VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING VIRGIN VALLEY WATER DISTRICT OFFICE MARCH 18, 2008

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1 VIRGIN VALLEY WATER DISTRICT REGULAR BOARD MEETING VIRGIN VALLEY WATER DISTRICT OFFICE MARCH 18, 2008 Minutes of a Regular Board Meeting of the Virgin Valley Water District Board held on March 18, 2008, at the Virgin Valley Water District Office at 3:00 p.m. Attending were President John Paul, Secretary-Treasurer Cecil Leavitt and Board Members Ted Miller and Robert Bubba Smith. Board member Kenyon Leavitt was not present. Also present were Michael Winters General Manager, George Benesch, District Counsel, Erik Beyer District Engineer, Michael (Boomer) Johnson Chief Hydrologist and Mary Johnson taking minutes and other interested parties of agenda items. President John Paul called the meeting to order at 3:04 p.m. Bubba Smith offered a Prayer and led the pledge. Public Comment There was no public comment at this time. Discussion: Board Comments Bubba stated that he supported John Paul s handout and asked Mike Winters about residential meters. CONSENT AGENDA: President of Board Comments John Paul had distributed a handout requesting staff to procure copies of materials published by the State Attorney General s Office and NRS. John s handout also stated that there has been no orientation process for incoming board members and urged that this be corrected. John Paul began by bringing everyone s attention to the minutes of March 4 th, item #8, where it currently reads Ted (Miller) asked George if he was satisfied that the District was in compliance with NRS for purchasing and George stated that he was. John would like the minutes to reflect a little bit expanded version. John would like the minutes to reflect that George was not only personally satisfied, but that he was rendering his legal opinion as legal counsel for the board. Further, in this same item #8, John would like it expanded where it currently reads Bubba stated that he had heard comments from other owners that they were not contacted and that property values were decreasing and felt the District was paying more for the property than what other properties have gone for in that area. John would like it to include that at that point we referred to the appraisal of the property that we had to consider and asked the General Manager if he had looked at that appraisal and was satisfied that the appraisal for that property was a good one for us to do with what we wanted to do with that property. Bubba also mentioned that within item #2 of the minutes for the workshop that this was held at 1:00 and that there was also an item on this agenda to hold a budget workshop at 1:00. He stated that he would be able to attend this workshop, but that meetings held early in the day may be hard for board members or the public to attend and we may want to look at holding special meetings at a different time.

2 Minutes of a Regular Board Meeting March 18, 2008 Page 2 Bubba Smith made a motion to approve the consent agenda as listed below with the changes to the minutes as John Paul requested. Ted Miller seconded this motion and it was unanimously carried Discussion & Possible Action - Approve Agenda 2. Discussion & Possible Action Approve Minutes from 03/04/08 Work Shop Meeting and Regular Board Meeting In the Regular Meeting Minutes, Item #8 expanded to reflect that George was not only personally satisfied, but that he was rendering his legal opinion as legal counsel for the board. Also within item #8, expanded to reflect it to include that at that point we referred to the appraisal of the property that we had to consider and asked the General Manager if he had looked at that appraisal and was satisfied that the appraisal for that property was a good one for us to do with what we wanted to do with that property. 3. Discussion & Possible Action Approve Bills Paid - $232, Discussion & Possible Action Approve Purchase Orders Over $2,500 a. 101 Pipe & Casing - $211, Equipment for Well #34 ** End of Consent Agenda** 5. Discussion & Possible Action Nominate a Member of the Board as Vice-President of the Board of Directors of the Virgin Valley Water District This item was put on the agenda as suggested by legal counsel at the last board meeting to be in compliance with the District By-Laws. John Paul stated that he would like to comment on this agenda item, stating that he finds it is too narrow and too restrictive an agenda item and that he has noticed this on other agenda items as well. He believes that it should have been expanded to include amending the by-laws. John feels that the agenda items should include foreseeable aspects. There was further discussion regarding the open meeting laws and comments of disagreement with John s statement were made by board members and staff. Ted Miller made a motion to nominate Kenyon Leavitt as Vice-President of the Board of Directors of the Virgin Valley Water District. Bubba Smith seconded this motion and it was unanimously carried Discussion & Possible Action Authorize the General Manager to Sign Agreement Between SNWA and VVWD for Exchanging Surface Water Rights Associated with the Virgin River and Assigning the Remaining Portion of the 1989 Priority Ground Water Applications in the Lower Virgin River Basin to the VVWD

