“Our state’s comprehensive water statutes do not permit the reallocation of water rights already adjudicated and settled under the prior appropriation doctrine. In doing so, we reaffirm that the public trust doctrine applies in Nevada and clarify that the doctrine applies to all waters within the state, including those previously allocated under the prior appropriation,” Nevada Supreme Court Justices September 17, 2020.
1991 Southern Nevada Water Authority
In 1991 Southern Nevada was facing a water crisis. The region was growing, but its water supply was not keeping pace. On Valentine’s Day, Clark County Commissioner Bruce Bingham learned that the Las Vegas Valley Water District was out of Water. This shortfall meant the entire Las Vegas Valley was in danger of running out of Water.
Bingham knew that something had to be done to address the water crisis. He met with Pat Mulroy, the general manager of the Las Vegas Valley Water District, to discuss ways to cooperate on water conservation and resource management. Mulroy proposed the creation of a regional water authority, and Bingham agreed.
Thus the Southern Nevada Water Authority (SNWA) was formed in 1991 by a unanimous vote of the seven Water and wastewater agencies in the Las Vegas Valley. The SNWA’s mission is to ensure a reliable and sustainable water supply for Southern Nevada. And Mulroy was appointed the SNWA’s first general manager. Among other efforts, Mulroy led the SNWA to use private market comparisons to acquire new water rights while building new water projects and promoting water conservation.
1992 Colorado River Interim Guidelines
In 1992 Department of Interior Secretary Manuel Luján, Jr., among other duties, served as the Colorado River Water Master for the lower Basin. [1] Under Luján, Jr., the Bureau of Reclamation established the Colorado River Interim Guidelines (IRG) operating rules for the Colorado River to answer concerns about the long-term sustainability of the River.
And when the Department of Interior – and Bureau of Reclamation leaders joined with Mulroy’s Southern Nevada Water Authority (SNWA), they collectively established a water market where SNWA authorities set the market price based on their view of a competitive market value for the water as a commodity.
In theory, when treating Water as a commodity, the price of Water will reflect its actual value, which will encourage users to conserve water and use it more efficiently. But with the variety of federal government actors setting guidelines and SNWA administrators from Mulroy to current administrators establishing arbitrarily contrived water rates, what could go wrong?
[1] The Secretary of the Interior’s role as Water Master is codified in the Colorado River Compact, which was signed in 1922.
1993 Virgin Valley Water District
And in 1993, Nevada state senator R. Smith, (R, Clark 2) introduced Bill Draft Request (BDR-S.B. 50) to Create the Virgin Valley Water District (VVWD) as a political subdivision of this State to “adequately and efficiently provide water service for the economy and well-being of the residents of the Virgin Valley area.” The legislation passed with an overwhelming majority of both the House and Senate. U.S. House representative Dina Titus (D, NV.1), then a member of the State Senate (Clark 7), also voted in favor of establishing the district. However, Ann O’Connell, R Clark District 5, voted against forming the District. The District became a political subdivision on May 10, 1993.
When the Board first met on June 9, 1993, John Lee, Cresent Hardy, J.L. Bowler (1909-2004), Todd Leavitt, and Sam Reber, all stockholders in either MIC or BIC or both, assumed the role of the first Board of the Virgin Valley Water District (VVWDB) and immediately focused on establishing a price for Virgin River stocks held by MIC and BIC shareholders.
By the end of May 2010, board membership had included, at one time or another, Cecil Leavitt, Paul Jensen, Vinnie Leavitt, Harold Wittwer, Bill Tanner, Michael Waite, Charlene Hughes, Kathryn Leavitt, Kraig Hafen, Dave Bennett, Kenyon Leavitt, Paul, Miller, Robert (Bubba) Smith, Gustaveson, and Mark McEwen in groups of five between had acquired 551 stock shares for $12,159,670.86 (avg 22,068.37 per share). The prices ranged from a low of $900 for a MIC share to $72,000 for a BIC share by 2010. [i] Some 36.02 percent of that total came from bonds. [i] Response to a Records request by Michael Manford McGreer to the Virgin Valley Water District Board.
