The Committee on Government Affairs was called to order at 8:20 a.m., on Monday, February 15, 1999. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Bache, Chairman

Mr. Lee, Vice Chairman

Ms. Berman

Mrs. Freeman

Ms. Gibbons

Mr. Humke

Mr. Mortenson

Mr. Neighbors

Ms. Parnell

Ms. Segerblom

Mr. Thomas

Ms. Tiffany

Ms. Von Tobel

Mr. Williams

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Chairman Bache stated before the committee members heard the bills on the agenda, there were several Bill Draft Requests (BDRs) that needed introduction.

• BDR 23-564 - Revises provisions governing securing of certain insurance and services by public agencies through nonprofit cooperative associations or nonprofit corporations. (A.B. 227)

ASSEMBLYMAN WILLIAMS MADE A MOTION TO INTRODUCE BDR 23-564.

ASSEMBLYWOMAN TIFFANY SECONDED THE MOTION.

• BDR 23-646 - Exempts relatives of members of certain town boards from prohibition against certain public employment. (A.B. 226)

• S 476 - Makes various changes to charter of city of Reno. (A.B. 309)

• BDR C-1402 - Proposes to amend Nevada constitution to increase limitation on state indebtedness solely to pay costs of construction and renovation of school facilities. (A.J.R. 7)

Chris Weiss, Southern Nevada Water Authority, stated A.B. 92 revisited a request brought before the 1997 legislature and was part of A.B. 201 of that session, but his office withdrew language in the bill. A.B. 92 would extend the length of time a wastewater capital improvement could be financed. Currently wastewater facility bonds were for 30 years. Those facilities were typically designed and built to have a life span of 50, 75, or 100 years or more, so 40- year bonds would not extend beyond the useable life of the asset. He added the 40-year bond would not make sense in all instances, but did provide an additional financing tool in balancing large or particularly costly infrastructure needs. His complete testimony was included in Exhibit C.

Assemblywoman Tiffany recalled from testimony heard last session by Carole Vilardo, Nevada Taxpayers Association, that 40 years was too long on the hardware part of plant construction. Mr. Weiss replied that was language included in A.B. 201 in 1997. He did not recall Mrs. Vilardo’s concerns, but understood the extended term not be used to fund soft costs, such as employees associated with projects. He did not feel there had been opposition in paying for "brick and mortar" projects.

Ms. Tiffany felt the concern had not been the "brick and mortar" but the "physical plumbing" of a project. The way she understood the bill, it did not distinguish how funding could specifically be used. She thought Mrs. Vilardo wanted everything well identified if the bill was approved, and especially for any extended period of time. Mr. Weiss pointed out the bill did use the definition of water and wastewater facilities as part of A.B. 201 and bonding could not be used for any purpose outside of that definition.

Ms. Tiffany asserted the concern was how would the long-term financing be used as A.B. 92 did not seem to address the issue. Mr. Weiss felt the definition in A.B. 92 addressed the definition of water and wastewater facilities, and the language in that bill referred back to the definition in A.B. 201 of the 69^th Session.

Chairman Bache interjected he believed one of Mrs. Vilardo’s concerns during last session was a 40-year bond would be setting a new precedent as far as the amount of time for which the state would bond. Previously 30 years was standard for construction projects.

Mr. Neighbors said if $1 million was borrowed over 20 years at the current interest rate $2 million would be paid back, if that interest was spanned over 40 years. The payments would be less but the interest would be paid back double. He questioned the service life of 50 to 100 years, as the taxpayers would end up paying a lot more interest for every dollar.

Chairman Bache pointed out one of the arguments 2 years ago was by bonding for 40 years, the rate of inflation would be such that having the longer loan would save money near the end of the loan. Even though more was spent it was being done with cheaper dollars.

Mr. Weiss said that was correct, essentially the financial reasoning went into the bill, as there was no difference between borrowing for 30 or 40 years. The interest rate would be approximately the same rate, so taking a longer term made sense in managing the short-term cash flow. They were trying to assess rates as water and wastewater facilities were built, future residents would have to help pay for the services they used.

