As a court hearing date nears, the Virgin Valley Water District filed its reply to Paradise Canyon’s latest salvo concerning a 2011 lease granting Mesquite’s Wolf Creek golf course 155 shares of irrigation water.
In previous filings, Paradise Canyon accused the district of using its monopolistic hold on water to extract a 500 percent price per share increase from $250 to $1,246 when the lease comes up for renewal Jan. 1, 2020.
Paradise Canyon also argued that language in the lease requiring the golf course to use City of Mesquite effluent water before it used VVWD water was not enforceable because the city “has not made treated, effluent water available to Paradise Canyon.”
The latest VVWD document refutes both allegations by Wolf Creek.
“One of the main themes of Wolf Creek’s Opposition is that the District is a ‘monopolistic’ utility bent on exacting blood from Wolf Creek. This allegation is flat-out silly to anyone knowledgeable on these matters,” the district document filed Aug. 20 said.
While the district admits it is the “sole purveyor of culinary water…this case is not about culinary water, it is about irrigation water. There are more than 100 different owners of irrigation shares in the Virgin Valley and Wolf Creek has many different options for obtaining irrigation water.”
A contract signed in April 2000 between Wolf Creek and the city says it will provide Paradise Canyon “with a maximum of 1,000,000 gallons per day, 365 days per year.” And that after other allocations of the city’s effluent water “Paradise Canyon will receive the remaining amount of reuse effluent up to 1 million gallons per day as it becomes available from the treatment plant.”
Paradise Canyon has long argued in other situations that the contract requires the city to provide at least one million gallons per day and that the contract is not enforceable at anything less than that.
While irrigation water from VVWD currently costs Wolf Creek $250 a share, equivalent amounts of city effluent water costs approximately $600 a share.
To refute Wolf Creek’s charge that the city has not made effluent water available, the Mesquite City Attorney Robert Sweetin submitted a sworn affidavit in the VVWD filing that says “In 2011, when Wolf Creek and [VVWD] were discussing and negotiating leases of the District’s irrigation shares, the price for the District’s irrigation shares was so low ($250 per share) that the City feared Wolf Creek might refuse to purchase effluent from the City and take the District’s irrigation shares instead. Accordingly, the City requested and the District included a provision in its lease agreement requiring all lessees to use available effluent before using the District’s irrigation shares.”
Sweetin also says in his affidavit that “I am informed that Wolf Creek has alleged that the City does not have effluent available for Wolf Creek. Such a claim is false. The City does have effluent available for Wolf Creek.”
Sweetie adds that “If Wolf Creek continues to refuse to accept the available effluent, the City may take action against Wolf Creek for breach of the Agreement.”
The district’s Aug. 20 filing says that “The Effluent Agreement between Wolf Creek and the City requires Wolf Creek to accept ‘up to’ 1 million gallons of effluent per [day]. It does not require that the City be capable of satisfying 100 percent of Wolf Creek’s needs prior to Wolf Creek accepting any effluent at all.”
Documents filed by Paradise Canyon on Aug. 9 included identical statements from previous board members Karl Gustaveson and Sandra Ramaker (currently running for Mesquite City Council) supporting Wolf Creek’s claims against the water district. VVWD’s Aug. 20 filing says the “documents are inadmissible” because they are “neither sworn affidavits nor unsworn statements made under penalty of perjury. These omissions are particularly troubling since large portions of the documents appear to be ripped straight from Wolf Creek’s Complaint.”
The district also alleges that the documents should be thrown out because “the Lease was approved by a vote of a majority of the District’s board, constitutes board action, and any single board member’s opinion or belief is, as a matter of law, irrelevant and non-binding on the District.
“The fact that it has convinced two former directors (one of whom was financially supported by Wolf Creek in her campaigns for the District’s board of directors) to sign unsworn and inadmissible documents does noting to change the unreasonable nature of this belief.”
As part of Paradise Canyon’s original court filing in May, it alleged that the lease language preventing it from subleasing any part of its shares is not legal.
VVWD’s document refutes that in short order with “Wolf Creek is a mere lessee, not an owner of irrigation shares. As to lessees, the Nevada Supreme Court is clear that restrictions on assignment of the lease are valid.”
The Aug. 9 document offered that Wolf Creek would sub-lease its unused shares directly to Southern Nevada Water District for $1,246 a share and return to VVWD any profits but only if the District agreed to a 20-year lease of the shares at $450 per share without any escalation over the life of the lease.
The district answered saying “that ‘offer’ came at a very steep price (which, unsurprisingly, Wolf Creek has omitted from its Opposition). Wolf Creek offered to pass on about $1 million in subleasing profits in return for the District giving Wolf Creek a discount from market rate of at least $3 million over twenty years. Unsurprisingly, the District was not interested in a $2 million loss to its ratepayers in favor of a golf course.”
The document adds that “If Wolf Creek truly – for the first time – intends to pass subleasing profits on to the District gratis, with no strings attached, the District stands ready and willing to make that deal and applauds Wolf Creek for its decision to start acting reasonably.”
The case is scheduled to be heard at 9 a.m., Aug. 29 in Las Vegas before District Court Judge Timothy C. Williams.
For more background information access these articles on Mesquite Local News.com:
June 6: https://mesquitelocalnews.com/2018/06/wolf-creek-golf-course-sues-water-district/
June 20: https://mesquitelocalnews.com/2018/06/water-board-hears-about-golf-course-lawsuit/
July 11: https://mesquitelocalnews.com/2018/07/water-district-replies-to-wolf-creek-golf-course-lawsuit/
Sweeten is wrong. He should read the August 19, 2011,letter to the City written by George N. Benesch, acting as the attorney for Paradise Canyon. In the letter, Benesch recounts a discussion with Bill Tanner, , the City’s Public Works Director who on August 24, 2011 told him that all the city’s effluent was committed, and no effluent was presently available for Paradise Canyon use. Except, he said for a minimal amount in December, January and February. The letter goes into further detail about effluent shortfalls, and the Cities default causing the golf course to halt plans to build an effluent infrastructure. Sweeten needs to publicly correct his statement.