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Water Board Tables Land Purchase
Posting Date: 07/06/2012

By Barbara Ellestad

With two members absent, the Virgin Valley Water District (VVWD) Board of Directors tabled the final decision on purchasing three acres of land at its meeting Tuesday, July 3.

Board President Karl Gustaveson and Kenyon Leavitt were absent from the meeting, leaving Vice President Ted Miller, Sandra Ramaker, and Richard Bowler to give General Manager Ken Rock the final go ahead to sign real estate transaction papers for the vacant lot adjacent to the current headquarters.

Bowler objected to that saying, "I wish Karl and Kenyon were here. This is a pretty big vote."

Questions were also raised about closing costs that the contract papers had the District paying for.

"I don't know where the discrepancy happened," Bowler, a real estate professional, remarked. "The contract I originally had called for the seller to pay the real property transfer tax and the owner's policy. That's the traditional method. But when I looked at the closing papers, we were paying them. When I talked to the title officer, she said the buyer was paying it. So how did it change," he asked.

"It's not a terrible amount of money, but it is a couple thousand dollars," Bowler added.

The agreed upon price for the land is $340,000. Adding in the extra charges brings the final sale price to $341,075.

Commercial appraiser, Morley & McConkie, LLC, appraised the land at $375,000. The last reported sale on the property was in July 2006 for $1,050,000.

"The title company is looking into Rich's question," Rock told the Directors.

Bowler also questioned whether the District was subject to transfer tax on the real estate purchase.

"I agree with Rich," Ramaker added, regarding the pending vote. "With all these additional questions is there any reason why we can't hold this until the next meeting?"

With that, the three Directors voted to table the item.

In quick order the Board awarded a contract to Mesquite General Contracting for asphalt repair work associated with a water main break on Palmer Lane and White Rock Road that occurred the weekend of June 15 through 17. Only two bids were submitted out of 10 companies notified by the District.

The bid from Mesquite General Contracting at $18,651 was slightly higher than the one submitted by Trade West at $17,950. However, Trade West did not have a current, valid liability insurance certificate on file. "Because of that, we felt it was appropriate to award the bid to Mesquite General," Rock explained. "The bids were substantially below what I thought they would be."

The vote was 3-0 in favor of the action.

"We really dislike change orders. But we asked for this one," Miller said in introducing the agenda item in which the Directors were being asked to approve a change order request for the Bunkerville Evaluation Study from Forsgren Associates in

the amount of $4,500 to include two additional alternatives as part of the scope of work.

"We want the study to be as comprehensive as we can get. That's why we're asking to add two more alternatives," Rock explained to the Board.

Forsgren has been studying the Bunkerville secondary water system with four alternatives: no change in the system; enhance water quality through targeted blending and flushing techniques; minimize potable water use by using Bunkerville Irrigation Company (BIC) water; use BIC water and relocate facilities to the VVWD 11 acre site.

The change order adds two more alternatives: abandon the system; abandon residential connections and keep high volume users.

"If we don't include these two alternatives, then essentially we will have missed the opportunity to consider them," Rock said. "It may make sense to run the secondary system only for a couple large users."

He explained that large users include Clark County and the cemetery.

The original contract fee for the study was $18,000. Forsgren and Rock are requesting another $4,500 to include the additional two alternatives.

The Board approved the action item on a 3-0 vote.

During the Consent Agenda approval that included financial statements for May, Miller said, "in looking at our profit and loss statement, it looks like this five percent is a real number in the decrease in our monthly income. We need to make sure we incorporate that into our future planning."

Miller was referring to a trend that's occurred over the last year or so in which revenue from water usage sales has steadily decreased.

"We just got our revenue report for June," Wes Smith, VVWD Accountant remarked. "It's about $25,000 more than we anticipated. That was less than the budget projections anticipated but more than we planned on during the budget augmentation hearings. So we're planning carefully."

The Water District received approximately $200,000 less last fiscal year than was projected in water usage fees from ratepayers.

"We have to be frugal because we've got a long pull before we get out from under our debt structure," Miller reminded the Board. "Everyone is doing really well. The only one [expense area] we're off on is the Professional Services but I'm sure we can correct that."

Miller added that "I hope we don't use the pipe settlement as a crutch." He was referring to the recent $2.8 million legal settlement the District received that bolstered the bottom line in the last fiscal year. "If we back that out of there, we're not looking near as good as we should."

"If we back that out, we're still pretty close to what we budgeted," Smith remarked. "We budgeted for a loss last year."

See Mesquite Citizen Journal story VVWD Board Approves Policy Changes, Hires New Lobbyist for more information and to access budget augmentation documents.

 

Commentary
  • Posted Date: 07/06/2012
    Miller added that "I hope we don't use the pipe settlement as a crutch." There are a lot of us out here that hope the same thing, Mr. Miller. We would feel a lot better if the pipe settlement funds were in a separate escrow-type acct to be used to try to make the injured parties whole rather than lumped into the general fund. Any idea why that wasn't done?
    By: John
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