Mr. Humke stated he did not have expertise in the area of water and wastewater facilities, but questioned Mr. Weiss’ statement of cash flow. If in the long-term interest rates were better, did that mean the ¼ cent sales tax increase passed in 1997 was no longer needed.

Mr. Weiss said he did not agree. The water authority’s perspective on financial issues was to try to balance the need for projects costing significant amounts of money up-front and spreading as fairly as possible those costs to the people benefiting from them. He added issues such as the ¼ cent sales tax had the goal of achieving a balance and flexibility over time. He thought given the rate of growth in southern Nevada and the demands placed on water and wastewater infrastructure, a fairly good job had been done. The ¼ cent sales tax was the highest priority for financing the projects, the bond issue was just another tool, but obviously not as important as the sales tax.

Joan Lambert, representing Washoe County stated she wanted to introduce some experts accompanying her who would explain A.B. 96, which had been introduced by Washoe County on behalf of the Washoe County Regional Planning Commission. She added, two sessions ago the legislature established the Regional Water Planning Commission who did planning for the county and advised the county commissioners on water issues. With her were principal staff of the Regional Water Planning Commission, Mr. Steve Walker, and Mr. George Ball who was a voting member of the commission, and a professional engineer who had over 40 years experience in water projects in the area. She also introduced Mr. Dale Bugenig who was a hydro-geologist with over 20 years experience in ground water modeling and recharge projects.

Steve Walker, Water Management Planner, Washoe County, said he had a brief statement. In 1995 the legislature passed S.B. 489 which became NRS 548, regional water planning legislation for Washoe County. Since that time a plan was developed which was doing well in Washoe County. A.B. 96 was legislation proposed through the commission to study various areas to determine effectiveness of aquifer recharge and storage. The bill was sanctioned by the water planning commission and presented to the Board of County Commissioners for inclusion into the Washoe County legislative package. He explained water planning in Washoe County was dominated by a surface water resource, the Truckee River. Surrounding the urban area were ground water areas.

Mr. Walker went on to explain to effectively manage water resources for the future a surface water system needed to be used in conjunction with a ground water system. The Truckee river provided the base flow, whereas wells provided peak flow as well as to supplement water usage in the summer period. That plan was referred to as "passive recharge," which basically meant a well pumping 365 days a year now would only pump during the summer. Also requested was "active recharge," which took the surface water when it was abundant and stored it in the ground for later use when it was needed. The idea was to put Sierra Pacific Power water into the ground in the winter at a South Truckee Meadows General Improvement District well. Recharge areas would also be considered for placing storage wells where soil characteristics were favorable for recharge.

Speaking next was George Ball, who had been a practicing water engineer in Nevada since 1966. He had been involved in many types of water projects in the planning, development, design, and construction of over 40 ground source projects. His firm recently completed a hydro-geologic study involving surface water storage in a western Nevada aquifer and then withdrawing the stored water at a later date for municipal purposes. One issue of modification in the legislation would be storage of water over time and then withdrawing an equal volume of water at a later date. He believed the need for various water entities to have the flexibility to recharge, store in the ground, and then pump the water out later was important in Nevada for future integrated resource planning and management. "Further the stored water pumped from the ground should be in proportion to the volume stored and not necessarily related to the same water that was recharged. Ground water moves very slowly so the exact molecule of water recharged may not be the molecule of water withdrawn as long as the water was pumped out at the same volume. For each storage and recovery project it must be demonstrated through an actual operational experience that the impact of the recharge storage and recovery project was not adverse to prior existing rights in the projects area of influence." He felt the modifications in the bill added clarification to what was already a good statute.

Ms. Von Tobel stated many people in the northwest area of Las Vegas were on wells, and questioned if the proposed legislation would affect them. Mr. Ball responded Mr. Bugenig could better respond to the question, but he did know Las Vegas valley had an active recharge program, which had been ongoing for a number of years. Treated water was injected back into the ground water system and if the project was administered correctly it would keep the water levels from falling too low, which could adversely affect domestic wells.