1994: Amended Colorado River Guidelines and SNWA takes Virgin River Water rights
In 1994 Bureau of Reclamation Commissioner Daniel Beard approved amending the 1992 Colorado River Guidelines to allow for water transfer between states and tribes in the Colorado River Basin. The guidelines were controversial, with some states and tribes objecting to what they saw as a federal infringement on their water rights. The US Bureau of Reclamation eventually withdrew the amendments and they were never implemented.
Nonetheless, in 1994, The SNWA obtained 113,000 AFY of Virgin River water rights. Under an agreement, the SNWA transferred 5,000 AFY to the Virgin Valley Water District.
1998: Mulroy drives water prices up
In 1998, Nevada U.S. Senators Richard Hudson Bryan and Harry Reid Legislation, and then-congressman John Ensign, supported a move by the U.S. Department of the Interior to sell tens of thousands of acres of federal land to private developers, to expand the Las Vegas Valley.
Mulroy participated in developing the Southern Nevada Public Land Management Act of 1998 and, as part of the negotiations, asked that the SNWA receive 10 percent of the revenue from each lot sold to add staff and infrastructure. The Water Authority’s haul from selling federal lands eventually reached almost $300 million. It helped bolster financing for the pipelines, tunnels, pumps, and more that Las Vegas eventually built to double its capacity to move water out of the Colorado River. And the legislation allowed Mulroy to pay as much as $32 million for properties that previously sold for no more than a few hundred thousand dollars. With the land came the right to tap vast aquifers underneath it. The Southern Nevada Water Authority would eventually become one of the state’s largest owners of ranch land. [i]
Along the rivers in 1998, Mulroy, for the SNWA, was negotiating with Coyote Springs Investment LLC, owned by Reno developer David Loeb and Nevada gaming lobbyist Harvey Whittemore to acquire 7,500 acre-feet of the 16,443 Acre Feet Annually of groundwater in the Coyote Springs Valley [1]. Mulroy’s take of 7,500 constituted 94 percent of the Valley’s 8,000-acre feet refresh (perennial yield). She set surface water pricing when she said it would be ideal if the water authority could draw the Coyote Springs water down the Muddy River. Otherwise, it will cost another $25 million to build a pipeline to the Las Vegas Valley. She said the water sale is a good deal for Las Vegas, noting the $3,000 per acre-foot price tag was cheap. Some Southern California and Arizona areas pay up to $15,000 per acre-foot. Reno pays $5,500 for groundwater, while SNWA only pays $3,000 per foot.
[1] Coyote Springs Valley includes basins 206,210,216,217,218,219, and portions of 215.
[i] ProPubica, “Killing Colorado, Pat Mulroy, Las Vegas Water Witch at: https://www.propublica.org/article/killing-colorado-pat-mulroy-las-vegas-water-witch
2000: Muddy River Holdings
Then on January 7, 2000, Gregory J. Walch, SNWA general counsel, established the Muddy River Water Holding as a domestic nonprofit corporation with John J. Entsminder, SNWA General Manager as President, and David J. Johnson, SNWA Deputy General Manager, Operations as treasurer and director and Colby Pellegrino, SNWA Deputy General Manager, Resources as Secretry-Director.
2007 Tributary Conservation ICS
On December 13, 2007, Secretary of the Department of Interior (DOI) Dirk Kempthorne signed a Record of Decision [1] adopting the 2007 Colorado River Interim Guidelines for Lower Basin Shortages and the Coordinated Operations for Lake Powell and Lake Mead. And the Guidelines establish criteria for developing and delivering Intentionally Created Surplus (ICS) and a Tributary Conservation ICS as a theoretical way to avoid Lower Basin shortages and benefit Lake Mead and Lake Powell.
According to Brenda W. Burman, The Commissioner for the Bureau of Reclamation (2017-2021), the 2007 guidelines had two significant impacts. First, it reduced the likelihood of litigation between or among the Basin States. Second, she said, it replaced the interim nature of past federal guidelines with operational rules over a more extended period. Extending the time frame allowed those concerned to eliminate the need for permanent or perpetual agreements. Further, the extension provided the opportunity to gain valuable operating experience in a system with highly variable supplies and many emerging challenges.
