After hearing oral arguments May 29, Judge Timothy C. Williams granted a request by Paradise Canyon to amend its original complaint in the latest round of the continuing lawsuit against the Virgin Valley Water District on June 18.
Motions for summary judgements by both sides were taken under advisement by the judge.
As Mesquite Local News reporter Linda Faas noted at the VVWD Board of Directors meeting June 18, “[VVWD] Legal and Litigation Expense is expected to finish the year with total expenditures around $360,000, which exceeds the approved budget of $120,000 by around $240,000. This budget overrun is due to the lawsuit brought against the District by Paradise Canyon, LLC (Wolf Creek Golf Course),”
Paradise Canyon LLC, which owns Wolf Creek golf course, filed its original lawsuit in May 2018 complaining the water district was trying to illegally raise its lease rate for irrigation water of which the golf course leases 155 shares.
After taking just two depositions from Kevin Brown, VVWD general manager, and Kelby Hughes, president of Mesquite Irrigation Company (MIC), Wolf Creek’s attorneys filed for a summary judgement in its favor.
A summary judgment is a decision made on the basis of statements and evidence presented in the legal pleadings and documents filed, without a trial. It is used when there is no dispute as to the facts of the case, and one party is entitled to judgment as a matter of law.
Wolf Creek argued that Brown’s testimony showed “no evidence that Paradise Canyon’s alleged refusal to use effluent water pursuant to the parties’ lease has caused VVWD any damages.”
Under the lease agreement, the golf course is required to use the city of Mesquite’s effluent (treated) water before it uses the district’s irrigation water.
The district argued back that the city has continually made at least 300,000 gallons of water available daily from November to March since at least 2011. The city claims it has gone to great lengths and spent considerable money installing the necessary infrastructure that would allow Wolf Creek to pipe the effluent water to its course.
The district also filed documents showing that “If Wolf Creek were abiding by its obligation to use the city’s effluent, the District would be receiving at least an additional $18,050 per year in additional lease revenue.”
Of the 155 shares of irrigation water Wolf Creek leases, records show that it only uses 110 shares on its golf course. The district claims that some of the 45 unused shares are being used by a third party, which violates the lease agreement.
In court documents filed by Wolf Creek it admits that it installed an irrigation system to water the common areas in the Cascades condo development that it owned when the entire complex was constructed in the early 2000s and says it has been providing irrigation water to the Cascades for more than 15 years.
Wolf Creek’s court filing says “the Cascades installed a meter to measure how much irrigation water it was using on a monthly basis so that it could accurately measure and reimburse Paradise Canyon for the water usage.”
The document shows the condo HOA pays as much as $24 in April and as little as $2 in February. It also alleges that while “The Lease does prohibit a sublease of the irrigation shares there is no sublease here.”
Another dispute being battled out in court documents is VVWD’s ability to lease its unused irrigation shares to Southern Nevada Water Authority for a much higher rate than its leasing to golf courses. While Wolf Creek currently pays $250 a share, SNWA pays $1,246 a share.
The two water utilities, VVWD and SNWA, have worked out an updated process for payment of the lease rates. Originally, SNWA paid VVWD on an annual basis for whatever shares it was leasing. In 2018, VVWD made another 130 shares available to SNWA because the Palms golf course willingly gave back 80 shares it was leasing, and the Conestoga golf course returned 50 shares it no longer needed.
SNWA can lease the irrigation shares to assist with its annual allotment of water under an “intentionally created surplus (ICS)” provision in its overall water agreement with seven states that use Colorado River water.
By using a monthly lease accounting process, SNWA stated “Our intention is to lease all the shares offered by the district for which SNWA receives ICS credits under the new accounting methods at the price set forth in the 2014 lease. This may entail accounting retroactively back to January 2019 and going forward as the district makes shares available.”
VVWD alleges that it is losing $54,000 per year based on the difference Wolf Creek pays ($250) for the 45 shares it doesn’t use and what SNWA is willing to pay ($1,200 a year).
The Nevada State Water Engineer gave local water users until the end of 2017 to show all irrigation water from the Virgin River was being put to beneficial use. The engineer’s office recently extended the deadline because Mesquite Irrigation Company (MIC) could not “prove up” 159 shares of 12,009 shares it controls in the valley.
Wolf Creek claims “there is no ripeness and thus no justiciable controversy over proof of beneficial use because there is no current requirement that VVWD prove beneficial use” therefore “VVWD has not suffered any damages.”
VVWD alleges that “Due primarily to Wolf Creek’s recalcitrance and refusal to cooperate in demonstrating beneficial use as the lease required, MIC was unable to satisfy the State Engineer’s beneficial use requirement by Dec. 31, 2017 and MIC was forced to seek an extension of the deadline” until December 2022.
According to Wolf Creek’s amended complaint granted by the judge, it wants the court to rule that it doesn’t have to use city effluent water first; that it doesn’t have to return water shares it doesn’t use; that it can sublease water if it chooses; it can lease the shares in perpetuity as long as it “pays the annual rent as determined by [VVWD] at that time in [VVWD] sole and absolute discretion; VVWD has breached the lease contract.
Most importantly, Wolf Creek wants the court to rule that the “Lease Rate shall be determined without reference to…rates paid by SNWA.” And it wants all its attorney fees paid by VVWD.
According to VVWD documents filed with the court it wants the ability for the district to set the lease rates at “its sole and absolute discretion” as the current lease contract stipulates.
A jury trial is scheduled for October.