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

Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on December 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 Members Ted Miller and Sandra Ramaker via telephone. 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.
• Board Comments - None
• President of Board Comments – Karl commented that he was glad to see so many in attendance.
• Public Comment – Scott Dowding questioned if there would be public comment on item #8, or if this would be the time.  Mark McEwen commented that a representative from Commissioner Collins offices had stated at the Bunkerville Town Board meeting that you must have public comment.  Bo stated that the Board meets NRS requirements with public comment.  NRS states that you must have public comment either at the beginning or the end; and the District actually posts it at the beginning and the end of regular agendas.  Bo also commented that the Board usually opens each item up for public comment.

CONSENT AGENDA:

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

1. For Possible Action - Approve Agenda

2. For Possible Action – Approve  Minutes from 11/1//11 Regular Board Meeting

3. For Possible Action – Approve Minutes from 11/15/11 Regular Board Meeting

4. For Possible Action – Approve Financial Statement for October 2011

5. For Possible Action – Approve Bills Paid since last public meeting- $490,736.62

** End of Consent Agenda**

6. For Discussion & for Possible Action – Discussion and consideration of an Alternative Investment Management arrangement with Wells Fargo Institutional Securities.  Possible action may include moving some, or all, of the District’s invested Securities from BNY Mellon to Wells Fargo Institutional Securities.

Wes Smith informed the Board that since the completion of the audit, he has had time to take a closer look at other aspects of accounting and finance for the District.  The rate of return historically experienced by the District has been a good one, with BNY Mellon’s help.  In the past, with coupon rates of 2.5% to 5.00% the management fee of 0.20% did not seem to be out of line, however, as coupon rates have come down, the management fee becomes a larger proportion of the interest revenue and we are currently paying approximately $7,700 per year in management fees to BNY Mellon.  After Wes conducted a more in depth investigation, he found that the District could have placed $500,000 in 5 year CDs through Wells Fargo and received a coupon rate of 1.90%.  The difference over the five years of the investment is $21,250 (including the cost of the management fee).  Wes also pointed out that when the District had a short term investment of $250,000 mature; BNY Mellon’s suggestion was to place these funds in another U.S. Government Agency instrument that would yield 1.20% for years, plus BNY Mellon’s Management Fee of 0.20%.  Wes contacted Wells Fargo and learned that the District could place the same $250,000 in an FDIC insured CD at 2.10% for five years and pay no management fee on the funds.  Wes also informed the Board that as the economy improves, agency yield could again exceed what is available in CD’s, however, if the District wanted to invest in Agencies or U.S. Treasury Notes, the District could get the exact same instruments with slightly better yields through Wells Fargo without paying the 0.20% management fee.  All investments placed with Wells Fargo would be handled using the Investment Policy adopted by the District and the level of security would not change.

Wes answered questions from the Board stating that he had spoken with several other investment houses, but that there would be no fees through Wells Fargo; the District’s invested funds would be staggered, so money would be available when required; and that the City of Mesquite is also planning on taking their investments from BNY Mellon to Wells Fargo.  Wes also mentioned that he was recommending that the District transfer all their investments from BNY Mellon to Wells Fargo Institutional Securities.

Mark McEwen made a motion to move all of the District’s invested Securities from BNY Mellon to Wells Fargo Institutional Securities.  Ted Miller seconded this motion and it was unanimously carried.  4-0

7. For Discussion & for Possible Action – Consideration and possible confirmation that the Board only need approve expenses over $2,500 for non-budgeted, non-emergency items, and those that require funds to be shifted from one District account to another.

The District’s operating rules state that the General Manager has authority to approve all expenses that have been budgeted.  Ken stated that Wes Smith had questioned why certain items were placed on the agenda for approval by the Board when the item was approved through the budget process.  Ken mentioned that there has been some history that made it rational for the Board to request closer oversight; however the District now has a regular staff accountant who has proven himself many times in the recent months to have the District’s interests as his priority.  Ken would like confirmation that if an item is budgeted, then the staff has approval to arrange and pay for that material or service.  As before, if a non-emergency expense over $2,500 is proposed, or one that requires a shifting of funds from one account to another, then Board approval should still be sought. Ken would also like to reserve the option to place budgeted items of special interest on the Board agenda if he believes that they warrant discussion and input from the Directors.

Wes mentioned that his intentions for the next budget process would have the Board members very involved and much more informed than in previous years.

Bo commented that he wanted to make sure the District was legally compliant with NRS 332 and 338 regarding purchasing.  Bo also thought the amount the general manager could approve should not go over $25,000; and that the resolution to change should also mention that it would supersede all other previous resolutions in regards to the general manager’s purchasing.

There was further discussion with Board members expressing their approval of changing the policy and discussion of what amount to approve.