Under the Department of Interior – Bureau of Reclamation ICS contract guidelines, in return for cash, Virgin River stockholders of MIC or BIC stocks sign a “Forbearance Agreement with the SNWA [2]; the Nevada Water Engineer, and the Colorado River Commission of Nevada (CRCN), as authorized under N.R.S. § 538.161, attest that they have followed their land and allow their historical irrigation shares of to flow freely into Lake Mead (through the Overton inlet). After paying for the river water stock shares, SNWA takes a credit that allows them to add more Colorado River main flow water (not 1927 decreed Water) to serve their growing Las Vegas Metropolitan community.
And that year, the SNWA agreed to suspend the planned development of 5,000 Acre Feet Annually (AFA) Virgin River surface water rights in exchange for an agreement with the other Colorado River Basin States to cooperatively pursue the development of 75,000 AFY of permanent water supplies to augment Lake Mead. Instead of developing the 5,000 AFA of Virgin River Water, under the 2007 agreement, it is cheaper to pay cash to MIC and BIC shareholders (Including the VVWDB) to allow “unused” water to flow into Lake Mead.
The intent of the authors of the ICS program assumes that once stockholders no longer irrigate their land, some mathematical amount of Virgin and Muddy River water will be free to flow into Lake Mead through the Overton (minus an amount for evapotranspiration). [3] And under the forbearance agreement, river water stockholders must declare and show, through remote sensing, that the fallowed land currently is, or historically was, and otherwise would have been irrigated in the next Year.
Colby Pellegrino, Deputy General Resources Manager for the Southern Nevada Water Authority (SNWA), explained the ICS as like a bank account stored in Lake Mead, from which take out of that account and delivered there. Still, she says you must deposit something to Lake Mead, and the 2007 record of decision [4] allows for taking Water from the Virgin River for ICS credit. To create an ICS, the Virgin River decree appropriation holder must have delivery and forbearance agreements that Water is available before June 21, 1999, and have control of Water and remains “unused.”
Following up on VVWDB Board instructions given in 2005, in February 2007, VVWDB Hydrologist Michael Johnson met with John Entsminger, General Manager for Southern Nevada Water Authority. [iv] He spoke with Entsminger about two Virgin River surface water permits that Lonetti, Jr. had for sale, one for 1,062.26 AFA with a priority date of August 17, 1914,[5] and another (Permit 85504) for 1,200 AFA with a priority date of 1990. He asked Entsminger for SNWA to purchase those shares from Lonetti, after which the VVWDB would trade 890 acre-feet of Waterr they acquired from BIC with an earlier priority date for SNWA’s 1,200 AFA they purchased from Lonetti.
[1] The Secretary of the Interior, Washington, DC, Record of Decision, Colorado River Interim Guidelines for Lower Basin Shortages, and the Coordinated Operations for Lake Powell and Lake Mead, December 2007 at: https://www.usbr.gov/lc/region/programs/strategies/RecordofDecision.pdf
[2] 277.120. SNWA is authorized by N.R.S. § 538.186 to enter into this Forbearance Agreement and, pursuant to its contract issued under Section 5 of the Boulder Canyon Project.
[3] The process by which water is transferred from the land to the atmosphere by evaporation from the soil and other surfaces and by transpiration from plants.
[4] The agreement was updated in 2016.
[5] The 1914 priority date better fit with ICS requirements.
2008 The Great SNWA giveaway
In 2008, the average cost of Nevada river irrigation water was $7.20 per Acre Foot Annually (AFA) [1] or $51.69 per share. In 2013 Off-Farm irrigation water prices equated to $13.60 ($97.65 per share) in Nevada, $29.43 ($211.30 per share) in Arizona, and $45.59 ($ 327.32 per share) in California.[2], [3]
On April 17, 2008, the SNWA, under Mulroy and governed by Board members Shari Buck, Chair, Rory Reid, Vice Chair, Andrea Anderson, Chip Maxfield, Lois Tarkanian, and Steven Kirk, voted to set aside $40 million in public funds to acquire publically owned but appropriated river water stocks from the Muddy and the Virgin River shareholders as part of the ICS project
Under the veneer of the ICS Doctrin, the SNWA paid Lonetti $8,416,506.00 for his two permits. They traded the 1,200 AF permit to VVWDB for 890 acre-feet of water the VVWDB acquired from BIC with an earlier priority date, which became a credit under the ICS contract because of its early prior date. In the agreement, the VVWDB also received access to 5,000 AFA of downriver water previously acquired by SNWA.
