Selling irrigation water shares to the Southern Nevada Water Authority and setting higher rates for those shares was a controversial decision at the special meeting on May 15 of the Virgin Valley Water District.
The meeting started with board member Kraig Hafen recusing himself as he and his family own irrigation shares.
The board was presented with a staff proposal to set a fee for 14 shares in the Bunkerville Irrigation Company (BIC) that have become available for leasing. The proposal set the annual rent amount for shares at $1,512.50 for BIC shares and $1,246.00 for shares in the Mesquite irrigation Company (MIC) if they become available at a later date.
Water district attorney Bo Bingham told the board “The board can approve these rates or set whatever rate they want.”
A second staff recommendation was to lease the 14 shares at the new rates to the Southern Nevada Water Authority (SNWA). The staff informed the board they have been negotiation with the water authority for several months and that they had agreement between staff of the agencies on the rates and lease terms.
Board member Sandra Ramaker expressed concern that the new rates could affect the rates that would ultimately be paid by golf courses and others in Mesquite when their irrigation leases expire in 2019. “I remember that in April we had staff put together a committee that would come back with some solutions that would make this a win-win situation for everyone.”
Ramaker asked Bingham “What bearing this has and where the committee stands and if it can be explained that the rate is only for these shares?”
Bingham said his understanding was the same. “The purpose of the committee was to get input from the golf courses and others to get a solution that makes the most sense.” Bingham told Ramaker that the 14 shares under discussion “Are available immediately and the district could have money coming in as soon as the board approves it.”
District manager Kevin Brown told the board that only about half of the committee members had been contacted about the proposed rate for the 14 shares.
Board member Kenyon Leavitt said he had contact with several parties concerned with the future impact of the SNWA rate on existing leases but that “I am pretty confident we are only talking about these 14 shares or additional shares in future years if they become available,”
Cory Clemetson owner of Wolf Creek Golf Club told the board that he “Was showing a couple of our executives today pictures of Lake Las Vegas when the water shut down, they are dramatic. The property was recently purchased and the number one concern of all the residents was when are the golf courses going to reopen. It has affected the home prices and property values.”
“Our position at Wolf Creek is that we want to try and bring people together. We understand the problems,” said Clemetson. He urged the board to understand there are two markets for water leases with one in Las Vegas and one in Mesquite and Mesquite cannot afford Las Vegas prices.
“We want to run a golf course and employ 90 people and stabilize home prices,” said Clemetson.
Board member Rich Bowler told the board that he didn’t see this action affecting the prices for the 2019 leases and that “We should go forward and maximize our dollars.”
Bowler then moved approval of the rates for the 14 shares. The motion passed with Ramaker voting no.
Ramaker later told MLN that she voted no because she “Didn’t like the way the amounts were figured and how they came about making the decisions for those rates. I just don’t believe we will hold those rates to just SNWA.” She expressed concern that the district would be “pricing out” local people including golf courses and farmers by charging local people what they can charge in Las Vegas.
“I know the district is in a world of hurt, but we have to care about what local people can afford,” said Ramaker.
The board then discussed the proposed lease agreement with SNWA for the 14 shares.
Bingham reviewed the agreement with the board, and noted that the agreement was for 20 years, or whenever the lease payments to the district reached $4 million. The agreement also “Allows the district to make other shares available to the water authority,” said Bingham.
Mesquite residents Robert Smith and John Williams asked several questions concerning the language of the lease with SNWA. Williams and Smith expressed concern that the lease was ambiguous in places and wasn’t clear that it would not impair the rights of the committee looking at lease rates when the 2019 leases expire. Williams also questioned if the agreement gave SNWA the right of first refusal on shares other than the 14 under discussion.
Manager Brown read provisions in the lease that said the district could make arrangements with other parties at rates different than those given to SNWA.
Bingham said he welcomed any comments on how to make the lease language more clear, “If there are ambiguities in the agreement we have time to make changes.”
Clemetson asked if he could have time for Wolf Creek Golf Club legal counsel to review the document before final approval, “Obviously you don’t want to have your agreement infringe on any of our contractual rights. Because this has gone down so quickly we would like to have our lawyers look at this based on our investment in Wolf Creek Golf Club.”
Bingham replied that the agreement “Goes out of its way to make sure the rights of other parties are not infringed,” but also welcomed any suggestions. “The district will live up to the rights the golf course or any other party has,” Bingham said.
Chair Miller noted that the staff had been working on the agreement with SNWA for a long time. Clemetson told Miller the “Board had better get it right,” to which Miller replied, “We will.”
Board member Bowler moved to approve the agreement with SNWA at the rates previously approved and to direct staff to “Work with any interested parties to make sure there are no ambiguities in the contract.”
The motion was approved with Ramaker voting no.