Part of the arguments in a lawsuit the Wolf Creek golf course filed against the Virgin Valley Water District (VVWD) last year is a disagreement over the number of shares that are actually used to irrigate the course. The 2011 lease agreement allows the course to access 155 shares, at $250 a share, yet metering records show the course only uses about 110 shares.
Beginning in 2014 the water district asked Wolf Creek to return 45 shares so it could lease them to the Southern Nevada Water District (SNWA) for $1,246 a share.
The following are excerpts of a deposition conducted by VVWD attorney Bo Bingham with Wolf Creek golf course part owner, Cory Clemetson as part of the discovery phase of the lawsuit.
This part will discuss Clemetson’s efforts to monitor the amount of water the golf course uses, where it’s used, and to reach agreements with VVWD prior to the lawsuit.
Number of shares being used
Bingham said, “How exactly do you calculate that you need 155 shares? Go through the scenario of summer and winter and tell me.”
Clemetson explained, “I don’t know. I’m not a hydrologist. I’m not a golf course superintendent.”
When Bingham asked “Who have you asked to do that for you?” Clemetson replied, “I asked originally Kelby Hughes.”
Note: Hughes was the golf course superintendent from 2000 to the late 2000s. Clemetson testified that it was Hughes who told him from the beginning to lease 155 shares. Hughes testified earlier this year in a deposition that he now believes the course only needs 125 shares.
“And Kelby Hughes is now telling you 125. He’s now saying 125 provides you enough shares and even with a cushion in the event of a drought. So there’s 30 shares that are not being beneficially used. Why has Wolf Creek not returned those shares?” Bingham asked.
“I guess why would we at this point?” Clemetson said. “I mean, we believe we are using the water appropriately.”
Clemetson continued saying “And there’s been no guarantee – I mean, again, from our perspective, we haven’t been able to undertake an investigation at this point in time because, you guys are saying 110, he’s saying 125, and we’ve got a lender that is under the assumption that there’s 155 that’s been needed.”
Bingham asked, “And you haven’t reached out to the lender to discuss this issue? You haven’t provided the lender with any of the MIC metering records; correct?”
“At this point in time, I haven’t,” Clemetson replied.
“You’ve been asked numerous times, through correspondence, to return some shares because you’re not using all of them. Do you have any records to support your claim that you need 155 shares for Wolf Creek?” Bingham asked.
Clemetson said, “Again, I’m going off of the lease that we signed.”
“Other than the lease itself, other than Kelby’s original statements to you that you guys may need 150 shares, is there any other information or evidence that you have to support that Wolf Creek needs 155 shares?” Bingham asked.
“No,” Clemetson said.
Towards the end of Clemetson’s deposition, Bingham said, “So the District is telling you that it has the ability to make a fair amount of money if you guys would cooperate with beneficial use and return the unused shares. And there’s even correspondence that I’ve look at recently where it says Wolf Creek will cooperate in any way with the District and wants to maintain a good relationship, and all of that.
“But what Wolf Creek has done by not returning those shares are two things: One, it’s prevented the Water District from leasing those shares to SNWA at market rates, or at least according to the share rate in the 2014 agreement between the Water District and SNWA. So the Water District has lost money there. It’s also impacted the District and all the other shareholders in the Valley because MIC was unable to demonstrate beneficial use of the water right.
“To me, it doesn’t seem like Wolf Creek was cooperating with the Water District’s requests to prove beneficial use. You’ve indicated that you didn’t ask anybody to look into what you’re actually using. You didn’t look into it yourself. Why would you not just rely on the Water District’s statements that you’re only using 110 to 120 shares, or why would you not just rely on MIC and their metering records indicating that you’re using something less than 125 shares? If you weren’t going to look into it yourself, why would you not just rely on those parties?”
Clemetson replied, “Let me try to go through your question. Number one, I think I answered it in the fact that eventually Jeff Sylvester’s [Clemetson’s attorney] office responded to your concerns. In 2017, clearly you weren’t in the position to lease- as we knew in November, there’s correspondence and emails that say we need to get together.”
Bingham interjected saying, “But you didn’t know that” [about the district’s negotiations with SNWA over changing the accounting methods for the joint lease of water between the two public entities.]