[1] Average Purchased Water Cost ($ Per Acre-Foot) for Farms Using Off-Farm Surface Water, by Farm Size and State, for 2008 Irrigated Farms at: https://goo.gl/DFpzUR
[2] U.S Department of Agriculture, Farm, and Ranch Irrigation Survey at: https://goo.gl/jzQHLN
[3] Virgin River stocks at 7.18 acre-feet per share.
2009 Nevada Governor sings ICS beneficial use legislation
Then on May 22, 2009, Nevada Republicans Governor (2007-2011) James Arthur Gibbons (1944-) signed an amendment to NRS 534.080 allowing the use of Virgin and Muddy River water under the ICS beneficially.
2014 Mulroy Retires. Entsminger takes her place
In February 2014, Mulroy retired and nominated as her successor her senior deputy general manager, John Entsminger, a lawyer experienced with interstate Colorado River negotiations and a supporter of Mulroy’s water management strategy.
On July 30, 2014, the U.S. Bureau of Reclamation (Reclamation) and four municipal entities, Central Arizona Water Conservation District, the Metropolitan Water District of Southern California, Denver Water, and Southern Nevada Water Authority (SNWA), agreed to a Pilot Program to fund the creation of Colorado River system water through voluntary water conservation and reductions in use. The Pilot Program funds projects that retain Water in Lakes Powell and Mead through temporary, voluntary, and compensated conservation mechanisms.
In 2014 the Sacramento Valley water districts shipped some of their Water south at $500 an acre-foot. For this article, a share is considered to include 7.18 acre-feet of Water.[1] Therefore, the BoR offer would compute to (7.18*$150) = $1,077 for 7.18 Acre feet of Lake Mead Water or (7.18*$500)= $3,590 for Sacramento Valley Water.
And in 2014, the Department of Interior (DoI) and Bureau of Reclamation (BoR) offered to pay SNWA $150 per Ace Feet [2]Annually (AFA) to conserve 15,000 AFA of Water they stored in Lake Meade instead of using Surplus Credits.
[1] A share of Virgin River water varies. The amended Virgin River Decree puts a share at 9.05 AFA. However, Mesquite Irrigation Company (MIC) President Kelby Hughes puts a MIC share a BIC share is considered to have more Water per share, possibly 7.8 acre-feet.
[2] An acre-foot contains 325,851 gallons. According to the Environmental Protection Agency, the average family of four uses about 400 gallons of Water daily, or 146,000 gallons per Year.
2015 Lake Meade Evaporated. SNWA sets Virgin River Water rates
In 2015, about 30 percent of the Water in Lake Mead evaporated. To reduce the impact of evaporation in a September 17, 2015, agreement, SNWA received $45 million from California authorities to send 150,000 AFA ($300 per AFA, $2,154 per share) of Lake Mead water to California. That deal set the Lake Mead water value at $300 per Acre Feet Annually (AFA). And Sacramento Valley water went to $700 per acre-foot ($5,026 per acre-foot) [1]
In the meantime, SNWA had settled on $1,246 per share ($174 per acre-foot) for an “unused” share of MIC or Bunkerville Irrigation Company (BIC) Water from “fallowed” land allowed to flow into Lake Mead,
[i] Kasler, Dale, ” As the drought worsens, L.A.water agency offers cash to Sacramento Valley farmers, at: http://www.sacbee.com/news/state/california/water-and-drought/article13908632.html
On October 17, 2016, SNWA under Entsminger entered into a System Conservation Implementation Agreement (SCIA) as part of the 2014 Pilot Program. Under Phase II of the Pilot Program with Reclamation to conserve up to 860 Acre Feet Yearly (AFY) of post-1928 Boulder Canyon Project Act (BCPA) [1]Virgin River surface-water rights that SNWA controlled in the Bunkerville Irrigation Company (BIC) was part of the Intentionally Created Surplus Doctrine of 2017.
