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Nevada Today

Nevada Today is a nonpartisan, independently owned and operated site dedicated to providing up-to-date news and smart analysis on the issues that impact Nevada's communities and businesses.

Southern Nevada Water Authority (SNWA)Virgin Valley Water Board (VVWB)

Who Does the VVWD Serve? (Part 2 of 2)

Part 2.  Who Got Overpaid … and Who Paid the Price?

With the background discussed in yesterday’s column HERE, let’s now look at what the Virgin Valley Water District (VVWD) has been doing with ratepayer money (and debt) over the past decade or so. Yesterday we learned  that the dirty, filthy river water that VWD owns or has purchased has historically been leased to farms, ranches and businesses in its Virgin Valley Service Area, including golf courses. The historic lease price has been around $250 per share per year. If a user didn’t want to pay a lease every year they could purchase shares outright for historic prices between $3,000 per share in 1993 up to about $8,000 per share in 1997. That’s a pretty hefty increase of about 250% over 4 years. But “you ain’t seen nothin’ yet.”

Who Have Been the Winners and Losers From VVWD Activities? Before we get “into the weeds” on the price increases and identify the winners and losers in the later following years, let’s try to understand who these holders of Water Shares in the BIC (Bunkerville Irrigation Company) and the MIC (Mesquite Irrigation Company) are. Are they hard-working farmers, ranchers and sod-busters toiling to try to eek out a living from the land? That’s what most would like you to believe, but the truth is that a lot of them were simply lucky enough to be born into the Mormon Founding Families of the area generations after the actual hard-working farmers and ranchers risked life and limb to try to settle and survive in the harsh desert climate of the Virgin Valley in the 1800’s. You know the family names. One well known man would have you think he is just an old “awe-shucks, plain-talking” kinda country boy, but he received over $2,000,000 in a one year period for some of his inherited water shares, bankrupted a major business in the area and went on to serve as an elected official. Another water millionaire wears a cowboy hat and sometimes drives a tractor in local parades, but his family makes a lot of their income leasing millions of dollars worth of inherited property under several of the big businesses in town, and his family receives over a million dollars a year leasing water rights, primarily to Las Vegas users. Making a lot of money by leasing assets that you inherited isn’t really hard work.

The Skyrocketing Price for Irrigation Shares. In 1993 the VVWD Board members with last names Lee, Hardy, Bowler, Leavitt and Reber approved the VVWD to purchase more water, including irrigation water. Why would they want to spend good money on water that was simply not potable or suited for the growing potable water needs of the Service Area? You would have to ask them, but maybe the following events and timelines will give a hint.

As discussed, from 1993 to 1997 the price for irrigation water shares in the Virgin Valley increased from $3,000 to $8,000, a hefty increase for sure, with the VVWD purchasing being the primary driving factor. Farming and ranching have not been booming industries in the area for a long time and certainly were not driving these dramatic increases for dirty irrigation water. So was that the end of the VVWD buying spree? Not by a long shot. Further purchases drove the price they were paying in 2005 up to the $22,800 – $31,500 range. At that price “somebody” was making a pretty nice haul for selling what was, for many of them, near useless water inherited from prior generations. And a lot of the sellers had names that were the same as, or related to family names that were shared with members of the VVWD Board during those times. Very Curious? But sellers that received $30,000 didn’t make anywhere near the enormous profit as did people named Hardy, Magoon, Leavitt, Reber et al, some of whom sold this “non-potable water” for over $80,000 per share in the 2008 – 2010 period during which the VVWD paid out over $9,000,000 to buy water that every study had shown was unsuitable for use by the growing population of users in the Virgin valley. In all the cases cited above the VVWD was the buyer, and they were using borrowed money to pay, thus deeply indebting the district and all future water users in the VVWD Service Area.

VVWD Founding Charter and Purpose. Farming and ranching activities in the VVWD Service Area have been dwindling for decades as urbanization has set in. That historic $250 per share IS the Market Value of river/ditch water in the VVWD Service Area. At VVWD board meetings local water lessors, primarily some of the few actual ranchers and farmers left, said that they WOULD NOT and COULD NOT rent this surface water at the increased prices VVWD was proposing. They indicate that it is just not economically feasible to pay such inflated prices and that they would cease farming some lands if the water price increased.

Virgin Valley Water Board from left to right Kevin Brown, manager Bo Bingham, attorney and Rich Bowler, Board Member at the Virgin Valley Water District Board Meeting: September 2018 Photo by Andrew Davey

In a simple end-analysis, the VVWD is failing local businesses while it tries to make more money serving Las Vegas customers while also jacking-up the manipulated value of irrigation water to the benefit of the elite inter-related group of private owners who make up the vast majority of private owners of these shares. The reason for the founding and the chartered purpose of the VVWD is to “provide its water resources to people and businesses within its Service Area.” There is nothing in the VVWD charter about acquiring water shares at exorbitant, artificially inflated prices to lease for use by individuals or businesses outside of their prescribed Service Area.

Perhaps the discovery phase of the current litigation by a VVWD water user who seems to have “simply had enough” will expose the history of the price manipulation and the people who orchestrated it.

Who Has The VVWD Served?  It seems pretty clear.

 Click here for Part 1.  Determining the  Fair Market Value of VVWD Irrigation Water.

 

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