and that he does believe this stems from Section 10 of the Endangered Species Act and that pursuant to that Federal Law that has been approved, it was legal for BLM to put some conditions on the acquisition of this property.  From a legal perspective, Bo would like the District to be very careful not to violate that law.  If the Board were to decide to attempt to not charge this fee, the Board should approach it in a way that doesn’t lead to more liability.  Bo stated their firm could do research; see how best to approach it; and see if there is a way to legally avoid the fee, but he would be opposed to anything that would violate an agreement that already exists.  Bo further stated that if the Board decided to go forward and charge this fee, legal could seek to tailor the agreement to address some of the Board’s concerns.

Further discussion continued regarding the amount to collect and how to determine that amount; the government and how it operates; the Habit Monitoring & Mitigation Plan (HMMP); the F&W estimates of the money the District will collect and a reasonable amount that may be collected.

Wade Paulson, Lincoln County Water District (LCWD) General Manager, stated that Lincoln County’s HCP (habit conservation plan) began ten years ago and has just been completed this past year.  Wade stated that he and Lincoln County agree 100% with statements and concerns of the VVWD Board, but that you must have a plan in place that you develop yourselves.  Wade stated that they do have stakeholders including the City of Caliente and the Union Pacific Railroad. The LCWD does not collect fees for this plan, only Lincoln County through the HCP GID (General Improvement District), which current property owners are taxed within the HCP.

A lengthy discussion ensued regarding the committees and members of each committee that would oversee how the funds would be spent; the difference in Ordinance IV and the VRHCRP; concerns of what you are paying for; what impacts the F&W may say that the District is having on the endangered species in the river and then potentially even attempting to take away water from the District that the State Engineer has allocated to the VVWD; and a reasonable plan and reasonable costs.  Bo stated that the District may be able to put provisions into the contract to address some of these concerns.

Discussion continued on the amount to charge; how the tentative amount came to be; why that amount is being considered to be charged; and what is the District’s impact on the habitat.  Wade Paulson stated that if you write your plan then you can justify the amount you charge.  Bo stated that he has been making notes for contract provisions that may be negotiable and discussion continued on how to proceed.  Bo further stated that this has been dragging and the District should act quickly and professionally, and get it right.

Further discussion continued regarding the impact the District has on the river from water drawn from the aquifer; the endangered species; and where these impacts are reported or where data can be found regarding these impacts.  Bo stated a workshop may be in order, but the District needed to obtain all the information and data available so the Board could go into the workshop prepared.  It was discussed and determined that any questions the Board may have that they would like to have addressed so that they can best determine an appropriate fee should be directed to Aaron Bunker; but that Aaron should simply collect the questions and concerns in order to put together a master list of issues and concerns to seek to gather information and which can be addressed in the workshop.  Aaron was directed not to return comments to a Board member or discuss any Board member comment with any other Board member so as to be fully in compliance with the Open Meeting Law.
 
Mark McEwen made a motion to table this item along with item #6 until the first meeting in November, 11/1/11.  Ted Miller seconded this motion and it was passed by a vote of 3-2 with Karl Gustaveson and Sandra Ramaker opposed.

6. For Discussion & for Possible Action – Consideration of revisions to Section IV-7 of the District’s Operating Rules, Regulations & Rates (Operating Rules).  Possible action may include amendment or revision of Section IV-7 of the Operating Rules to make such rule consistent with Ordinance IV

See motion made under item #5.  This item was not discussed based on the board’s action taken on item #5.

7. For Discussion & for Possible Action – Consideration of proposed amended settlement agreement with the U.S. Bureau of Land Management (BLM) to resolve trespass issues associated with the White Rock well site (Well #30). Possible action may include authorizing the General Manager to execute the proposed amended settlement agreement with the BLM.

Bo began by stating that this item concerns the trespass issues raised by the BLM relating to the extension of the fence location as well as the communications tower.  But this particular settlement only addresses the claimed trespass relating to the fence.  The BLM Right-of-Way (ROW) that the District had on this property covers two things and the BLM claims the District exceeded their ROW by constructing a tower and by extending the boundaries with the placement of the fence.  The District set out to settle this issue over a year and a half ago by paying over a $24,000 settlement, but this settlement was not able to be fully consummated because of the Rebel Communications law suit.  Bo further stated that the BLM has been patient because of the help from Robcyn and have not pushed this issue for quite a while; however, they do want to resolve this trespass as it relates to the extension of the fence.  This means the BLM will be okay with the ROW encompassing the land where the fence is located.  As part of the settlement agreement, the BLM is accepting the settlement of $24,000 that the District has already paid and will require no additional funds to resolve the fence related trespass.  Also, the scope of the outstanding issues related to fence.

Ken stated that he spoke with Katrina Williams with BLM and she stated that some modifications to the letter were required and advised Ken to adjust the letter to only address the trespass issue with the fence. 

Ted Miller made a motion authorizing the General Manager to execute the proposed amended settlement agreement with the BLM.  Kenyon Leavitt seconded this motion and it was unanimously carried.  5-0

8. Hydrologist’s Report

Aaron included a written report and stated that he has been gearing up for the precipitation gauge site visit.  Aaron has also been spending a great deal of time working on the HMMP documents.  Aaron also mentioned that he was working with a company to get a quote on outfitting the sites for continuous monitoring.

9. General Manager’s Report

Ken had included a written report and added a picture of the area coming off of site #32 where the discharge line has been installed.  Ken mentioned that there would be a workshop on Thursday on the Bunkerville diversion dam.  There was supervisor training presented by Bill Zelinski with the Pool Pact that was informative.

Aaron and Ken had hiked to Mica Notch Spring but it was not flowing well and the water did not taste good; will try going again in the spring.
Ken also stated that Pete and Wesley were very helpful at site #31 in looking at re-circulating the water from the treatment plant so that it can be reused and not all go to waste; approximately 1.5 af/yr.

10. Public Comment

There was no public comment at this time.

11. 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: 2011-10-04 (.pdf 39.K)