Under the 1927 Virgin River Decree, pre-BCPA water rights reached 17,785.5 AFY for shareholders of the Bunkerville and Mesquite Irrigation companies that Entsminger intended to purchase through contract agreements requiring the holder to fallow their lands and allow Virgin River water to flow into Lake Mead.
[1] Section 5 of the BCPA requires entities wishing to divert Colorado River water within the states of Arizona, California, and Nevada to have a contract with the Secretary of the Interior for that Water.
2017 Virgin and Muddy Rivers Beneficial Use and Conjunctive study legislation
On June 1, the Nevada legislature declared that the Intentionally Created Surplus Doctrine (ICS) allows the reallocation of Virgin and Muddy River water to Lake Mead as ICS is declared a beneficial use under Nevada Revised Statutes 533.030(2).
On June 9, 2017, Nevada Governor Brian Sandoval, R, signed Senate Bill 47 (NRS 533.024), requiring the State Water Engineer to prepare a “water budget” for Groundwater. And the Engineer must manage water resources “conjunctively-All sources.”
2018 Consumptive Use and Intentionally Created Surplus Rate lawsuit
On January 30, 2018, during a Nevada Water Law Summit, King said, “Most (Basins) was already over appropriated before the establishing the perennial yield.” He noted, “Popular thinking suggested that not all rights would be put to their maximum beneficial use, so it was acceptable to over‐appropriate. And on June 29, 2018, King told the Legislative Committee on Public Lands that: “The goal is not to allow the consumptive use of Groundwater rights and domestic wells; to exceed the basin’s perennial yield.”
VVWDB sets SNWA ICS rate for Virgin River irrigation water
In Mesquite, NV, the owners of Paradise Canyon (DBA the Wolf Creek Golf Club) balked when Virgin Valley Water District Board members NephiJulien, Ben Davis, Richard Bowler, Randy Laub, and Travis Anderson moved to raise the irrigation rates from $300 to $1,246 (as established by SNWA under the Intentionally Created Surplus and Irrigation Surplus doctrine) on the local Wolf Creek Golf Course.
March VVWDB Adjusts Rate
Then on On April 19, 2018, Greg Walch, attorney for SNWA, emailed Bingham and told him that “decreed rights owned by MIC only have annual and not monthly flow-rates limitations.” Walch said, “That leads us to conclude that we would be unable to use the 50 shares clawed back from the Conestoga Golf course (and by default the Wolf Creek Course)without amending the agreement with Conestoga to comply with ICS monthly accounting requirements.”
April: SNWA cannot lease MIC Irrigation water
May: Paradise Canyon vs. Virgin Valley Water District Board
Then on May 15, 2018, through their attornies (Sylvester and Polednak, Las Vegas), the owners filed a civil suit (A-18-774539B) in the Eighth Judicial District Court, Las Vegas, against them the VVWDB members contending that they and previous board members violated the Covenant of Good Faith and Fair Dealing doctrine in not adhering to a historically based understanding between the two parties on irrigation water pricing.
The Covenant issue is a dispute between golf course owners and the Virgin River Water District Board (VVWDB) over the Virgin River irrigation stock shares rates. The shares were appropriated under the 1927 Virgin River decree and are now owned by various people, including the golf course owners. The VVWDB has the power to accept the market rate for the shares, which can benefit those who own them, including those sitting on the board.
June: Motion to Dismiss
And as expected, on June 9, Jedidiah Bingham, acting for the VVWDB, filed a dismissal motion to dismiss the Paradise Canyon civil suit before Judge Timothy C. Williams of the Las Vegas District Eighth Judicial Court, who would rule over the case.
Jeffery Sylvester, the lead attorney for the Plaintiffs, urged the court to decide on its merits, not on a frivolous motion to dismiss. He pointed out that VVWDB’s flippant assertions, e.g., that Wolf Creek is “subsidized by the residents of the Virgin Valley and is proceeding in “bad faith are verifiably false. Sylvester contends their dismissal motion is a libelous work of fiction and should be denied outright.