“Of course I didn’t know that,” Clemetson said. After some back-and-forth, he continued “I’m not trying to laugh, but, I mean, here you are. Look at your consistency level. I mean, in a normal business relationship, every time I’ve tried to cooperate, it hasn’t went anywhere. And we feel like we’ve been misled.”
Bingham referenced a letter the district sent Wolf Creek in 2014 asking the course to return 45 shares of unused water saying, “From October 2014 to the end of 2017, there’s approximately three years; right? So for three years Wolf Creek didn’t do anything to cooperate, didn’t do anything to try to ascertain how many shares that you guys needed. Why did Wolf Creek wait until 2017 before it made – if these letters from your attorney are some effort to try to resolve this, if that’s truly what they are, why did you wait three years to do that?”
“I don’t think we did anything because, guess what, we had a contract. We have a lease. You know, it was up to you to do those things,” Clemetson said.
Place of irrigation water use
Bingham asked, “Is all the water that Wolf Creek gets from the 155 shares that it leases from the District going on the Wolf Creek Golf Course?”
“No. I think-no,” Clemetson replied.
“Where else is it being used,” Bingham continued.
Clemetson said, “the Classics and the Cascades. We have an access agreement with them.”
“Is it your testimony that it was in 2012 or 2013 that water that Wolf Creek leases from the District was used somewhere else other than the Wolf Creek golf course?” Bingham asked.
“My testimony is that from the beginning of time, my dad and Dennis Rider owned Wolf Creek, they also owned the Cascades. They owned that whole inside of that area, Paradise Canyon. And the Classics were condominiums, and the Cascades were homes that they owned. When they built Wolf Creek, irrigation water had been used and potable water had been used to all of the entities through Wolf Creek’s lines, as far as I understand it. So from the inception of – would have been whatever – 2000 time frame,” Clemetson explained.
“And Classics and Cascades used the water on their landscaping around their developments?” Bingham asked.
“Yeah. They always had been using those, from what I understand,” Clemetson said.
“You signed the lease in 2011 indicating that Wolf Creek wouldn’t sublease or assign the MIC shares. Did it not raise a concern in your mind that you guys were already allowing the Classics and the Cascades to use that water at that time,” Bingham asked.
Clemetson replied, “When the lease was signed, we didn’t know that the Cascades, that they weren’t paying for water. Because at the time when the development was began, there was bankruptcy, different people. It was actually [financial officer] Kathy Bussman that did the research when we were looking at our water bill and why it’s so high that this was brought to light. At least I was unaware of it. And immediately when that happened, you know, obviously we talked to the homeowners.”
Note: Beginning in 2012, Wolf Creek required the Cascades and Classics to pay the course for the part of the 155 shares of water they use for irrigation.
After each part of this series is published, it is available online at www.MesquiteLocalNews.com.
Part 1 of this series examined the origins and ownership of Wolf Creek golf course by Cory Clemetson and his brother Chad. https://mesquitelocalnews.com/2019/07/24/wolf-creek-does-their-lawsuit-hold-water-part-1/
Part 2 discussed issues about the lease agreement between VVWD and Wolf Creek for 155 shares of irrigation water which is the heart of the lawsuit. https://mesquitelocalnews.com/2019/07/31/does-wolf-creek-lawsuit-hold-water-part-2/
Part 4 will cover information about Clemetson’s $2.125 million loan for which VVWD issued an estoppel agreement in 2012.
Part 5 will review Clemetson’s deposition in relation to setting the price of irrigation shares.
Part 6 will provide information about people Clemetson has hired like former VVWD Hydrologist Michael ‘Boomer’ Johnson after he left prison, former VVWD attorney George Benesch while he was serving as VVWD counsel, former water board members Sandra Ramaker and Robert ‘Bubba’ Smith, and local blogger Mike McGreer.
Paradise Canyon, LLC, which owns the Wolf Creek golf course in Mesquite, sued VVWD in May 2018 in civil court over a 2011 lease agreement that provides the golf course with irrigation water. Wolf Creek leases its shares of non-potable irrigation water at $250 a piece for a total annual payment of $38,750. The lease comes up for renewal this year.
As part of Mesquite Local News’ mission to educate and inform the public, this series of articles will examine the genesis of a lawsuit Paradise Canyon, LLC, owner of Wolf Creek golf course, filed against the Virgin Valley Water District (VVWD) in May 2018.