Dale Bugenig, Senior Hydrogeologist, who was with Consulting Engineering Services in Reno, said he had been involved in ground water investigations in Nevada since 1974. Mr. Bugenig went on to read from his written testimony (Exhibit D), which oversaw a feasibility study of aquifer storage and recovery in Washoe County, which he led. He pointed out groundwater elevations had declined locally creating problems in shallow domestic wells with both water levels and chemical quality. A liberal interpretation of present regulations allowed for managing the volume of water that was stored and later retrieved. He thought strict interpretations afforded no credit to benefits, such as an increase in the elevation of the water table which might occur when water stored was essentially traded for water recovered. Mr. Bugenig added Washoe County Department suggested words "volume of water" be substituted for the word "water" in several sections of NRS 534. The change would keep the language more consistent with other states such as Colorado and Oregon.

Ms. Tiffany questioned if Clark County had a process in place under the statute, why Washoe needed the change in that particular section of NRS. Mr. Bugenig responded he could not speak for Clark County, but through the study in which he was involved, it was determined there could be an impact on falling water levels in the Truckee Meadows, through artificial recharge. It could be Clark County did not have the exact same conditions where water could be lost, as happened in the southwest Truckee Meadows. In order for the project to work and be beneficial to the people in the southwest Truckee Meadows a different view of the interpretation of the regulations was needed.

Ms. Tiffany said she did not really get her question answered, if it were a different recovery and recharging process for Clark County, then was it Washoe alone who required a statute change. Mr. Bugenig noted it would not change how recharge was done in Clark County, as their environment was slightly different and allowed them to take the exact same water out of the ground. A major benefit of aquifer storage and recovery was to keep the water levels elevated, so extractions would not adversely affect shallower domestic wells. If regulations in place did not have a beneficial affect because of local conditions, then a slight change was needed. Those changes would not affect Clark County, but would be beneficial to the northern part of the state.

Chairman Bache interjected that he would call either Mr. Weiss or Mrs. Wilcox later in the hearing to explain the differences. He felt one of the reasons for the differences was the return flow credits in southern Nevada from the Colorado River.

Mr. Ball thought he could address the difference. He said the modification to existing legislation was not to change the aquifer. It was to input water into the ground, from whatever source, store it and then pump it out at a later time. The main thrust, as he understood the bill, was water placement and storage without impacting the volume when withdrawing the water at a later date. Las Vegas Valley had a tremendous overdraft problem caused by prior pumping over many, many years, which had left a large hole in the ground in which to put water. He added Truckee Meadows had a different recharge scenario albeit a program that would benefit the recharge area. During the project studied in the Fernley/Wadsworth area the idea was to take Truckee River water and store it in an aquifer, which discharged into the Truckee River over time, and could be stored for a long period of time and withdrawn later. What the county wanted was a legislative modification, which allowed removal of water without having to take the exact same water out of the ground as was put in.

One last comment Mr. Bugenig wanted to make was the requested legislation would not really change the overall aquifer storage and recovery program statewide. It might be looked at as slightly different accounting methods. One method looked at one molecule of water going into the ground and making sure it was the same molecule coming out. The other looked at the elevations, raising the water level with recharge and when that water was moved, there was no drop in water level. He stressed it would not be the exact molecule that would be pumped out.

Ms. Tiffany said if she understood the nuances, even though the words say charge, recharge and storage, was not really the thrust. It was the migration of the water, and assuring the volume was equal.

Ms. Von Tobel questioned on page 2, line 19 through 22, which talked about the violation and what someone might do to be in violation and be charged $10,000 a day. She asked if it would also apply to domestic well owners.

Chairman Bache interjected perhaps Mr. Turnipseed, the state engineer, might be the one to respond since he was in charge of fines.

R. Michael Turnipseed, Nevada State Engineer, responded he was not in opposition of recharge and recovery. There were several projects in the state, some successful and some not as successful. He had not seen Washoe County’s proposal as no application had been filed with the state. He took exception with the statement water was measured on a molecule by molecule basis. The active recharge recovery projects in place had participants identify the active management area and the area of hydrologic affect. There was no problem with recharging the water in an area and then recovering the water out of that same general area. The problem was where the proposed recharge area moves rapidly and gets away from them. If the state gave a project credit for 100 percent of what was put in the ground, then by definition it would be interfering with some other wells in the area.