August’s Motion to dismiss denied
On August 29, Judge Timothy Williams, Department XVI, Eights Judicial District Court in Las Vegas denied Bingham’s motion to dismiss.
September Malicious countersuit by VVWDB
With ample public funds provided by Julien, Davis, Bowler, Laub, and Anderson to defend the rate-setting agreement, Bingham launched a malicious counterclaim (aggressive lawsuit) against the owners of Paradise Canyon in September 2018. Bingham’s countersuit, which prolonged the case and resulted in attorney fees over five years.
2019 ICS rate reduction
On March 6, 2019, VVWDB members Julien, Davis, Bowler, Laub, and Anderson voted to reduce the rate at which they would lease their shares in the Mesquite Irrigation Company (MIC) to the Southern Nevada Water Authority (SNWA) from the 2014 rate of $1,246 to $1,115.67 effective in Fiscal Year 2020 to coincide with the lease rate charged by non-district MIC shareholders in their agreements with the SNWA.
2020 SNWA enters an agreement to use public funds to pay for unused Virgin River water.
January SNWA agrees to lease Virgin River Water
In January 2020, SNWA and Virgin Valley Water District (VVWD) executed a lease agreement where SNWA will, on a monthly time-step, calculate the unused portions of the 403 shares in MIC owned by the Virgin Valley Water District (VVWD) and SNWA will compensate VVWD for the unused water from VVWD’s shares, including the pre-BCPA portion for which SNWA receives ICS credit.
The main purpose of the lease agreement between VVWD and SNWA is to provide VVWD more flexibility to utilize more MIC shares in the summer months (May through September 2021) when golf course water use is high and to allow SNWA to take additional water in the winter months when the golf courses use is low, thereby maximizing beneficial use of the water.
September Nevada Supreme Court disagrees with redirection Appropirated River Water.
Eleven years after Governor Gibbons signed NRS 534.080 allowing the diversion of Virgin and Muddy River water to Lake Mead, on September 17, 2020, The Nevada Supreme Court disagreed with redirecting previously established Water flows under prior appropriations without considering the public trust doctrine. The Justices concluded that:
“Our state’s comprehensive water statutes do not permit the reallocation of water rights already adjudicated and settled under the prior appropriation doctrine. In doing so, we reaffirm that the public trust doctrine applies in Nevada and clarify that the doctrine applies to all waters within the state, including those previously allocated under the prior appropriation,” the Justices said.
They said, “We further hold that the state’s statutory water scheme is consistent with the public trust doctrine by requiring the State Engineer to consider the public interest when allocating and administering water rights.”
They recognized that: “in recognizing the significance of finality in water rights, our Legislature has expressly prohibited reallocating adjudicated water rights that have not been otherwise abandoned or forfeited by the state’s water statutes. Accordingly, we answer the first question as reworded in the negative (cannot reallocate) and need not consider the second [because the State Engineer must consider the public trust in its administrative duties].
Click here to see the history and analysis of court decision
2023 ICS rates increased and Paradise Canyon Vs. VVWDB trial begins
March ICS irrigation rate increase
On March 7, 2023, VVWD hydrologist Aaron Bunker discussed the board’s leasing policy.
In discussing lease revenue Bunker told Ben Davis, Brian Bingham, Richard Bowler, Randy Laub, and Gary Elgort that their irrigation lease policy remained consistent with SNWA leases of MIC and BIC water stock shares with an annual 3 % rate increase. The lease rate for a MIC share is currently $1,219.13 and a BIC share is currently $1,483.01. Beginning October 1, 2023, the lease rate for a MIC share will increase to $1,255.70 and a BIC share will increase to $1,527.50 and would these rates would be in effect until 9/30/2024.
Bowler moved to set the District’s lease rates beginning October 1, 2023, for a MIC share at $1,255.70 and a BIC share at $1,527.50. Laub seconded the motion and it was unanimously carried.
May trial begins
On May 9, 2023, Jeffry Sylvester, lead attorney in the Paradise Canyon vs. Virgin Valley Water District began his opening remarks.
when Paradise Canyon contested the “rate” increase, the VVWDB conjured up the idea that it was not the VVWDB that violated the contract. It was the owners of Paradise Canyon. It was up to the Jury to determine if the expectations in the agreement were reasonable.
