Water District and Golf Courses Debate Future Water Needs
Editorial from the Virgin Valley Water District
As residents of the Virgin Valley know, we live in a desert where water is a scarce and important resource. Ensuring that the limited water available is put to the best possible use has long been a complex and challenging task for the Virgin Valley Water District.
That’s why current negotiations with two golf courses regarding the District’s irrigation water is a critical issue for all ratepayers.
The District holds 403 shares of Virgin River water in the Mesquite Irrigation Company (MIC) and 59 shares in the Bunkerville Irrigation Company (BIC). Currently the District does not have the ability to treat Virgin River water to make it drinkable so it leases it to other users until such time as it’s needed for potable water. The lease revenue is added to the District’s general fund and offsets the necessity for rate increases to residents and businesses.
Most of the local golf courses either own their own irrigation shares or have made other arrangements to address their water needs and do not rely on District irrigation shares.
In 2011, the District agreed to lease a portion of its irrigation shares for $250 per share to local golf courses and farmers. These leases extend into 2019 when the District will have the right to set new rates at whatever price the District determines.
In 2014, Southern Nevada Water Authority (SNWA) agreed to lease 18 shares the District owns in MIC valued at $1,246 per share and 22 shares the District owns in BIC valued at $1,512 per share. Together, SNWA pays the District $55,692 a year for the leases. SNWA has indicated a willingness to lease more shares from the District at these prices.
A lease between the District and Wolf Creek golf course for 155 shares, at $250 a share, is valued at $38,750 per year. A lease between the District and Conestoga golf course for 150 shares, at $250 a share, is valued at $37,500 per year.
However, metering history shows that Wolf Creek only uses 110 of its 155 shares and Conestoga has verbally acknowledged that it only uses 85 of its 150 shares. Unfortunately, the result is extra costs to the golf courses and lost revenue to the water district because the unused water flows down the river without any financial compensation.
Should the two golf courses agree to return their unused shares, a combined 110 shares, prior to the lease expiration date, the District could then lease those shares to SNWA and realize extra revenues of $137,060 per year. Wolf Creek golf course could save $11,250 per year and Conestoga could save $16,250 per year in lease costs through 2019.
It’s important to note that the District’s irrigation shares do not represent the only irrigation water available to these golf courses. The City of Mesquite has a significant amount of effluent water that is not being used. In fact, the city’s effluent is actually cleaner than the District’s river water, making it easier on irrigation equipment and reducing maintenance costs.
Wolf Creek and Conestoga currently pay the District $250 per leased irrigation share while the city’s price for effluent is about $600 for an equal amount of water. For this reason, the courses have preferred to lease the District’s irrigation shares rather than purchase effluent from the city.
If the District raises its rate for irrigation shares to the market rate set by SNWA, the golf courses would almost certainly purchase effluent from the city and thus prevent the further waste of the available effluent water. Use of the effluent would free up the District’s shares for lease to SNWA at market rates and put the District in a better financial position thus benefitting all rate payers alike.
The District continues negotiating with the two local golf courses to ensure only those irrigation shares they absolutely need remain under the current leases and current rates. However, the District contends that those shares that the golf courses don’t need should be returned to the District for leasing to SNWA. That does two things for the ratepayers. One, it increases the District’s revenue stream by more than $100,000 a year. Two, it ensures that water does not continue flowing down river without appropriate income to anyone.
The District can use lease income for things like infrastructure projects and repaying debts. This puts the District in a better overall financial condition and reduces the income needed from the District’s culinary water sales. For each dollar derived from leasing out our irrigation shares, one less dollar is needed from other sources. As a result, water rates for standard water service can be reduced or at least not increased as often.
Tearing up the Town, Update 3
By Kevin Brown, General Manager
Virgin Valley Water District
As reported back in December 2016, and June 2017 the Virgin Valley Water District is moving forward with several projects that will impact residents and visitors in the Mesquite/Bunkerville area. The Airport Tank rehabilitation project was completed in March 2017. Riverside Road, Summit Court pipe replacement, and Virgin River Transmission Line projects were completed in August 2017. Bella Horizon Pressure project was completed in October 2017. Projects that are in various stages of design and will begin construction in the next six months include: Well 27A replacement, Well 1A replacement, Flat Top Mesa Tank replacement, Marilyn Parkway Pipe replacement, Upper Mesa Pipe replacement, Aztec Circle Pipe replacement. Because each of these projects will have some impact on residents (temporary noise, traffic, decreased water pressure), we ask for your patience as each of these projects are necessary critical infrastructure improvements.
Well 27A replacement. Near the intersection of Pioneer Blvd. and Oasis Blvd., drilling has been completed for a replacement water well. Bidding will begin in December for a new fence around the site, new wellhouse building, landscaping, and other site improvements. Construction should begin in January 2018 and be complete in July 2018. Potential impacts to local residents will be normal noise attributed to normal building construction and a pump rig lowering the new pump into the well.
The Well 1A Arsenic treatment plant project is next to the Bunkerville Town Cemetery (north side). We plan to build a new fence/wall around the well site, add new site piping that will connect the treatment plant up with the existing pipeline under Riverside Road (near the intersection of Riverside Road and Virgin Street), install a pump down the well hole, and construct a building at the well site to house the arsenic treatment plant. Residents can expect noise from construction work as we install the pump and construct the building. There will be traffic delays as the pipe is connected across Riverside Road. Work on this project is expected to start in December 2017 and be completed in August 2018.
