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On The Water FrontSouthern Nevada Water Authority (SNWA)Virgin RiverVirgin River Water DistrictVirgin Valley Water Board (VVWB)

Water Boards Use Public Dollars To Accelerate Water Share Values

Mesquite, NV. The following Virgin Valley Water Board (VVWB) members are using public funds to pay attorneys from Bingham, Snow, and Caldwell to continue their practice of putting millions of public dollars in the pockets of a few to not use publicly owned Virgin River irrigation water originally allocated to early pioneers in 1927.

Virgin District Water Board Members.

I want that statement to sink in. Millions of public dollars to not use public water for which it was originally allocated. And they want those public payments to continue in  perpetuity. Let’s look at their decision tree to better understand how this was scam originated and is currently accommodated.

In 1992 Mesquite Irrigation Company (MIC) and the Bunkerville Irrigation Company (BIC) river water shareholders John Lee, Cresent Hardy, J.L. Bowler, (father to board member Richard Bowler) Todd Leavitt and Sam Reber sat as the board for the Mesquite Farmstead Water association. In 1993 that association was merged into the newly formed Virgin Valley Water District (VVWD). They became the first board members. Later the Bunkerville Water Users Association merged into the Virgin Valley Water District (VVWD).

The VVWD was formed to develop underground water for potable use by the communities of Mesquite and Bunkerville. Nonetheless, those five river water shareholders began a 17-year process which culminated in the “gifting” [[i]] of public money to other Virgin River water shareholders.

Keep in mind that the average off-Farm Surface Water ranging from $7.20 per Acre Foot Years (AFA) in 2008 $13.60 per AFA[ii] in 2013. At $13.06 per AFA. The share price would be $123.22 for 9.06 AFA per share and $97.65 at 7.18 AFA per share.[iii]

By 2010, the water board, dominated by shareholders gifted $12,159,670.86 to MIC and BIC shareholders for 551 shares (4,992 Acre Feet Annually (AFA)). By 2010 the median value of river water shares was at $8,287.00 per share.  [[iv]] [[v]]

Take a moment to read the complete list of board members, and amounts paid to shareholders below.

The board, and their attorney argue that this river water was acquired as a backup for a future date when river water would be needed for potable use. However, it would cost many millions to convert polluted river water into potable water. At best the process would yield 1/2 (2,496 AFA) of the  4,992 AFA of river water purchased. One well costing about $1 million would yield that amount of potable underground water.

Pricing a water share at a median value of $8,287.00 [[vi]] presented a another problem for the water boards. There remained a few farmers, and some golf courses who needed irrigation water and presenting those prices to them would meet with extensive opposition and shine a light on what they were doing. Therefore, they set the value at $250 a share.

In 2005 a new “market” became available when the Dixie and Anne Leavitt Foundation sold 350 BIC shares on the Virgin River to the Southern Nevada Water Authority (SNWA) for $11,686,500.00 ($33,390.00 per share).

In 2007, The Department of Interior: Bureau of Reclamation (BoR) established guidelines allowing the SNWA to acquire “unused” river water from the Virgin and Muddy Rivers and Coyote Springs under the federal Intentionally Created Surplus (ICS) program. [[vii]] Simply put the ICS program allows those holding Virgin and Muddy River and Coyote Sprint irrigation water shares to fallow their land and let that water freely flow into Lake Mead. [viii]  The legal issues associated with this program are well document in Nevada-today and summarized here .

Between 2011-2014 SNWA agreed to lease BIC shares at $1,816.00 and MIC shares for $1,620. That was a “bargain” considering that the VVWB between 1992-2010 had established a median “market” price t $8,287. The current SNWA lease rate is $1,246 for MIC shares and $1,512.50 for BIC shares. [[ix]]

Between 2005 and August the SNWA has gifted $57,998,817.99 from their public funds to holders of appropriated water in MIC and BIC.

Total SNWA payments to BIC and MIC shareholders 2005-2019
BIC total $41,253,068.90
MIC total $16,745,749.09
Grant total $57,998,817.99
Consider reading the complete list of SNWA payments to MIC and BIC shareholders below.

In total MIC and BIC, shareholders have taken $70,158,488.85 in public funds from the local water district and the SNWA for not using river water appropriated in 1927 to original pioneers to irrigate the arid land around Mesquite and Bunkerville.

Total SNWA and VVWB payments to BIC and MIC shareholders
SNWA to date $57,998,817.99
VVWB payments (1993-2010) $12,159,670.86
Total $70,158,488.85

These practices may have remained below the public radar had not the water board decided to ask local irrigation rate payers to raise their rates from $250.00 per share to the amount they receive from SNWA. Further, they argued, incorrectly, that the SNWA rate was the “market value”. Their own decisions suggest otherwise.

In 2018 the owners of Wolf Creek filed suit to contest increasing the market rate from $250 per share to $1,246 [i] (now $1,115.67) for a MIC share. That caused the board to task their attorney Jedediah (Bo) Bingham, of Bingham, Snow and Caldwell, to counter the action thereby protecting their historical and future ability to continue using public money to advance the interests of Virgin River water shareholders in perpetuity.

So its not the public interest that the VVWB is trying to protect with their legally questionable defense that they can arbitrarily and capriciously set water rates at whatever value they wish. No, its not the public. It is the ability to “gift” public dollars to a small population of river water shareholders who agree to not use the majority of their publicly appropriated water for its intended purpose in return for cash payments from the public purse.

Please read: VVWD payments to MIC and BIC shareholders. Continue to bottom to advance to next page.
VVWB MIC and BIC purchases 1992-2010
please read: SNWA payments to MIC and BIC shareholders. Continue to bottom to advance to next page.
SNWA payments to MIC and BIC

Endnotes:

[i] Article 8 section 9 of Nevada’s constitution prohibits the gifting or loaning of public money to certain corporations.  And Section 10 of the Constitution prohibits the loaning of public money to or ownership of stock in certain corporations by county or municipal corporations.

[ii] U.S. Department of agriculture at: https: //www.ers.usdagov/weddocs>Set 3. Average irrigation statistics (by water source).

[iii] The amount of water in a share when they were first obtained under a 1927 court order was 9.06 Acre Feet of water annually per share. The share was later changed to 7.18 AFA per share.

[iv] McGreer, Michael M. “VVWB Irrigation Water Pricing 2018 (1 of 5),” at:  https://nevada-today.com/news-information/vvwb-pricing-2018-1-of-5

[v] The median is used as a measure of the average value when the data include exceptionally high or low values because these have little influence on the outcome.

[vi] The average of off-Farm Surface Water ranging from $7.20 per Acre Foot Years (AFY) in 2008 $13.60 per Acre Foot Annually (AFA) in 2013. At $13.06 per AFA the share price would be $123.22 for 9.06 AFA per share and $97.65 at 7.18 AFA per share

[vii] 2007 Secretary of Interior adopts Interim Guidelines for Lower Basin Shortages and Coordinated  Operations for Lake Powell and Lake Mead

[viii] Once acquired the SNWA takes a mathematically determined credit that enables them to take higher quality potable water for use by their customers in the Las Vegas Metropolitan area.

[ix] MIC and BIC shares differ in rates because of availability and appropriation dates.

About Author

Dr. Michael Manford McGreer is managing editor of Nevada-today.com and writes on issues that impact public policy.

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