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On the Water Front: Why the Wolf Creek Lawsuit Matters, and How This Suit Reaches Far Beyond Mesquite

Earlier today, my colleague Mike McGreer thoroughly reviewed the documents filed by Wolf Creek Golf Club’s attorneys last week. Since there’s a whole lot in these documents, from the explosive allegation of Virgin Valley Water District (VVWD) running a price fixing scheme to the head-scratching questions surrounding VVWD’s relationship with Southern Nevada Water Authority (SNWA) and the Colorado River Compact, I figured we could all take a closer look at what’s happening in this suit.

And really, we also need to step back and look at the bigger picture of how one rural water district’s push to charge higher rates, and one golf course’s determination to push back, affects the future of Las Vegas’ water resources and seven states’ management of the Colorado River.

First, let’s see how and why SNWA is involved in this case.
Photo by Andrew Davey

When the Colorado River Compact was first developed in 1922, Nevada’s population was just under 80,000. By 2007 our population had grown thirty-fold, and now we appear to be crossing the 3,000,000 population threshold. Nevada is once again the fastest growing state in the nation, and just over 70% of our state’s population resides in the Las Vegas Valley.

Back in December 2007, Nevada and the six other Colorado River Basin states signed an agreement they hoped would adapt Colorado River water management to the increasingly dry and urban reality of the 21st century American West. Included in that 2007 agreement is a provision that allows for SNWA to utilize an intentionally created surplus (ICS) where SNWA directs excess groundwater and surface water into Lake Mead in exchange for water credits that can be “cashed in” for future development and use.

Photo by Andrew Davey

One key provision in SNWA’s ICS program is the option to use up to 50,000 acre-feet of Virgin and Muddy River water that’s included in SNWA’s water resource plan. That 2007 agreement was presented and signed at the Colorado River Water Users’ Association (CRWUA) conference, and last December SNWA General Manager John Entsminger cited past agreements and the (then developing, now signed into law) drought contingency plan (DCP) at CRWUA as he reassured his fellow Nevadans that we’ll have enough water to stay hydrated well into the future.

But what happens if there’s not as much Virgin River water available for SNWA’s use as the 2007 agreement and SNWA’s current water resource plan envision there is? This brings us to Mesquite, and this brings us back to the ongoing courtroom drama between VVWD and Wolf Creek.

Here’s where Wolf Creek and VVWD come in.
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 an August 9, 2018, letter to VVWD General Manager Kevin Brown, SNWA Water Resources Director Colby Pellegrino wrote, “SNWA and VVWD have for some time been discussing VVWD’s effort to obtain benefit from the unused water at the golf courses. SNWA has consistently maintained that accounting impediments and Virgin River Decree issues would prevent SNWA from leasing these shares VVWD believes are unused and available for lease.” Pellegrino then requested that VVWD agree to amend their 2014 lease agreement so that SNWA can use VVWD’s unused Mesquite Irrigation Company (MIC) water shares rather than be locked into specifically using surplus water that the golf courses hand back to VVWD.

About six weeks after receiving this letter, Kevin Brown told us, “We feel that we have a resource that Wolf Creek has benefitted from over the past eight years by paying a subprime amount of lease for. Those shares are worth more money now. They should pay more for these shares, just as the rest of the stakeholders are.”

Photo by Andrew Davey

At the heart of Wolf Creek’s lawsuit against VVWD is the question of what’s the real “market rate” of Virgin River water. Brown and other VVWD officials have claimed their 2014 agreement with SNWA sets a new, higher “market rate” that golf courses must match. Wolf Creek obviously disputes this. And when we spoke with former VVWD Board Member (and now Mesquite City Council Member) Sandra Ramaker last September, she explained the original intent of VVWD’s lease program: “We weren’t trying to send [water] somewhere else. We were trying to keep [water] here.”

Last September, we were under the impression that VVWD’s lease agreement with SNWA was fully operational. This August 2018 letter suggests that’s not the case, and this requires us to ask: If SNWA can’t use all the water VVWD supplies under this lease, then how much of the 50,000 acre-feet of Virgin and Muddy River water is truly available for SNWA use?

But wait, what about the public and our trust?
Photo by Andrew Davey

Last September, we took a closer look at the public trust doctrine: the principle that natural resources, such as water, are public resources that must be preserved and managed for the public benefit. This appears so simple at first glance, yet its actual meaning will soon be decided by the Nevada Supreme Court thanks to the Ninth Circuit Federal Court of Appeals sending the Mineral County v. Lyon County lawsuit its way.

If the Nevada Supreme Court rules in Mineral County’s favor on Walker River allocation, this will essentially mean that state and municipal authorities must place the public’s water interests above “prior appropriations” of water to private entities. This may also trigger a legal “domino effect” in that VVWD currently pays MIC and BIC (as in, Bunkerville Irrigation Company) for Virgin River water that originates on federal public land and is meant to flow into a larger publicly managed body of water (as in, the Colorado River). At the same time SNWA has (at least on paper) an option to lease Virgin River water from VVWD to send to Lake Mead, and SNWA holds water rights at various basins in Eastern Nevada in the hopes of building a pipeline to divert that water to the Las Vegas Valley.

Photo by Andrew Davey

Both the Walker River lawsuit and the Wolf Creek lawsuit have huge implications for the future of water law in Nevada… And for that matter, the future of Las Vegas’ water resources. The Walker River lawsuit calls into question who truly “owns” public water resources, while the Wolf Creek lawsuit calls into question what truly constitutes “fair market value” for such public water resources. And now, we all must ask this crucial question: Do we truly know how much water we have, where our water is going, and who’s really benefiting from it?

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