Mr. Tunipseed indicated in the rough sketch he had just passed out (Exhibit E), the upper sketch showed a mountain block with water recharging through the crevices to become the water table. As the wells pumped out of a particular water table, a cone of depression developed around the well. The remaining water continued down the radiant into the Truckee meadows and was affected by transpiration from plants and evaporation, or reached steamboat creek. The lower sketch showed the same mountain block with a recharge well where a mound developed from the recharged water. If the water in the area was to be deposited and removed in the same year, a long-term banking proposal was in place similar to that in Las Vegas. Over time the mound would decrease in elevation and spread out over a larger area as well as continuing downstream.

He pointed out in Mr. Bugenig’s study, the amount of water recorded was only 50 percent of the water put in. That by definition indicated 50 percent of the water got away from them. If they were given 100 percent credit then by simple definition the water table would be lowered. He did not think adding the word "volume" helped any. Line 11 required identification of an area of hydrologic effect and by definition questioned where the recharged water lay, not just 1 or 2 years but many years down the road. There was a definition of recoverable amounts determined by the state engineer that reached the aquifer and remained in the area of active management. If it could be shown the water put into the ground stayed in the area of active management, there was no problem. He felt their goal was to place 100,000 acre feet into the ground, with 50,000 acre feet getting lost, but they still wanted to recover 100,000 acre feet.

Mrs. Freeman asked what other areas would be affected by the project. Mr. Turnipseed responded all the areas got 100 percent credit for the amount of water put into the ground. The best example was Las Vegas who had 140,000 acre feet in reserve. A pilot program was initiated by Sierra Pacific Power where the company tried to recharge an artesian well, by forcing water into the ground. It was unsuccessful because it leaked from the ground due to the close proximity to the Truckee River. Therefore, if the water went down river and the same amount was taken out, the water table would be lowered in that localized area. Another failed project was at Wendover where putting fresh water on top of salt water was tried with the hope of getting fresh water back out, but instead it was a blend.

Mrs. Freeman questioned section 4, with regard to penalties. She asked if the penalties were for water actually stolen, or could it apply to water taken out by construction trucks for use in spraying. Mr. Turnipseed replied no one had ever been assessed a penalty for stealing recharged water. In Las Vegas there were wells which did not belong to the Las Vegas Valley water district. However, a permit was needed to extract certain amount of water and if that amount was exceeded an order to cease and desist would be issued. Only in a few cases did the state have to go to court to enforce the order.

Ms. Berman inquired if there was a better formulary for banking long-term water such as evaluating how much was lost and how much was to be replaced, or was there just one blanket formulary. Mr. Turnipseed replied the formula could not be "one size fits all", because the ability of the water to move underground was different in every instance. For instance Sierra Pacific’s plan was to store the water in the spring and pump it out in the fall. Obviously the underground water moved as far in that scenario as if it had been deposited in 1999 and recovered in 2010. It was up to the applicant to demonstrate with monitoring wells, where the area of influence was and if the water level remained constant so an amount could be pumped out without interfering with other wells in the area.

Ms. Berman questioned if the burden would then be on the applicant. Mr. Turnipseed said when an applicant filed for a recovery/recharge project it required them to define the active management area and the area of hydrologic effect. There must be an indication as to where the transmissibility in the aquifer was and depending on the plan a series of monitoring wells must be established, to show over time, how far the water had spread and how much could be recovered without interfering with other existing water rights.

Ms. Berman asked if the process had worked well. Mr. Turnipseed explained, a bill, which became effective in 1989, had been drafted mirroring Arizona’s recharge/recovery law. It was introduced by the Las Vegas Valley water district at that time and had worked very well for Las Vegas and Carson City, but there were only a handful of successful recovery/recharge projects throughout the state.

Ms. Von Tobel commented she had a lot of angry domestic well owners in her district. She questioned what was the scenario before her constituents would actually face the $10,000 a day fine. Many were demanding they keep their wells even though eventually they would have to hook up to city water. She felt she needed to respond to constituents if recharged water was taken and they did not knowingly do it.

