The Directors of the Virgin Valley Water District, in a 5-0 vote, unanimously approved a final budget for FY2018 on May 16. The 2018 budget calls for capital and operating expenses totaling $11 million. The VVWD budget will be submitted to the State of Nevada by May 30.
District CFO Wes Smith led preparation of the budget this year in a thorough process that relied on data drawn from an updated Master Plan, as well as algorithmic solutions determined by evaluation of long term expenses and revenues of the district. A tentative budget outlining projects for the coming year was approved in April. Revenue levels calculated to cover those expenses were authorized during Tuesday’s meeting in a stepped five-year rate increase schedule.
Public hearings and formal adoption of rate increases may occur later this year. Plans to keep up with infrastructure expenses would require a 2 percent water rate increase during FY2018, 1 percent increase in both 2019 and 2020, and 0.5 percent rate increase in both 2021 and 2022. These increases would apply to each ratepayer in the district.
Board member Barbara Ellestad insisted that the public record clearly show the stepped increase schedule in the interest of informing local residents and businesses of a possible five percent rate change over the next five years rather than the larger lump increases that occurred in the past. Board Vice President Ben Davis commended Smith for embracing a conservative budgetary approach and using advanced planning technology that simplified the budget procedure.
Board members denounce attempted legislative end-run
It was brought to light during this meeting that executives of Wolf Creek and Conestoga Golf Courses apparently sought to override the district’s rate-setting authority by introducing a bill (SB461) in the Nevada Senate. The action was taken without any notice given to local authorities. If passed into law, SB461 would require that any VVWD-approved rate increase exceeding 5 percent could be appealed to the Clark County Commissioners, who would have final decision whether the increase was “just and reasonable.”
The draft bill was submitted to Nevada District 10 Senator Yvanna Cancela for introduction. Mesquite is not in Cancela’s district, which covers parts of Las Vegas. No advance notification of the proposed bill was provided to VVWD, the city of Mesquite or its elected Nevada representatives, Assemblyman Chris Edward and Senator Joe Hardy or Clark County Commissioners. Local officials learned of the bill after Cancela informed Mesquite’s lobbyist Warren Hardy of the proposal.
Several golf courses in Mesquite lease irrigation water shares from VVWD. Apparent dissatisfaction with local water pricing stems from the sharp rise in water share price that occurred several years ago when VVWD accepted an offer from Southern Nevada Water Authority to lease district-owned Mesquite Irrigation Co. water shares for $1,246 per share and Bunkerville Irrigation Co. shares at $1,510 each. Under their fiduciary responsibility to District rate payers, the Board was obliged to accept those bids, which eclipsed previous $250 per share rates paid by local golf courses. All contracts guaranteeing the $250 rate expire in 2019. Golf courses in Mesquite rent between 80 and 155 water shares from VVWD, currently paying $250 per share. How much that will change in 2019 is yet to be determined. Board members had previously proposed that local users be extended a discounted rate, but that 2-tiered pricing was determined to be illegal.
Reacting to the prospect of legislated oversight of rates, District Manager Kevin Brown and CFO Smith contacted the district’s bond attorney, Sherman & Howard. Their opinion on the legality of SB461 related to the district’s ability to set rates that meet the obligation to repay district bonds. Sherman & Howard responded the Nevada Legislature would likely violate the contract clause of VVWD bonds if it altered the appeal process of District rate increases, and would likely be held unconstitutional.
A meeting was called on May 5, attended by Brown and VVWD representatives and the Wolf Creek and Conestoga golf course owners. They discussed possible alternative options of a rate review that might substitute the Public Utilities Commission instead of Clark County Commissioners. No complete response has been received from the PUC concerning their capacity of reviewing water lease rates and provide non-binding recommendations.
Discussion followed, alluding to a current attempt by Mesquite Gaming Golf Manager Brian Wursten to form a cooperative effort among local golf courses, the water district and the city to determine a satisfactory course of action that could bring a local solution to water share affordability. This effort, apparently in its early stages, could not be described in specifics.
Ellestad, in a condemnation of the tactics used in introducing the proposed legislation, expressed her extreme dismay that the golf course owners chose to bypass every local official in seeking to influence water pricing. Returning to a reference of “chicanery” made earlier in the meeting, she asserted that legislative attempt to sidestep the elected District board was a severe disservice to the voters of the district who are the final decision makers on the board’s actions. She applauded attempts at cooperative efforts by the golf courses and elected officials in solving this issue. “The golf courses, City and VVWD can go a long way toward solving problems for everybody. We have two years to find a solution before the contracts expire,” Ellestad said.
Board member Rich Bowler, commenting on the value of local control of local problems cited Mesquite’s success as a [incorporated] city. “Mesquite took its future in its own hands. Clark County Commission is not interested. I will never vote for outside oversight. Voters are our oversight.”
Board members Ben Davis and Travis Anderson stated willingness to continue to work on a solution for the issue. “We need to get questions answered for the public,” asserted Anderson. “I don’t want to make rushed errors.”
Wrapping up a contentious meeting on more positive notes, Hydrologist Aaron Bunker reported that work on Well 27 abandonment was now done, and Brown stated that work on the Riverside Road project and trans-river pipeline was coming along on schedule. “Businesses and residents are tired of the construction, but it will be done mid-June.”