VVWD prevails in Pool Pact insurance claim

At the June 19 Virgin Valley Water District (VVWD) Board of Directors meeting, counsel Bo Bingham announced the district has been offered a proposed settlement of $900,000 pursuant of its claims against the Nevada Public Agency Insurance Pool (Pool Pact). The board unanimously voted to approve the settlement.

The proposed amount would be paid to VVWD in return for dismissal of all claims asserted by the district in a case concerning the criminal fraud conviction and civil litigation against former district hydrologist, Michael Johnson and others.

Civil court cases were decided in favor of VVWD several years ago, and VVWD received partial recovery of its losses. It also filed a claim with its insurer, Pool Pact, for coverage of losses under the policy’s employee misconduct endorsement clause. Pool Pact denied VVWD’s claims.

The district felt its claims were wrongly denied and brought suit against Pool Pact in Clark County District Court. Pool Pact and VVWD representatives met in settlement talks prior to a court hearing and Pool Pact agreed to pay VVWD $900,000 on its claims of $1 million. VVWD’s case was successfully handled on contingency by an outside law firm, which will receive one third of the settlement plus minor expenses.

The Board heard good news from Chris Mikell of Bowen Collins and Associates. BCA, a frequent engineering consultant for VVWD, was contracted to do a complete analysis of its well production and water system health this past year.

Groundwater hydrologist Mikell analyzed the condition of VVWD’s system of deep water wells, the valley’s entire source of culinary water. While speaking specifically to the working life of its seven active wells and their quality of water, Mikell also answered a critical question for the VVWD board: Can the aquifer serving Virgin Valley sustain itself into the future? Mikell’s conclusion: Yes.

Using district records, Mikell studied the stability and life expectancy of each of the districts wells, the recharge of the aquifer, and recovery rate of water table surrounding those wells. His conclusions are based on historical records up to 2017, not new testing. He found that each functioning well, when taken offline, has been able to recharge its water source in no more than nine months with negligible recent decreases in the surrounding water table.

According to the study, “The observed static water level decline of 10-20 feet in the vicinity of most District wells has remained stable for the past several years, and none of the wells show a trend of declining water level over time. The recovery of the water table is 3 to 9 months…the water table continues to recharge and is not permanently dewatered. Drawdown caused by the District’s pumping stresses the aquifer, however there are no trends of declining water levels or significant permanent dewatering of the aquifer.”

One exception Mikell noted, “Well 26 has pumped continuously for 4 years and has not been allowed to recover.” Mikell, therefore had no information on aquifer recharge in the area of one of VVWD’s highest producing wells. He noted the well is past its life expectancy of 20 years and is in fragile condition. He recommended replacement of the well by year 2021.

Speaking to the district’s operations, Mikell concluded that VVWD does a good job of producing and delivering good water quality to its users. He sees challenges in the life expectancy of its wells, due to slightly corrosive groundwater conditions and excessive sand production caused by the fine-grained sand and silt aquifers of the area. District wells are susceptible to biofouling/bacterial presence and must be tested and treated frequently. He notes that VVWD consistently meets all required state standards for its water.

The study reveals that VVWD draws 84 per cent of its water from its three top-producing wells in service: well 26 on Hardy Way, well 31 south of the Virgin River, and well 33 north of Mesquite in Lincoln County.

Mikell recommended purchase of replacement pumps to avoid any lag time often associated with pump repair/replacement. Indeed, while the study was being performed, the pump at high-producing well 31 failed completely. The well was brought back online in a matter of days because the district had a pump on hand. No interruption of water service occurred during that repair.

VVWD’s dependence on just three wells will be lessened in the next year as two additional wells come into service. The district is currently in final stages of finishing the pumphouse and line connections of its well 27A on Pioneer Blvd. That well is a high-producer that was drilled after its predecessor failed three years ago due to pump and casing issues. Well 1A in Bunkerville has been drilled and awaits construction of its pumphouse and connection to the system. VVWD is currently in planning stages for drilling a new well, 34, north of the city.

VVWD wells now have exceed their 20-year life expectancy. Well 31, which recently failed, was expected to be serviceable for up to 20-25 more years but failed prematurely. Wells 27A and 1A wells have been outfitted with all stainless-steel casings and louvered screens to give the wells a 50-year life expectancy.

The report was generally favorable to current VVWD management practices and procedures. Mikell noted that the district delivers good quality water even as it deals with issues of corrosive high mineral content, silt soil, and susceptibility to bacterial fouling of wells.

He had specific recommendations for preserving the integrity of the VVWD water system.

Topping his list is implementation of a standardized protocol of well testing and inspection for water quality and well condition. Mikell recommended bacterial lab testing of the district’s three high-producing wells and field testing of all wells on a scheduled basis. He sees a need for twice-yearly inspections of all wells to establish a baseline of well and water conditions.

Some of Mikell’s recommendations are already reflected in the district’s five-year master plan, but VVWD president Nephi Julian, in moving to accept the study, proposed that the district move to a three-year planning period and incorporate a well study in each future report to improve forecasting and budgeting.

In his report to the board, district general manager Kevin Brown announced that the executed agreement with Conestoga Golf Course for return of excess leased water shares has been received. Those 50 shares will now be leased to Southern Nevada Water District at the market value of $1,246.

 

 

Comments

  1. Burton Weast says:

    Having covered the Pool Pact insurance claim for the MLN, it is very gratifying to see the WWVD recover at least most of what they were rightfully owed. The Nevada legislature needs to re-examine the statutes that allows the Nevada Public Agency Insurance Pool is governed and change the law to make sure the Nevada Insurance Commissioner has clear authority over their operations. Both the City of Mesquite and the VVWD had troubles with claims and subsequently quit the pool. More cities, counties and school districts need to do the same in order to get them to be serious about how the operate with public money. Thank you VVWD for sticking to your principles and pursuing Pool Pact in court.

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