Mr. Turnipseed replied the majority of community, quasi-municipal, and domestic wells had already been established in the northwest years before the Las Vegas Valley Water District began recharging. Those entities obviously had access to the water table before the recharged water was put on top of it. He understood her concern as he attended a meeting where emotions ran from high anxiety to outrage and largely because of the hookup fees. Because of that meeting, his office was rethinking the policy of whether those people would be required to hookup to city water. Once their well penetrated the aquifer and water was removed, it would be difficult to ascertain which was recharged and which was naturally blended water. If the water level was 150 feet when the well was drilled and had declined to 160 feet over the years, but with recharged water it was now at 100 feet, no fine would be assessed because they were pumping natural water as well as artificially recharged water. He did point out domestic wells did not represent as much impact on the water table when taken into the whole picture in the valley.

Ms. Segerblom questioned if water taken out of Truckee Meadows would affect the downstream users, such as Fernley. Mr. Turnipseed stated anytime recharged water leaked out of an area of active management, the water table in the meadow area was raised, but the excess would be absorbed by grasses or picked up in one of the tributaries of Steamboat Creek. If the water went into the tributaries, it would become the water rights of downstream users.

Ms. Segerblom asked if the downstream users would lose their rights to water. Mr. Turnipseed responded there would just be less water, but their rights would remain. He thought Washoe County was trying to get full credit. If 100,000 acre feet was put in and 50,000 were lost, they still wanted to recover 100,000 acre feet. Presumably the water would be removed down gradient if the source was fairly close to the area of hydrological effect, because it would induce the recharge to that recovery well.

Mr. Mortensen asked why laws stating you had to recharge "X" amount in determining the flow of the water, could be changed to mandate the water table stay the same. It was necessary to recharge at a faster rate than what was being drawn, as it seemed a much easier way to say the water level would not drop.

Basically that was what the program was about, Mr. Turnipseed added, was the water table was being monitored in a larger area than just the recovery well. A cone of depression at the recovery well would begin to exist as water was taken out of the mound, so monitoring the wells assured water being taken out was what was put back. In the case of a well where the table had risen, the water level could be taken back down to what the original natural water table was.

Mr. Mortensen felt it would be easier to say, "the monitoring wells would not drop over a specific period of time." If it was dropping, then water would have to be replaced faster. Mr. Turnipseed replied that was the case in all of the recharge areas except Las Vegas, where the water table had been dropping anyway. The water had dropped in the northwest area at a rate of 3-4 feet a year, but since recharge came along the water table came back up about 6 feet. He pointed out part of a ground water management bill, which would come up later, would be an assessment in part to leave some water in the ground to lessen the rate of decline.

Mrs. Freeman stated ever since being on the committee, over the years, there seemed to be periodic water wars. Old time well owners, who now found themselves in an area of growth, were being asked to hook up to a water system, and if she understood previous testimony correctly, perhaps the state policy should be changed because the amount of private well water was not significant. Mr. Turnipseed responded he was answering Ms. Von Tobel’s question, which only addressed the situation in Las Vegas valley. A long time state policy was a person could remain on a domestic well until that well failed. Depending on how close the water line was to the dwelling a decision would be made if it was cheaper to redrill the well or hook up to a water line. However, hookup fees in Las Vegas had become so high it would never be cheaper to hook-up than redrill the well. Present fees were between $13,000 and $16,000, and would only bring the line to the meter box, then it was up to the homeowner to take the water line into the house.

Continuing, Mr. Turnipseed said if the northwest area were annexed into the city of Las Vegas, then city sewer hookup would be required and the cost would be approximately the same. So it could be a huge burden to the homeowner to be required to be on municipal water and sewer. Truckee Meadows costs were nowhere near as high. Las Vegas was trying to wean the people off groundwater and force them onto Colorado River water because the valley had been over-pumped for 60 years. In Truckee Meadows there was not the issue of a lack of water, but the two systems were similar. Both systems received 15 percent of their water from the ground. Eighty-five percent of the municipal water in the Meadows was Truckee River water, and Las Vegas received 85 percent of its water from the Colorado River.

Mrs. Freeman asked if Las Vegas made a house to house determination of who needed to be hooked up to the water line, while the old policy would remain in Washoe County. In Lemmon Valley for instance, would they be required to hookup to the water system. Mr. Turnipseed stated he did want to address another bill, being heard on domestic well credit. He added most local water purveyors required water rights be brought with them when they hooked up, which was not the case in Las Vegas. In the case of Lemmon Valley there were no more water rights to purchase, so pumping had been heavily restricted since 1969. There were only a few permits outstanding so a municipal server, limited by diversion rate, annual volume, and the number of homes, could now hook a person up and get a credit for the one house.

