Water fight looms

Friday, Oct. 26, 2001 | 5:03 a.m.

Clark County officials have found water that they believe will allow the population of the Las Vegas area to double. But those sitting on top of that water are claiming it for themselves.

The claim by government officials north of Clark County could mean that Las Vegas residents in the future will have to buy water from a for-profit company.

Officials with the Las Vegas Valley Water District say the ground water north of Clark County is vital for continued growth. As the population has grown from 741,000 in 1990 to 1.4 million last year, the region has come closer to taking the state's maximum allotment from the Colorado River.

The Las Vegas Valley Water District plans to bank any of its unused allotment from the river, store surpluses and buy water not being used by other states. Water from the Virgin and Muddy rivers in northern Clark County may also be tapped.

But that won't be enough to sustain Southern Nevada's growing population.

For that, the water district wants water from underneath the ground in the counties north of Clark County, in the east-central part of the state.

But the local governments and private interests in those areas are challenging the notion that Southern Nevada's needs are paramount.

The battle began in 1989, when the district filed claims with the state engineer's office for the yearly rights to draw hundreds of thousands of acre-feet of ground water from lands north of Clark County.

An acre-foot is about 326,000 gallons, enough for a family of five for one year. Nevada takes close to its limit of about 300,000 acre-feet a year out of the Colorado River, whose waters are shared with six states and Mexico.

A decade after filing the claims for water in Lincoln, Nye and White Pine counties, the Las Vegas Valley Water District negotiated an agreement with the three counties. The agreement grants those counties water for local development, and the counties promise not to oppose the water district's applications.

Lincoln County withdrew from the agreement last month. In an unusual partnership with California-based Vidler Water Co., Lincoln County filed claims for the same water claimed by the Las Vegas Valley Water District.

Both sides have filed claims for about 200,000 acre-feet of water per year.

State Engineer Hugh Ricci will evaluate the competing claims and will decide who gets what. His office must decide how much is available for use without hurting existing water users, including the region's ranchers and wildlife.

It isn't the only water dispute in Lincoln County that Ricci is weighing. The Las Vegas Valley Water District is also fighting a private development group for water rights in the Coyote Springs Valley.

Coyote Springs Investments, a company led by powerful gaming lobbyist Harvey Whittemore, needs water for a development on the Clark County-Lincoln County line.

Las Vegas Valley Water District General Manager Pat Mulroy and district staffers say Coyote Springs Investments' water claim is easier to justify than the Lincoln County-Vidler claim because the company has a specific need.

Mulroy and others say Lincoln County's claim is simply a method to make money from the water users in Southern Nevada.

The Lincoln County-Vidler partnership was formed three years ago. Vidler's business plan says it will buy agricultural water sources to sell to urban customers.

Las Vegas Valley Water District staffers say the huge amount of water Lincoln County is seeking cannot be justified in terms of the county's development. Lincoln County has about 5,000 residents and a long-moribund economy, traditionally dependent on agriculture.

Lincoln County and Vidler's partnership calls for the county to pay for development of water resources. Profits from selling the water would be split between the county and Vidler.

Vidler is owned by California-based PICO Holdings Inc. The water company is PICO's main subsidiary, but Vidler stablemates include an Australian energy company, a European ski-lift operator and large insurance interests.

Vidler also is a player in Western water storage -- a system of diverting large water surpluses to huge underground storage areas so that the water can be used during dry times.

Las Vegas Valley Water District spokesman Vince Alberta said the moves by Vidler and Lincoln County violate at least the spirit of the cooperative water agreement that the county entered into with the district.

Vidler is pulling out of markets where government agencies have not been hospitable.

In July, the company sold its interests in a water-banking project in California, receiving $6.9 million for its interests.

PICO President John Hart noted then that "California remains a difficult marketplace for private water resource companies due to the large number of public entities involved in the water market, each with different, and sometimes conflicting, constituencies."

But in Lincoln County, the company has found a friendlier public entity.

According to the state engineer's office, Vidler itself isn't the applicant. Lincoln County, instead, has filed applications for more than 224,000 acre-feet per year in basins throughout the county.

The water district has applied for a similar amount of water -- more than 195,000 acre-feet.

Another public water agency, the Virgin Valley Water District, has applied for 311,000 acre-feet from the two water basins closest to Mesquite, the northeastern Clark County city of about 10,000 people.

Officials from the Virgin Valley Water District and the Las Vegas Valley Water District say they need the water for development.

In Coyote Springs, developer Whittemore says he also needs Lincoln County water for new homes and commercial development. The Las Vegas Valley Water District wants about 25,000 acre-feet per year in the area. The Whittemore-led Coyote Springs Investments wants about 40,000 acre-feet.

Coyote Springs Investments and the Las Vegas Valley Water District are negotiating and both said they believe their claims can be reconciled.

Officials from both the Las Vegas Valley Water District and the Virgin Valley Water District say their need for water, and the need for developers in the Coyote Springs Valley, is motivated by a desire to serve people.

That isn't the case in the Lincoln-Vidler partnership, they say.

"What Vidler is concerned about is making a profit on the water," said Las Vegas Valley Water District Assistant Director Kay Brothers. The district's motivation, she adds, is to bring water to the public efficiently and at the lowest price possible.

Brothers said the fundamental principle that water rights are a public trust, administrated for the greatest good of the entire public, are threatened by the water claims filed by the Lincoln County-Vidler partnership.

