Water Board makes preparations for rate increases

The Virgin Valley Water District Board of Directors took steps toward increasing water user base and meter rates and builder standard development charges at its Oct. 17 meeting. In a 4-0 vote the board directed staff to prepare impact statements, public notices and other work that must be done to bring the question to a final vote following public hearings on proposed increases. Due to an excused absence, director Rich Bowler was not present for the vote.

 

VVWD financial manager Wes Smith presented the board with a 4-year analysis of consumer impacts of a 1 percent base meter rate and water usage price increase in FY2018, another 1 percent in FY2019, and 0.3 percent in both 2020 and 2021. According to Smith’s analysis, the average user would see a monthly increase of less than $1 over the next 4 years, while the average business would see cost increases of about $25.

 

Smith and district manager Kevin Brown also pointed out that during that same period users would see a billing decrease of $.70 per month by April 2018 and a $1 reduction per month in July 2019 as current debts are paid off. The debt surcharge fee, currently billed at $10 a month was levied when the district was forced to borrow money to cover its operations and financial obligations under prior management.

At board direction, Smith modeled a price increase for the system development charge (SDC) that has stood at $2120 per development unit for the past 20 years. As modeled, the SDC would increase 18 percent to $2500 in FY2018 with an additional 3 percent increase in years 2019, 2020 and 2021. Mesquite’s development fee is considerably lower than some surrounding cities. The SDC increase is intended to place more of the financial burden of infrastructure expansion on developers and new users, and balance the burden carried by current users who have borne excess costs through water rate increases in recent years.

Water District puts golf courses on notice over unused water shares

After numerous discussions of irrigation water share rates, unused leased shares, and board frustration over the resistance of two local golf courses to return unused leased water shares to the water district for re-leasing, Virgin Valley Water District voted to send letters to Conestoga and Wolf Creek Golf Courses giving them one more opportunity to voluntarily agree to amend their leases and free up unused VVWD water. Giving each golf course ten days to reply, VVWD’s letter outlines the urgency of this process due to Nevada’s longstanding law of using water for beneficial purposes.

By metered records, VVWD has shown that the Conestoga Golf Course has used no more than 100 of its 150 leased water shares, and Wolf Creek has used no more than 110 of its 155 leased shares. Thus, a total of 95 leased shares are not currently put to beneficial use, with that water literally flowing down river without financial gain to the courses or the district. Conestoga pays $12,500 a year and Wolf Creek pays $11,250 for the excess water they do not use.

Since 2014, VVWD has requested return of those leased shares to help the district maximize its revenues. This would also reduce lease expenses for the golf courses by the amounts mentioned through 2019, when their current contract rate of $250 per share expires. VVWD leases other excess water to Southern Nevada Water Authority for $1246 a share, and would have been able to realize $94,650 in additional income per year if the 95 shares had been returned to the district by the courses. That opportunity exists for lease to SNWA in 2018 if the courses amend their agreements with VVWD.

By law, all water within the state boundaries belongs to the public and VVWD must prove that the shares it controls are fully put to beneficial use. The Mesquite Irrigation Company (MIC), custodian of water shares acquired by VVWD, must file Proofs of Beneficial Use with the state during 2017 and 2018 for all water associated with VVWD/MIC shares. At this time there is no beneficial use of the 95 shares in question.

The board letter goes on to outline problematic water procurement procedures of the two golf courses, since they use VVWD water before using available effluent water from the City of Mesquite. Their contracts each state, “Lessee shall use available recycled or effluent water from the City of Mesquite for Lessee’s landscaping or irrigation needs before using the Water represented by the (VVWD) Irrigation Shares.” Failure to use available effluent from the city is also contrary to Nevada public policy as stated in NRS 533.024, which “encourages the use of effluent where that use is not contrary to public health, safety or welfare.”

