Following action taken at its last meeting, the Virgin Valley Water District sent letters to two Mesquite golf courses, Wolf Creek and Conestoga, requesting them to return unused irrigation water shares to VVWD. The board received replies via a Las Vegas law firm retained by both courses that were reviewed and discussed by the VVWD Board of Directors at its Nov. 7 meeting.
Conestoga holds two leases totaling 150 shares and Wolf Creek leases 155 shares. Both courses pay $250 per year per leased share under contracts that were signed in 2011 and run to 2019.
Water resourcing is a critical part of golf course operation. Wolf Creek was able to obtain a $2 million loan after its VVWD contract was signed in 2011. Since 2011, each course has used VVWD water district irrigation water as primary water source, despite the fact that both courses also hold City of Mesquite contracts that call for using city waste water effluent as their first water source.
The VVWD contracts signed by both courses stipulate that “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.”
City records indicate that effluent has been available and is sold to customers at the rate of $608 for gallons equivalent to a VVWD water share. Use of city effluent has not occurred at Wolf Creek and only in minor amounts at Conestoga in city records dating back to 2014.
VVWD metered records of water use show that, historically, Conestoga Golf Course uses less than 100 of its 150 leased shares per year, and Wolf Creek uses no more than 110 of its 155 shares each year. The courses continue to pay full price for their contracts, indicating that Conestoga pays $12,500 a year (50 x $250) and Wolf Creek pays $11,250 (45 x $250) a year for water they do not use. That irrigation water essentially flows down river without beneficial use to the valley.
The under-use of irrigation water in those contracts comes under scrutiny because the State of Nevada, which is the final legal owner of all water within its borders, requires that all water allocated to any district or water system be put to beneficial use. Mesquite has been granted use of 12,009 acre feet of water per year through state agreements with the Mesquite Irrigation Company (MIC), which along with Bunkerville Irrigation Company (BIC), held the original water rights of the valley.
MIC has been directed to “prove up,” or account for the beneficial use of its entire allotment of water, which requires VVWD to, in turn, show beneficial use on its leases of MIC water shares. The state has asked this be done in 2017-2018. Proving full beneficial use is not currently possible due in part to the shortfalls in golf course usage.
Speaking to the VVWD board on behalf of MIC, Kraig Hafen outlined MIC’s need to produce complete records to the state water engineer covering 12 months of water usage. He indicated that it is important that MIC begin that record keeping within a few months to comply with state law. Such compliance is extremely important in the long term, as failure to prove beneficial use can potentially impact the right of the Virgin Valley to request increased water allocation in the future. Hafen pointed out that MIC is interested in simply proving up the total 12,009 acre feet of water, not the pricing or contractual issues negotiated by VVWD with the golf courses.
The VVWD board has twice requested Wolf Creek and Conestoga return 45 and 50 water shares respectively. The first request made in 2014 brought no resolution. In its letters, VVWD outlined what it termed a “win-win” outcome of returning those shares, as the golf courses would reduce their yearly lease fees and VVWD would be able to subsequently lease those shares to Southern Nevada Water District of Las Vegas for about $1246 per share.
The board saw this as a means of assisting the courses financially, and allowing the district to gain more than $100,000 a year in revenue that would mitigate district expenses that were otherwise paid through rate increases for metered water users and assumption of debt. VVWD would need to recover control of those water share leases by Dec. 31 to allow reallocation to SNWA or another lessee in 2018.
On Oct. 17, after reviewing public documents from the City of Mesquite on availability and use of City effluent and VVWD’s own records of metered use of irrigation water, (see MLN, Oct. 19) the board sent second letters of request to both golf courses.
Those recent letters were answered by letters from the Sylvester & Polednak law firm of Las Vegas asking for “any and all documents evidencing the demand by the (MIC) Irrigation Company and the state engineer upon the (VVWD) District to establish beneficial use; and any and all documents factually supporting your claim that the water, the subject of the Lease has not been, or is presently not being put to beneficial use.”
The law firm also asked that VVWD provide documents “evidencing that the City of Mesquite has available effluent [for the respective golf courses], and that [the respective golf course] has failed to use the available effluent water.” The law firm requests essentially demanded records that were made available at the Oct. 17 meeting.
The board, with each member expressing concern over the delay of the state-directed proving up process and potential lease renegotiation in what they view as a “win-win” situation for all parties, voted unanimously 5-0 to forward the requested public records to the attorney.
Water District updates developer rules and regulations
The Board approved a revised set of rules and regulations to mirror policy changes previously enacted. These are relevant to developers applying for permits, intending to eventually hook into the VVWD water system, but the revamping of the manual also prepares the way for VVWD to raise the system development charge (SDC), formerly called an impact fee.
The VVWD board proposes to raise the per-unit charge from $2,120, a fee that has gone unchanged in 20 years, to $2,500 in 2018, with incremental 3 per cent increases during three subsequent years. The rate increase is part of VVWD’s overall effort to rebalance the cost of infrastructure expansion from current users to developers and new users.
The board voted unanimously, 5-0, to approve staff-recommended changes in the manual. The updated manual will be used to notify developers of proposed rate increases. Any fee or rate increase must be publicly noticed and is subject to public comment before board enactment.
The district has taken a number of steps this year to improve its advance planning to keep pace with inflation and water needs of an expanded population in the valley over the next 60 years.
Key to that planning has been the implementation of the WaterWorth software program now
used by VVWD. The software allows VVWD to study comparative scenarios in assessing long term outcomes of various levels of infrastructure maintenance and expansion and the revenue needed to sustain water delivery for the district.
Such evaluation has assisted the board in levying an upcoming 2 percent rate increase for metered water users in two intervals instead of adding it as a single rate hike. In 2015 the board was forced to raise rates dramatically to meet a financial crisis caused by prior mismanagement and actions that ended in conviction of the former district hydrologist and another individual found guilty of defrauding VVWD. Current board members have publicly decried using steep rate increases or assumption of future debt to cover district expenses.