The VVWD is a subdivision of the state of Nevada. It was built on the back of a golf course gene “rate” 50 million or more for a community of about 22,000 people. It was explained that water comes from the virgin river that drains into lake mead. That is the reason we are here. By leasing “shares” to SNWA, they make more money. That explains how Paradise Canyon’s Wolf Creek golf course came about with loans of about 10 million by Doug Clemetson. Eventually, the business turned over to sons Chad and Cory. Lenders were anxious to get their money back, and Clemetson 2003 filed bankruptcy to buy time to stretch out the debt. It has cost a great deal of money for the Clemetson brothers, but their passion is to keep the business viable.
He explained that the owners need the ability to predict the future and explain the differences in the water. There are three types: culinary water (domestic use), which is why the VVWD exists. That is the only thing they do. Effluent is owned by the City of Mesquite, which cleans and then “leases”s to the Golf Courses. The third type is river water from the Virgin River, owned by Mesquite Irrigation Company (MIC), with three different owners and three different prices (high domestic price, wastewater next, river water lowest). River Water (to think to drink too thin to plow) is unsafe for consumption.
May Agreement to cut the Colorado River water
In May 2023, the seven states reached a new agreement to cut water use from the river over the next three years to prevent reservoirs from falling to critically low levels. The deal, known as the Drought Contingency Plan, calls for California, Arizona, and Nevada to reduce their water use by 3 million acre-feet between now and 2026.
2023, Verdict
And on June 2, 2023, Las Vegas, NV. District Court Jury told Virgin Valley Water District Board board members Ben Davis, Brian Bingham, Richard Bowler, Randy Laub, and Gary Elgort, Mesquite, NV. to pay the owners of Paradise Canyon (DBA the Wolf Creek Golf Club) owners $811,000.00 in overpayments for violating the justified expectations that the local market for Virgin River, a tributary of the Colorado River, irrigation water would exclude the rental rates paid by the Southern Nevada Water Authority (SNWA) for Virgin River Water they acquire under Department of Interior-Bureau of Reclamation (BoR) “Intentionally Created Surplus Doctrine” (Tributary Conservation) under the Colorado River Interim Guidelines as presently administered by Department of Interior (DoI) Secretary Deb Haaland as the Colorado River Water Master and Bureau of Reclamation (BoR) Commissioner M. Camille Calimlim Toutonrvile.
As a civil matter, the Plaintiff’s case centered around a violation of the Covenant of Good Faith and Fair Dealing provisions in a contractual relationship in which the Virgin Valley Water District Board (VVWDB) attempted to raise irrigation water rates from a local Virgin River Valley rate of $250-$300 per stock share to Las Vegas Valley rate of $1,246 per share set by the Southern Nevada Water Authority (SNWA).
The Jury looked at two versions of Mesquite Irrigation Company (MIC) and Bunkerville Irrigation Company (BIC) Virgin River pricing. One, a set of Virgin River stock prices ranging from $150 to $300 for local irrigation shares and a $1,246 value set by Southern Nevada Water Authority (SNWA) for taking credits on unused MIC water and converting the credits (with some adjustments) to domestic Water for their customers in the Las Vegas Metro area—two completely different markets. They set $300 as the fair market rental value of the leased Virgin River Water shares as of January 1, 2020.
But as a potential criminal matter, testimony and depositions taken by Plaintiff’s attorneys over the five years it took to get to trial revealed a history of market price manipulation between shareholders of MIC and BIC, the SNWA, and the VVWDB to inflate the value of publically owned but over appropriated Virgin River stock shares no longer needed for their original purpose. Further, the price manipulation took place under the auspices of the Secretary of Interior and the Commissioner of Reclamation, dating back to a set of rules governing the management of the Colorado River between 1992 and 2007 (extended to 2026) in an attempt to mitigate water losses along the Lower Basin states (Arizona, California, and Nevada) including storage levels in Lake Mead and Lake Powell.
Purchases and Leases
Click on purchase order