VVWD maintains use of its water, leased to the golf courses at $250 per water share, is a material breach of VVWD contract, as the courses use it when city effluent water, priced at $680 for the same number of gallons, is available. VVWD’s letter concludes that “such a breach potentially justifies a rescission of the lease and return of all shares to the district.” VVWD, however, states that it “prefers an amicable resolution of the issue” in which the golf courses amend their contracts for leased shares to 100 (Conestoga) and 110 (Wolf Creek).

John Schippert of Conestoga LLC addressed the board concerning its draft letter. He maintained that a disagreement of the actual water volume in a water share merits an extension of time for negotiation. He proposed that any amendment of leases be postponed to allow local golf courses to discuss share allotments and be assured that all courses would have water service available throughout the year. He then asked for time to meet with staff and board members to discuss “combining resources and the future cost for shares.”

Board member Barb Ellestad responded to his remarks by citing the State Engineer’s permit documentation that identifies one water share as 7.18 acre feet of water, a figure that has been published for years. She stated her vehement opposition to further discussion of the issue outside a public meeting. She and other board members voiced concern of violating open meeting laws or working on misinformation in any meeting that is not on record. Schippert also stated his preference for working in a public meeting. The board agreed to provide time for an open meeting to occur before the State-required filing of beneficial use is due by December.

In further business, Brown and hydrologist Aaron Bunker reported that BLM right of way authorization for Nickel Springs access within Gold Butte National Monument has not been issued. Other district capital projects are on track, however, and the Bella Horizon pressure zone valves are in successful operation. VVWD is working with Pulte Homes and national water experts to identify potential poly pipe that will relieve ongoing lateral pipe failures.

 

Comments

  1. Teri Nehrenz says:

    “In further business, Brown and hydrologist Aaron Bunker reported that BLM right of way authorization for Nickel Springs access within Gold Butte National Monument has not been issued. ”

    I wouldn’t hold my breath waiting for it either. It’s going to be caught up in red tape (Bureaucratic B.S.) forever. I can’t believe that all of the Gold Butte supporters didn’t see this coming. How naive to believe anything the government promises. Would that one compromise in boundaries have hurt your cause that much? That was a small compromise for the peace of mind NOT to have to deal with this issue…you’ve now supported something that just may compromise Mesquite’s future; how irresponsible.

    It is one thing to want to protect the land, I’m all for it… but what significant value was that land to the monument that trumped the value of that land/water to Mesquite?

  2. Tony Gems says:

    Shippert and pulte have no credability at all.
    Pulte lies to the residents, pulte lies to anyone they have dealings with.
    First , pulte sells almost all there water shares when they developed the land up there and had to buy water from oasis golf course.
    Then shippert and pulte let water flow down stream for yrs screwing the water district. UNBELIEVABLE !!!!!!
    Now that pulte is selling Conestoga for whatever reason, Sippert WANTS TO MAKE A DEAL SO PULTE CAN BENEFIT ON THE SALE END.
    PULTE IS A BUNCH OF CROOKS THAT SHOULD NOT BE TRUSTED ON ANYTHING.
    WATCH PULTE AND SHIPPERT- so the VVWD CUSTOMERS DO NOT SUBSIDIZE
    PULTE AND SHIPPERT AT THE COST OF THE CUSTOMERS.

  3. Tony Gems says:

    “John Schippert of Conestoga LLC addressed the board concerning its draft letter. He maintained that a disagreement of the actual water volume in a water share merits an extension of time for negotiation.”

    “Board member Barb Ellestad responded to his remarks by citing the State Engineer’s permit documentation that identifies one water share as 7.18 acre feet of water, a figure that has been published for years. She stated her vehement opposition to further discussion of the issue outside a public meeting. “

    THERE YOU GO – shippert trying to re-invent the water volume in a water share that has been standard for years, to SHIPPERT AND PULTE’S ADVANTAGE.
    And good thing Barbera put shippert in check when shippert wanted to try to snake a private meeting so once again pulte and shippert can manipulate and control the meeting the way pulte and shippert are famous for.
    WATCH PULTE AND SHIPPERT-if we don’t we as vvwd customers we will end up paying a subsidy and getting taken by SHIPPERT AND PULTE.

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