3 Minutes of a Regular Board Meeting April 3, 2007 Page 3 Mike explained that the District had previously entered into an agreement on April 18, 2000 with the SNWA regarding acquisition and use of Virgin River within the lower Virgin River Hydrographic Basin, Basin 222. This agreement allowed SNWA to purchase surface water rights from the Virgin River with a priority date of pre In exchange for SNWA acquisition of the water, VVWD received 50 percent joint ownership of the SNWA ground water applications in the basin and for every acre-foot of pre-1929 water right obtained by SNWA; VVWD received 1 acrefoot of 1989 priority water held by SNWA. This new agreement addresses recent operational changes on the Colorado River associated with the Record of Decision on Interim Guidelines signed in December of 2007 by the Secretary of Interior. This new agreement between SNWA and VVWD removes the previously established cap of 5,000 acre-feet for SNWA to purchase pre-1929 surface water and allows export out of the lower Virgin River basin under guidelines established under recent ICS forbearance agreements and tributary augmentation to the Colorado River as agreed upon by the seven Colorado River basin states; assigns title for 5,000 acre-feet seasonal diversion of 1989 priority water issued to SNWA to VVWD; SNWA assign the remaining portion of the undivided half interest in the 1989 ground water applications in the lower Virgin River basin to VVWD; assigns title to 1,200 acre-feet annually of surface water under Permit No with a 1990 priority acquired by SNWA to VVWD; and VVWD transfers the 89 shares of Bunkerville Irrigation Company shares held by VVWD to SNWA. This agreement augments the surface water by 1,290 acre-feet of 1989 priority with a seasonal diversion and 1,200 acre-feet annual diversion with a 1990 priority. This brings the total amount of surface water held by VVWD up to 8,650 acre-feet. Additionally, VVWD acquires the senior ground water application in their entirety with a priority date of This equates to a potential estimated volume of 62,000 acre-feet. VVWD gives up approximately 890 acre-feet of Virgin River water to SNWA. There was a very lengthy discussion with comments from the board and questions from the board being answered by John Entsminger, SNWA Legal Counsel, Michael Johnson and Mike Winters. Cecil Leavitt made a motion to authorize the General Manager to sign agreement between SNWA and VVWD for exchanging surface water rights associated with the Virgin River and assigning the remaining portion of the 1989 Priority Ground Water Applications in the Lower Virgin River Basin to the VVWD. Ted Miller seconded this motion. Bubba had a question regarding the SNWA not having their board meeting yet and approving this inter-local agreement and the Lonetti agreement not approved yet. George Benesch stated that we could amend the motion contingent upon their (SNWA) approval and Michael Johnson stated that Mr. Lonetti had come in and signed the necessary paperwork. Cecil Leavitt amended his motion contingent upon the SNWA approving the agreement. Ted Miller seconded the amended motion and it was unanimously carried. 4-0 Minutes of a Regular Board Meeting

4 March 18, 2008 Page 4 7. Discussion & Possible Action Consideration to Approve Staff to Develop an Administration Policies & Procedure Manual John Paul began by stating that he thought this item was a little narrow. Cecil stated that this item was placed on the agenda because the board had so heavily discussed it previously and needed it approved so staff could move forward. Cecil Leavitt made a motion to approve staff to develop an Administration Policies & Procedure Manual. Ted Miller seconded this motion. John Paul stated that we would not accept this motion until the board heard very diverse input from other people and if there are possibly any safeguards here in this particular matter; what do they do with it after approval; do they implement it or bring it back for board approval? George Benesch stated that he was going to recommend to whoever made a motion that staff work on it and then bring it back to the board for approval. Cecil stated that the agenda item states just that staff develop and then board will look at and decide whether they want this or that and go from there. It is not to approve the manual, just to develop. Mike Winters stated that the manual would probably come back two or three times before it was finalized. Ted Miller made a motion to approve staff to develop an Administration Policies & Procedure Manual. Cecil Leavitt seconded this motion and it was unanimously carried Discussion & Possible Action Consideration to Approve a Date and Time for a Budget Work Session for the Budget There was some discussion as to how the VVWD budget process works and that we only do water and it is mostly O&M. Mike had suggested that the budget work shop be held a couple hours before our board meeting on April 15 th at 1:00. Bubba Smith made a motion to schedule the VVWD budget work session for April 15 th, 2008 at 1:00 p.m. Cecil Leavitt seconded this motion and it was carried unanimously General Manager s Report Mike had included a written report stating that he had presented an update to the Public Lands Committee as to the activities associated with the VVWD and had also included a copy of this report in each of the board members packets, which was further discussed. Mike has signed the necessary paperwork to acquire the property for the new arsenic treatment plant on Hardy Way and Mayan Circle and thought that we would close on this property by the end of this week. Mike further had written in his report that the District was working on an agreement with the City regarding the radio tower and he had met with Michelle Stamates last week to discuss the possibility of getting one or two million dollars from the state to help with the arsenic project. Mike Chandler had also included Monthly Project Report No. 4 regarding the Arsenic Minutes of a Regular Board Meeting March 18, 2008

5 Page 5 Removal Project and answered questions from the board and also informed the board that these reports were also forwarded to NDEP, EPA and ACOE. Mike Chandler also informed the board that he had taken State Regulators and people from the State level around the District s well sites and the arsenic treatment sites and reported that they were very impressed and that they were very complimentary of the District and staff. 10. Hydrologist s Report Michael had not included a written report but informed the board that the NWRA Conference had been completed and that he has been working on the agreement with the SNWA that was approved earlier. Boomer also stated that he was also working on Tule Desert issues. 11. Engineer s Report Erik had included a written report and stated that the 24 Corrosion Control project should be finished by the end of the week and that they have been testing the cathodic protection and had found no problems thus far. Erik also stated that we need to inspect the freeway tank painting on the inside since the warranty will expire in July. Erik stated that he is looking into having the inspection done by divers in lieu of draining the tank this time of year. Erik also telephoned the Viega Pipe Company in Kansas City with regards to progress being made on the testing of the polyethylene pipe, but was unable to receive an answer. 12. Public Comment Karl Gustaveson and Barbara Ellestad commented on water breaks in the HOA s in which they live and the letter the VVWD received from an attorney regarding Highland Hills Subdivision. 13. Adjournment President John Paul adjourned the meeting at 5:19 p.m. (NOTE): The minutes of this meeting have been tape-recorded and will remain on file in the District office for a one-year period for public examination.