Mark McEwen made a motion authorizing the General Manager to purchase only budgeted items over $2,500, but not to exceed $25,000, without prior Board approval; and that this resolution would supersede all prior resolutions and governing documents subject to the General Manager’s authorized spending amount.  Sandra Ramaker seconded the motion and it was unanimously carried.  4-0

8. For Discussion & for Possible Action – Discussion of the scope of the District’s responsibility for water lines and the District’s ownership of water meters and appurtenances.  Mesa Townhomes is an example of an HOA that has a 6” main line entering it with numerous smaller lines branching off of and dispersed throughout the HOA’s common areas.  Staff suggests confirmation of a current policy that the District will service only those water lines that are located within express easements and rights-of-way which have been duly recorded with the Clark County Recorder.  Staff also recommends wording changes to the District’s Standard Specifications and Operating Rules, Regulation & Rates to confirm that the District owns only the water meters and related appurtenances regardless of their locations.  Possible actions may include confirming the policy and approving potential wording change(s) to District’s rules, regulations, and specifications consistent with the decisions of the Board.

Ken’s memo to the Board explained that the District is only responsible for water system facilities installed on public property and in utility rights-of-way and easements.  The District’s policy has thus been for District responsibility to terminate at the end of the unobstructed public utility easement, the water meter, or backflow prevention device, whichever comes first.  Easements are usually under streets, but may also extend to the perimeters of a development, along special open corridors, or in the first several feet adjacent to the streets; and these are places where the District normally installs meters and/or backflow prevention devices.  Regardless of the location, the District does own and will service the flow meter, box, and setters.  When those devices are far from the curb, then the District’s specs section clarifies that the piping under areas such as sidewalks, driveways, structures or landscaping is not the District’s responsibility.  Ken explained the difference in a master metered project such as Rock Springs and private property with individual meters, not in an easement, as Mesa Townhomes and the District’s responsibility to these properties.  Mesa Townhomes has no utility easements under the private drive or through the common areas.  Ken then explained that Mesa Townhomes have 54 homes with beautifully landscaped common areas.  There is a 6” water main under the street with 2” and 1½” lines coming off of this main that course through the complex, under carports, streams, trees, and sidewalks.  From these small lines extend the ¾” laterals to each residence’s meter and service.  According to the design drawings, the utility easement for this complex is only a 10’-wide perimeter area - there are no utility easements under the private drive or through the common areas.  According to this definition in the District’s Design Standards and Specifications, the District would abdicate responsibility at the edge of Mesa Boulevard where the line goes through the utility easement.  The District should certainly not indicate ownership or responsibility for the other lines in this development, which are not designed to District standards, accessible with heavy equipment, or without obstructions.  In the interest of consistency with the other HOAs and service to the community, staff would be willing to cement a commitment to maintaining the 6” main that is under the private road in Mesa Townhomes.  To facilitate this, staff recommends that Mesa Townhomes grant and a public utility easement following the path of their private Mesa Springs Drive.

Ken further mentioned that the VVWD Specifications under Section III.I “Responsibility of District” it says that, “The Virgin Valley Water District will not be responsible for water mains, service laterals, water meters or other water system appurtenances located on private property, including operation, maintenance, repairs, replacements or other required water related activities.”  This is inconsistent with District policy, in that meters and other water system appurtenances are owned and serviced by the District.  Ken proposed updating Spec Section III.I to read instead, “Except when in approved utility easements, the VVWD will not be responsible for water mains or service laterals located on private property, including operation, maintenance, repairs, replacements or other required water related activities.  The District will maintain ownership and responsibility for meter boxes, setters, meters, and backflow devices whether on public property, easements, or private property.  Acceptable locations and access for these are outlined elsewhere in the specifications.”  Then insert a paragraph break and continue the text as it currently reads in the specifications.  Ken also proposed to change the VVWD Operating Rules, Regulations & Rates, Section VI-2.g. from “Responsibility of the District will end at the property line.” to “Distribution system responsibility of the District for each customer terminates at the end of the water utility easement, the flow meter, or the backflow prevention device, whichever is most upstream.”  Ken would encourage Mesa Townhome HOA to get a utility easement through the street for the 6” main and relocate their meters to the curb.  Ken also suggested that Mesa Townhome include sewer easement with the utility easement.

Mr. Dowding representing the Mesa Townhome HOA explained the problems they are having with leaks occurring within their system and not having the manpower, expertise or equipment to fix the leaks and requested assistance from the District.  Ken stated that he was going to look into the District employees doing other work or assisting in fixing leaks.  Bo stated that they have reviewed the enabling statutes and the only way the District could do this would be if the District was acting to preserve or conserve water, our natural resources.

