Tuesday, May 13, 2003 | 10:59 a.m.
CARSON CITY -- Lincoln County officials told legislators Monday that Senate Bill 487 is the only way the rural area can develop the 2 percent of its property that isn't under federal ownership.
The law, if passed by the Assembly, also positions the county's private partner in water development -- Vidler Water Co. -- to enter similar partnerships with rural counties throughout the state, turning the liquid resource into cash for Vidler and development deals for the rurals.
SB487 would allow all counties except for Clark to enter into a public-private agreement to pay for the acquisition of water rights and to allow the county to share in the proceeds from any sale of the rights -- something Lincoln has already done with Vidler.
Opponents, including environmentalists, say SB487 simply cements Lincoln's pejorative moniker, Vidler County, by allowing Vidler to "use" Lincoln County in a public-private partnership that could result in higher rates for Clark County water users while providing the company with a cash cow.
"This was the most imprudent thing the Senate has ever done," Sen. Warren Hardy, R-Henderson, said prior to a hearing on the measure Monday in the Assembly Government Affairs Committee.
Hardy, whose district includes rapidly-growing Mesquite, told the committee that the bill "throws out 150 years of water law that says water belongs to the people."
Water officials with Mesquite's Virgin Valley Water District have battled Vidler and Lincoln County. They fear development of deep water resources in southern Lincoln County would threaten their wells.
"We are making water an instrument of commerce," Hardy said, adding that Mesquite residents would have to pay more for water if the bill passes because the market value of selling the water there would be raised to give Lincoln-Vidler a profit.
Lobbyists representing Lincoln County; Vidler Water Co.; Vidler's sister company, Nevada Land & Resource Co.; and its parent company, Pico Holdings; testified SB487 is the only way the poor county can get a leg up and reduce its tendency to lean on richer counties for subsidies.
"Lincoln County has a limited tax base and revenue stream," said lobbyist Mark Fiorentino, representing Vidler, Nevada Land and Lincoln County.
The county says the partnership was needed because it was unable to pay for well drilling and other tests required to obtain water rights -- rights it says were needed to entice development, including two proposed industrial parks and a new water-cooled power plant for which Vidler is seeking permits to begin operations.
Lincoln County entered a partnership with Vidler in 1998 to acquire water rights. Vidler has spent about $4 million seeking permits for roughly 150,000 acre-feet. The company's long-term business plan includes taking rural water and selling it for a profit to urban areas.
An acre-foot of water is about enough for a family of four for a year. Lincoln County has 4,000 residents and is the site of developer Harvey Whittemore's proposed Coyote Springs golf course and 50,000-home residential development.
The Southern Nevada Water Authority, water wholesaler for cities in Clark County, had opposed the partnership, saying it would negate the district's ability to draw water from Lincoln County and force it to instead buy the water at potentially high rates.
But a compromise earlier this year with Vidler, Lincoln and the Water Authority required the Las Vegas officials to drop their opposition to SB487 in return for guarantees to water rights throughout half of Lincoln County.
Las Vegas officials have estimated that the Lincoln County water could ultimately supply a half-million people in the city. The Las Vegas agency also agreed to drop its support for a 2002 attorney general's opinion that state law does not currently authorize the specific private-public partnership contract created with Lincoln-Vidler.
The bill, Fiorentino said, is in response to that opinion, but he added: "We thought they had that authority already."
Hardy, however, argued that Vidler has bigger plans with the bill than settling the attorney general's opinion. He said Lincoln County does not need Vidler to develop water rights, but Vidler needs the county's name to win approval for permits from the state's water engineer.
Hardy and Lincoln County resident Bevan Lister, also an opponent of the Vidler-Lincoln partnership, argued Vidler entered the partnership to give them a better chance at getting approval for "speculative" water rights. Historically, public agencies have received state approval for such speculative uses while private companies and property owners have not.
Private companies have to show proof of every acre-foot of need before the engineer issues the permits, he said.
Steve Hartman, a Vidler attorney, said the Lincoln-Vidler arrangement "wasn't driven by a need to sell water outside Lincoln County."
But when the bill was in the Senate, Vidler officials would not accept an amendment that the partnership be considered a private one and not a public one for state water permitting purposes.
Assemblywoman Peggy Pierce, D-Las Vegas, warned that legislative approval of the Lincoln-Vidler partnership could lead to Enron-style market manipulation of water.
She expressed concern about an amendment Fiorentino has proposed that states the partnership could only sell, lease or transfer water rights to a public entity for its "fair market value." She also said she did not support Lincoln-Vidler selling water to Clark County so that urban desert residents could keep green lawns.
The committee took no action on the measure Monday. Assembly Government Affairs Committee Chairman Mark Manendo, D-Las Vegas, asked Hardy and others with proposed amendments to bring them to his attention immediately because Friday is the deadline for bills to pass out of committees.
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