But Vidler Chief Operating Officer Dorothy Timian-Palmer says it is the Las Vegas Valley Water District that is the speculator, filing claims for water it may not need for decades.

"Las Vegas runs roughshod over everybody," Palmer said. "Here's (Lincoln County) trying to become self-reliant, and they're being blocked from using their own resources because somebody else might need them in 40 years."

Timian-Palmer said the water it has applied for throughout Lincoln County isn't for sale to Las Vegas, but will be used for development of homes, power plants and industrial parks within the county.

Free ride

"They had a free ride over Lincoln County until Lincoln could get a partner that could help with the expertise. Now, we're standing toe-to-toe with them and saying perhaps the water should stay in Lincoln County."

Lincoln County Commission Chairman Dan Frehner said the water could be used to develop more agriculture and industry in his county, "allowing our kids to stay here."

"All Vegas is going to do is transport the water out and wave goodbye to us when it crosses the county line," he said.

Lincoln County and Vidler's own documents and officials, however, suggest that the partnership also plans to sell the water outside the county. For example:

* During the hearings on Coyote Springs in July, Lincoln Commissioner Paul Donohue said that the Vidler-Lincoln partnership is seeking profit from water export to Clark County.

* Lincoln County's formal plan for water use notes that full domestic use of the county's water resources "is not only unlikely, it would probably result in an unacceptable reduction in what county residents see as their high quality of life."

* The memorandum of understanding that established the partnership between Vidler and Lincoln County, signed three years ago, calls for leasing and delivery of water outside the county.

* According to company records, the ultimate goal is to provide water to the fastest-growing large urban area in the country and Nevada's biggest market.

Marc Reisner, a Vidler analyst, says on the company's website: "(Las Vegas') gaming and tourism industry now generates twice as much gross income as California agriculture. But more than any other Western city, Las Vegas is inconceivable without imported water."

Las Vegas Valley Water District officials say they don't want to get in the way of Lincoln County's economic development.

Under the 1999 water agreement with Lincoln, Nye and White Pine counties, local governments are guaranteed 53,000 acre-feet per year -- enough water for about 200,000 people, or 40 times Lincoln County's present population.

Brothers and other Las Vegas Valley Water District officials say the 53,000 acre-feet is more than enough for Lincoln County's development.

The water that Vidler and Lincoln County have asked for will end up being sold to Las Vegas and other Clark County urban areas, the Las Vegas officials say.

Brothers predicted the Las Vegas Valley Water District will win the case before the state engineer, which is likely to be heard early next year. She notes that the district's applications were made first and serve a greater public good.

Strong case

But Karen Peterson, counsel for Lincoln County, believes her side has a strong case.

"We certainly feel that we have valid arguments supported by law," Peterson said.

State Engineer Ricci said his office must first determine how much water is available.

Ricci says no one knows how much water lies under Coyote Springs or Lincoln County.

John Huston, president of Integrated Water Resources, agreed that the Lincoln County ground water "has never been studied much."

Integrated Water Resources is a California-based company that researches ground water issues throughout Nevada. The company is providing mapping information and analysis to Nevada Land and Resource Co., the Vidler affiliate.

"Everybody is agreed that there is a lot of water, but it can vary a lot from site to site," Huston said. "You don't have a large pumping history."

Making an accurate assessment even more difficult is the fact that the underground resource is literally moving from basin to basin. Drawing water from one valley could substantially affect water resources miles away.

"It's a matter of the applicants coming forward, coming up with a plan and dealing with the monitoring and rest of it," Huston said.

The state engineer does have years-old, very rough estimates of water in both Lincoln County and Coyote Springs to work with.

According to 1992 estimates, the "perennial yield" available for human use in Coyote Springs is 18,000 acre-feet per year. The water district already has allocated rights for 7,500 acre-feet, and Coyote Springs Investments has rights to 6,100 acre-feet.

But both the district and the company are asking for a lot more. The district has an application for 27,000 acre-feet. The developer has asked for 29,000 more.

Whittemore said he believes that there is a lot more water than the estimates have suggested, and he would carefully monitor the flow from test wells if he gets a go-ahead from the state engineer.

The situation is similar for the rest of Lincoln County's disputed water supplies. The old estimates say there are about 135,000 acre-feet throughout the county, far short of the hundreds of thousands that the county and the water district have applied for.

By law, those applying for the rights to use the water have to show Ricci's office that the water is available and won't adversely affect existing water rights. Both Vidler/Lincoln County and the Las Vegas Valley Water District have drilled test wells and are studying the amount available. The estimates that they produce could be significantly different.

It is up to Ricci to determine which estimates are the best.

Ricci said his office will probably make a ruling on the Coyote Springs issue sometime next year, if ongoing talks between the developers and the water district fail to produce a settlement. He heard oral arguments earlier this year.

Hearings on the Lincoln County issues also could come next year.

Some fear the effect drawing off the water -- by the Vidler/Lincoln County partnership or by the Las Vegas Valley Water District -- would have.

William Mull has been a cattle rancher in northern Lincoln County's Cave Valley for two decades. He usually runs about 600 head at his ranch that straddles private land and federal Bureau of Land Management property.

The cattle drink from scattered stock wells and natural springs. They graze in valley meadows fed by water flowing just below the surface -- "subirrigated" land.

Mull worries that those sources could dry up if Ricci allows large-scale exploitation of the water sources.

"If they start pumping, we're not going to have subirrigated meadows any more," he said.

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