There was further discussion regarding other properties and HOA’s and the District’s rules and regulations.  Gina Yenser questioned if Mesa Townhomes CCR’s should be changed.  Bo stated that they should check with their CCRs and see what they say about public utility easements.  Barbara Crocker asked if the District didn’t have insurance to take care of and was informed that this would not have been the District’s responsibility.

Bo stated that he would like to make a few things clear before the District would be able to assist Mesa Townhomes, or any other HOA or customer with these complications:  1. Easement must be recorded and the map identifying the location and nature of the easement must be signed off and approved by the District; 2. Installation must be constructed and installed per the District’s Specifications; and 3. It must be readily accessible and unobstructed.  Karl asked Bo if it might not be easier if legal counsel was given direction in the motion to prepare a written policy for utility easements and bring back at the next meeting for final approval.

Mark McEwen made a motion directing legal counsel to write a policy in regards to utility easements with the items that have been discussed and in Ken’s memo; and to bring back to the next meeting for final approval.  Ted Miller seconded this motion and it was unanimously carried.  4-0

9. For Discussion – In the workshop on November 3, 2011 regarding the District’s Secondary Feasibility Study, copies of the report were presented to all of the Board members.  Engineers from Forsgren will be available at this meeting to answer questions on the report and the Secondary Feasibility Study.

Attached to this item were changes to the Secondary Water Feasibility Study by Forsgren.  The revised cost data are still very rough estimates, but the cost relationships for the alternatives are likely to stay in place.  In Ken’s opinion, the research and calculations are conservative, safe, and reasonable for high-level planning such as the Board is engaged in now.  Ryan Wheeler with Forsgren was present to answer any questions before finalizing the report and signing off with engineer’s stamp.  Ryan also stated that after the presentation on November 3rd, questions were asked about the figures presented and they have since been amended.

10. For Discussion & for Possible Action – Presentation by Forsgren Associates, Inc. for a proposal to perform an engineering evaluation of the Bunkerville secondary water system at a cost of $18,000, which will include recommendations with system improvement costs and benefits.

Ken reminded the Board that in the November 3rd workshop on the Secondary System, they revealed that there are many problems with the Bunkerville secondary water system, and discussed the need for an engineering evaluation to best analyze, quantify, and make recommendations on how to address that system.  Because of the extensive work Forsgren made on the secondary water system feasibility, Ken thought Forsgren would be the District’s best alternative for performing this research.  Forsgren has responded to the District’s request for this work with the attached scope and work order agreement, which Ken has spent a good deal of time with Forsgren defining and refining.    Ken believes that this report will be of great value for the District and that their promised price of $18,000 is fair.  Forsgren will look at four different alternatives:  1. No change; 2. Enhance water quality through targeted blending and flushing techniques; 3. Minimize potable water use by using Bunkerville Irrigation Company (BIC) water; and 4. Use BIC water and relocate facilities to the VVWD 11-acre site. 

Bo suggested that the contract be put into District contract language for consistency.

Sandra Ramaker made a motion to forward with Forsgren Associates, Inc. for a proposal to perform an engineering evaluation of the Bunkerville secondary system at a cost of $18,000, which will include recommendations with system improvement costs and benefits; and that the contract be formalized by the District contract wording in lieu of the Forsgren contract included.  Mark McEwen seconded the motion and the motion carried by a vote of 3-1 with Ted Miller opposed.

11. Hydrologist’s Report

Aaron had included a written report.  He informed the board that he has been working on the VRHCRP/HMMP and that on the 8th he would be attending a hydrologic workgroup meeting in Las Vegas.  This will be the first meeting of this group in four years.

Aaron also informed the Board that he assisted the treatment and construction supervisors in coordinating the seasonal shut-off of Well No. 33 and the start-up of Well No. 32.  Well No. 32 pumping rate and water chemistry are better suited for the shorter pump times and extended intervals between pump cycles encountered during the winter months.  This transition will enhance seasonal operations at Treatment Plant 32.  Aaron also stated that the noise at Well No. 33 is progressing and it may need to be pulled as the District did at Well No. 31.

12.  General Manager’s Report

Ken had included a written report with significant events since his last report.  Ken also informed the board that most significantly included behind his report was the three page letter of interest to the Bureau of Reclamation (BOR) for an Integrated Basin Study worth a half-million dollars or more.  Ken stated that at the next board meeting on the 20th after Forsgren Associates, Inc. gives the board a presentation about what is a basin-wide water resource management plan; Ken will present to the Board more about how we are moving along on getting this coalition together and propose how we will provide technical support and get this moving along.

Ken also mentioned that the landscaping has begun for the District’s conservation garden.

13. Public Comment

There was no public comment at this time.

14. Adjournment

President Karl Gustaveson adjourned the meeting at 6:35 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: 2011-12-06 (.pdf 42.K)