The Flat Top Mesa Tank, the silver domed tank near Flat Top Mesa, will be completely removed and a taller (not silver domed) welded steel tank will replace it. Construction is slated to start in December 2017 and be complete in April 2018. Residents should not realize any construction related issues with this project.
Marilyn Parkway, Upper Mesa, and Aztec Circle Pipe replacement project will begin in December 2017 and be complete in February 2018. Residents can expect some traffic slowdowns, possible detours, and construction related noise during construction.
We will do our best to keep the public informed about the progress of these projects that are necessary updates or repairs to our water system infrastructure. Most of them are made possible by the new rates approved by the VVWD Board of Directors in April 2015 and will ensure that the District will continue to provide our ratepayers with the best service possible.
If you have questions about any of the projects, please call the District at 702-346-5731.
NOTICE TO VIRGIN VALLEY BUSINESSES OF POTENTIAL INCREASES IN WATER RATES AND SYSTEM DEVELOPMENT CHARGES
October 24, 2017
The purpose of this notice is to formally advise Virgin Valley businesses of potential increases in culinary water rates and system development charges. In evaluating the District’s culinary rates, the District has considered, among other things, the expenses of providing water to customers including capital facility projects and basic operating and maintenance costs. In examining system development charges, the District has considered its water rights, available sources of water, the need for capital improvements, growth projections, and related factors.
The mission of the Virgin Valley Water District (District) is to provide safe, reliable drinking water to the citizens and businesses of the Virgin Valley. The District is funded primarily by its customers’ water use, the associated payment of water bills and related charges. The District does not rely on property taxes or grants from governmental entities to augment its budget. Over the past several months, the District has examined its culinary water rates and system development charges.
The District was formed in 1993 and rate increases, historically, have been relatively few and far between. Nevertheless, when water rates have changed, the increases have generally been substantial. In an effort to prevent imposing large increases all at once on rate payers, the District has more recently explored adjusting rates and charges in small increments on an annual basis and these matters have been discussed in the District’s public meetings over the past several months. The District has also engaged experts with experience in setting water rates who have assisted in developing rate options that would be financially sustainable for the District while also affordable and equitable for rate payers. WaterWorth, one of the primary tools the District has used in this effort, has helped the District understand how water rates are performing now and how can they can be optimized to achieve the District’s goals.
In connection with the District’s consideration of possible increases in water rates and system development charges, the District will prepare a business impact statement and invites you and other Virgin Valley businesses to submit data, documents, and other information to the District concerning whether you believe the increases would impose a direct and significant economic burden upon a business or directly restrict the formation, operation or expansion of a business. You will have 15 business days from the date of this notice to provide such information. Responses should address the following:
1. Would increases in water rates and/or system development charges impose a direct and significant economic burden upon your business? Please explain.
2. Would increases in water rates and/or system development charges restrict the formation, operation or expansion of your business? Please explain.
Please be specific and provide as much detail as possible in response to these questions.
Following receipt of the responses, District staff will prepare a business impact statement. The District’s Board of Directors will then review and consider the business impact statement at a public meeting and make a determination as to whether the increases in water rates and/or system development charges would impose a direct and significant economic burden upon a business or directly restrict the formation, operation or expansion of a business. At a subsequent meeting, the board will hold a public hearing and decide whether to approve or disapprove increases in water rates and/or system development charges. Below is a summary of the schedule:
November 17, 2017 Deadline for businesses to respond to this notice
December 5, 2017 Public meeting to consider the business impact statement
December 19, 2017 Public hearing and meeting to approve/disapprove increases to water rates and/or system development charges
Responses should be mailed or delivered to the District at the following address and must be received on or before November 17, 2017 at 4:30 p.m. (PST):
Virgin Valley Water District
500 Riverside Road
Mesquite, Nevada 89027
Below is a summary of the changes to the District’s water rates and system development charges under consideration as different options have been discussed in the District’s public meetings. Also enclosed with this notice are two documents entitled (1) Proposed Rate Schedule Changes and (2) Impact Analysis of Proposed Rate Changes on the Average User (per meter size), which provide additional detail. The changes would entail setting the rates as shown with the annual increases occurring over the next four years and then re-evaluating and making adjustments every four years thereafter.
1. The Monthly Base Meter Rates and Block Rates would involve a 1% increase beginning in January 2018, with an additional 1% increase in July 2018, a 0.3% increase in July 2019, and a 0.3% increase in July 2020.
2. For simplicity and ease of implementation the Monthly Base Meter Rates have been rounded to the nearest $ 0.05 (five cents) and the Block Rates rounded to the nearest $0.01 (one cent)/thousand gallons.
3. The System Development Charge (the charge to developers to help offset the cost of infrastructure for future growth) is increased to $2,500 per equivalent dwelling unit (EDU) in the first year with annual increases of 3% per year thereafter.
4. For simplicity the System Development Charge has been rounded to the nearest $5.00 (five dollars).
5. The Impact Analysis of Proposed Rate Changes on the Average User (per meter size) shows the effect of the rate increases on the average user for each meter size (Exhibit A). Impacts of changes to the Base Meter Rate and Usage Block Rates are shown separately (Exhibit B). The analysis was prepared using actual water usage numbers from calendar year 2016. The low use number is based on low water usage during the winter; the high use number is based on high water use during the summer.
Finally, each customer currently pays a Debt Reduction Fee as part of the customer’s monthly bill. This Debt Reduction Fee will be reduced by $0.70 / EDU per month starting with the April 2018 billing period. It will then be reduced again by $1.00 / EDU per month starting with the July 2019 billing period. These reductions will more than offset the proposed rate increases in the next four years for the average customer.