Mr. Bugenig interjected he wanted to clear up a misunderstanding. Nothing in his remarks requested 100 percent of the water that was recharged, it was understood the state engineer would determine the recoverable amount within the area of active management. He fully realized the hydrologic environment controlled the amount of water that could be extracted.

Mr. Bache questioned if there was an application pending with the state engineer for the Washoe County Project. Mr. Bugenig responded there was a feasibility study underway and there would be a pilot study to be implemented in the upcoming year.

In response to a question by Mr. Humke, Mr. Bugenig agreed an amendment would be considered.

Mr. Humke queried if the amendment would include a reference to the state engineer making the decision, and/or to allow a recharge rate of not more than 50 percent. Mr. Bugenig replied a statement was made earlier that the county was asking for 100 percent of the water, was not accurate. It was fully realized some of the water got away, and the initial analysis showed, under one scenario, only 50 percent would be recoverable. However, under the best scenario 83 percent might be recoverable, and what was being requested was a little more flexibility from the state engineer as to the recoverable rate allowed.

Mr. Humke questioned if there would be an amendment to that effect. Mr. Bugenig pointed out the recoverable rate allowed was already in the statutes. It was his understanding the state engineer made the determination based on the technical data provided to him.

Mr. Humke went on to say he was trying to establish a legislative record so if there was no amendment, perhaps the state engineer would prevail in his opposition. If there was no amendment proposed there would be a record that the state engineer did have authority to stop the pumping if that was needed to protect the water.

Julie Wilcox, Southern Nevada Water Authority, said their position on the bill was it had no affect on their agency. The conditions outlined by the state engineer were fairly clear. Southern Nevada was in a closed water basin with very good geology. Presently, there were about 150,000 acre feet in recharge. She added several points brought up would affect another bill her agency was proposing, which was the ground water management bill. That program was established during the last legislative session, and addressed some of the difficulties, which Las Vegas Valley had, particularly in the northwest. One aspect of the program, designed by a committee of citizens, most of whom were domestic well owners, private well companies, or quasi-municipal wells required water purveyors who were members of the Southern Nevada Water Authority in Clark County, to store some of their water resources permanently in the ground. Currently when the water was banked in the basin, it was for storage, but could be pumped out as needed. What would happen with the bill under consideration, would be to put a certain amount of water into the Las Vegas basin that could not be withdrawn. The amount of water was about 5,000 acre feet of water and 2,000 acre feet of water would be specifically recharged in the northwest, where the real problems occurred with water decline. There were significant water level increases since the artificial recharge program was started and she would provide more information when that bill was presented. She wanted to impress the committee with how significant ground water was in all of Nevada.

Representing Douglas County, Mary Walker stated the bill had been requested by Douglas County to alleviate some of its water problems. However, Douglas County officials had been working with the state engineer’s office up through the previous Friday. She would like to continue negotiations with the state engineer with regard to the bill and discuss it with the Board of County Commissioners regarding information received from the state engineer’s office. She requested the committee hold the bill at the present time.

Chairman Bache stated the committee would hold the bill. Mr. Bonaventura wanted to testify on A.B. 97, and he would give him the opportunity to address the committee.

John Bonaventura, Nevada Well Owners Association, in the northwest Las Vegas Valley stated his group had no problem with the bill. However, he did have a problem with people submitting bills and wasting staff time on things that either fell by the wayside or got deleted. He pointed out there was some confusion with "credits," if that meant financial or water credits. He felt the word "water" should be added in front of "credit" as indicated in Exhibit F. Mr. Bonaventura stated he had talked with both Mr. Turnipseed and Julie Wilcox, and they agreed the language could be changed. He thought the wording change would help in clarifying what credits actually meant.

Chairman Bache thanked Mr. Bonaventura for his comments. As there was no additional business, the meeting was adjourned at 9:24 a.m.

RESPECTFULLY SUBMITTED:

Virginia Letts,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: