For the last several years and since the beginning of the lawsuit Wolf Creek golf course filed against the Virgin Valley Water District in May 2018, there has been much contention on both sides over the price of irrigation water shares the district charges in its lease agreements with various entities.
Historical price of water
Since 2011, Wolf Creek, Palms and Conestoga golf courses and Bunker Farms have leased irrigation water from the district for $250 a share. Since 2014, the Southern Nevada Water Authority has been leasing irrigation water from the district for $1,246 a share. Other private irrigation shareholders in the Virgin Valley also lease water to SNWA for around the same price.
The VVWD Board of Directors voted in March to raise its lease rate for Mesquite-based water to $1,115 a share. It raised its Bunkerville-based water to $1,357 a share. The rates are effective Jan. 1.
All of the 2011 leases issued by VVWD come up for renewal this year.
The Palms golf course voluntarily returned its 80 shares of irrigation water to the district in 2018 and chose to lease from a private water source at a rate much higher than $250 a share.
The Conestoga golf course renegotiated its lease with the water district in May 2018. It returned 50 shares of the 150 it wasn’t using. Conestoga also agreed it would begin paying $650 a share in January 2020 and the price will increase 10 percent a year until it reaches 90 percent of the rate SNWA is paying at the time.
The VVWD Board of Directors said publicly that Conestoga received a lower rate than $1,115 because they voluntarily returned 50 shares sooner than the lease expiration date.
Before it began leasing VVWD irrigation water, Conestoga was paying $1,600 a share from a private water right holder.
Bunker Farms agreed on Aug. 6 to begin paying $1,357 each for the 37 Bunkerville shares it leases.
Prior to Wolf Creek filing its lawsuit, it offered to pay $450 a share without any price increases for 20 years. It also offered to sublease to SNWA for $1,246 the 30 to 45 shares of the 155 lease shares it currently holds but records show are not used and return the proceeds to the water district.
The VVWD Board of Directors turned down the offer.
During a May deposition of Cory Clemetson, part-owner of Wolf Creek golf course, VVWD attorney Bo Bingham asked a multitude of questions about the process of pricing water shares. The deposition is part of the discovery phase of the lawsuit.
Lawsuit struggles over future pricing
“Do you think it’s fair for the Virgin Valley Water District to charge one rate to one customer and a different rate to another customer,” Bingham asked.
Clemetson said, “Well, you would hope they would be fair to everybody.”
“Meaning, you would hope that they would charge the same rate to everybody; correct?” Bingham said.
“Yeah. I think in general terms,” Clemetson responded.
Bingham asked, “Do you think it’s fair for the water district to lease its irrigation shares to the highest bidder?”
“I mean, generally, if there is a, you know, benefit locally to the district and they’ve analyzed it, they can make that determination,” Clemetson said.
“It’s their [water district elected officials] call to make; right?” Bingham said.
“Ultimately, yes,” Clemetson said.
Bingham said, “And one thing that they can do that would be in the best interest of the community is to charge a rate that a party is willing to pay that will generate revenue for the district?”
Clemetson said, “Yes.”
“You think Wolf Creek should pay a lower rate because of the benefit that it brings to the community; right?” Bingham asked.
“I think Wolf Creek does a lot for the community. And I think, you know, what’s ever in the marketplace of Mesquite that’s fair, we’re fine. I think that the market is very different than what’s the market of Las Vegas,” Clemetson said.
Bingham said, “So you have to look at it for everybody in the community; right?”
“Right,” Clemetson said.
“But that’s for the elected officials to decide what that preferred rate is; right?” Bingham asked after several minutes of discussion.
“As I’ve said before, yes,” Clemetson said.
Past rate hikes
Bingham asked, “Do you think it’s fair that all of the culinary ratepayers’ rates have gone up by roughly 40 percent while Wolf Creek continues to pay $250 a share?”
Note: Culinary water refers to aquifer-sourced water that flows to every home and business and is used in everyday life. The lawsuit is focused on irrigation water from the Virgin River that is not suitable for everyday use.
VVWD increased the culinary water rate for all homeowners and businesses 10 percent in 2008 and 2009, 36 percent in 2010, 43 percent in 2015, and 1 percent in 2017 and 2018.
According to the VVWD, 92 percent of ratepayers are private homeowners while 8 percent are businesses, schools, churches, government offices, etc.
“Do I think it’s fair? Well, again, potable water isn’t the same as irrigation water. And the people in the Valley that are ratepayers, they don’t pay for – they can’t drink the irrigation water.
“So you know, they’re – it’s like apples and oranges almost as a comparison. And we share in that burden too because we’re one – as you know, we’re one of the largest ratepayers in the valley. We’re top five already. So we feel it as much or more than anybody,” Clemetson responded.
Subsidizing or subsidized
Bingham asked, “Do you feel it’s fair that the ratepayers are essentially subsidizing Wolf Creek because every dollar that is not collected under the lease to Wolf Creek at $250 is a dollar that’s going to have to be made up for by the culinary ratepayers?”
Clemetson said, “I mean, first of all, I disagree with your assumption. First of all, we’re not being subsidized by anybody, frankly. That’s been a real false narrative that’s been advanced by your board. We’re one of the largest culinary ratepayers. So, I guess, we’re – in some ways, we’re feeling the brunt of subsidizing you. You know, I think that we feel like that we’re – when you’re raising rates, you’re saying that somehow we’re getting a free pass. And we’re not getting a free pass because we’re paying as well.”
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.
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.
Part 3 discussed Clemetson’s efforts to monitor the amount of water the golf course uses and to reach agreements with VVWD prior to the lawsuit.
Part 4 examined information about Clemetson’s $2.125 million loan for which VVWD issued an estoppel agreement in 2012.
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, and former water board members Sandra Ramaker and Robert ‘Bubba’ Smith.
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 is examining 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.