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SNWA Whistleblower Shows Ratepayers Bilked for Spring Valley Ranches

by George Knapp
The Southern Nevada Water Authority (SNWA) has used rate hikes and government subsidies to purchase ranches at six times above market value to appear as landholders for water rights for their proposed pipeline. An employee of the SNWA turned whistleblower has come forward with evidence of bribery of local officials and yearly losses of money on the SNWA ranches. In related news Sen. Mike Roberson introduced SB 232 with bipartisan support to require greater transparency by the SNWA and would require the water authority to obtain approval from the PUC before increasing water rates.
The latest news from Nevada about the proposed SNWA pipeline is the ranching empire of the SNWA losing money and being pruchased above market value with the goal of obtaining water rights so they can heist the aquifer water from the Spring and Snake Valley. Indigenous nations, environmentalists, ranchers and the urban ratepayers of Clark County are against the pipeline as it will be used for development on cheaper land far north of Las Vegas and will deplete the aquifers and spring fed streams in only a few decades at most. However, developers like Harvey Whittemore and Albert Seeno will make tremendous profits from their Coyote Springs project with 100,000 planned homes and six golf courses, it just happens to parallel the proposed pipeline route. There is no other water available for Coyote Springs, any wonder why Whittemore himself started funding the SNWA pipeline project many years ago?

The purchase of rural ranches for water rights was the same trick used by Mulholland and the Owens Valley water grab that let to sprawl development in the San Fernando Valley at the expense of urban ratepayers in LA. The water from that heist didn't even reach LA for many years as it went directly to the suburban sprawl of the SFV developers. How soon we forget the mistakes made by previous generations, though there were warnings made about the draining of Owens Lake they were ignored in the rush to develop Southern California as quickly as possible without concern for the Owens Valley residents, including millions of migratory birds that dined on the plentiful brine shrimp of Owens Lake.

Likewise the spring fed ecosystems of the Snake and Spring Valleys of northern Nevada targeted by the SNWA are the foundation of the ecosystem and contain many endemic species found nowhere else on Earth. They include the Bonneville cutthroat trout, least chub and the spring snails that are all descendants from inhabitants of ancient Lake Bonneville. How sad that these unique beings have come so far and through climate changes that dried Lake Bonneville only to face extinction bcause of human greed. Thankfully people with ethics like whistleblowers and local politicians are standing up to this Owens Lake type repeat water grab in now in Nevada.

I-Team: Woman Speaks Out on Ranching Empire

Posted: Feb 26, 2013 2:38 PM EST Updated: Feb 27, 2013 2:08 PM EST

By George Knapp, Chief Investigative Reporter - bio | email

By Matt Adams, Chief Photojournalist - email

"SPRING VALLEY, Nev. -- The Southern Nevada Water Authority has spent huge sums of public money to gobble up a string of rural ranches because of the water underneath them. SNWA claims the ranches are operating in the black, but a whistleblower has come forward to tell a much different story.

The I-Team has reported previously about how much was spent to acquire the ranches, and it's quite a pile of money, but until now, no one on the inside was willing to talk about the operations of the ranches.

Debra Rivero worked for the water district for many years and was a valued employee but when she started working as office assistant at the ranches, she realized she had entered a world unto itself, one that we co-owners never get to see.

The SNWA owns seven rustic ranches in Spring Valley. The public may not know it, but they are in the ranching business because of a SNWA spending spree. The authority has spent nearly $80 million to buy a string of ranches, tens of thousands of acres, plus cows, sheep and farm equipment.

As the I-Team first reported, SNWA paid many times the market value for the ranches. El Tejon ranch, valued at $1.1 million went for $32 million. The Harbecke ranch, now headquarters for SNWA's empire, with a market value of a $250,000 fetched close to $5 million from the water agency.

"I did everything, from paying the bills to weighing the trucks, every penny that came in, and every penny that came out, I was responsible for," said Debra Rivero, a former SNWA employee.

She worked for the water district in Las Vegas for 17 years before moving north to run the office for the ranches. From the beginning, she said, she was struck by how little oversight there was by SNWA.

"The whole operation is very secretive. They don't encourage anybody to come up and take a look and tour the place. It's just all very secretive."

How secretive? Rivero says the first ranch manager, who took the job after his ranch was purchased for six times its market value, was given a year's salary when he left, with the condition that he keep quiet.

Outspoken critic Hank Vogler who owns one of the few area ranches still in private hands, was offered a consulting contract if he would button his lip. Former White Pine District Attorney Richard Sears landed the best deal of all. He agreed to drop his planned opposition to the water grab in exchange for a brand new well on his ranch, plus irrigation equipment, plus nearly 400 acre feet of water per year, with a value of more than $1.5 million dollars.

"It's all in the contract," Rivero said. "Just so he'd be quiet and withdraw the protest. I think the worst thing was the payoffs for people to be quiet, to stop protesting. It was the most horrendous thing I've seen."

The ranch operations bled money for a few years but now, according to SNWA's accounting, they are in the black, earning $260,000 last year from sales of hay and beef. Neighboring ranchers scoff at the math, saying SNWA's deep pockets mean this ranching operation doesn't face the same challenges as an actual ranch, standing on its own.

What other rancher has nine committee meetings to pick a design for a brand, for instance or has a government sugar daddy to repair equipment or buy new trucks? Although the ranches supposedly made a profit, the costs to the public keep going up.

The operating budget was $500,000 a year in 2007, it went to $750,000 in 2008 and was bumped to $850,000 last year. Expenses that would count against a real rancher's bottom line are not included, Rivero said. For example, SNWA reported it sold $1 million worth of hay.

"That doesn't include the fertilizer, the irrigation equipment, the employees time, everything else," Rivero said.

She adds, she was told by the current manager and others about suspected widespread theft by employees. Cows, sheep, equipment, even saddles disappeared but didn't show up on any ledger.

"I kept bringing it up. 'Hey there is unethical stuff going on up here' and the Vegas office didn't seem to want to hear it. They didn't want to talk to me about it. They didn't want to say anything."

Veteran rancher Dean Baker, an opponent of the water grab, says all of the public money being plowed into the ranches will be wasted once the pumping begins because Spring Valley will be sucked dry.

"It will kill the ranches when they pump it. If they don't know that, they are way stupider than I think they are," Baker said.

Scott Huntley, the chief public information officer for SNWA issued the following statement:

"The Southern Nevada Water Authority is committed to operating and maintaining its Spring Valley holdings in a responsible manner to protect both employees and equipment. As a not-for-profit public agency, the SNWA adheres to strict policies and procedures focused on preventing harassment, workplace violence and drug use. Senior officials from the agency are actively involved in managing the properties. Our Environmental Health and Safety and Corporate Security Department makes regular site visits along with our Fleet division, Finance and Facilities to conduct inspections and verify appropriate business practices. We maintain strict business practice and inventory controls and have had no verifiable reports of theft on the ranch properties."

Rivero told the I-Team a lot more about the operation of the ranches, and I-Team reporter George Knapp will report that information in the days ahead.

Rivero left the ranch operation because of what she said was a hostile work environment and has filed a complaint with federal authorities. Future I-Team reports will have explosive details about what happened to her, and what she saw."

Can SB 232 pass with bipartisan support and prevent the ecological disaster of the SNWA pipeline?

"In October 2011, we were surprised to see Clark County agree to give Pat Mulroy regular job reviews. Apparently, that's not enough oversight for a growing number of state lawmakers. They want to see more.

Last spring, SNWA faced enormous backlash over its water rate increases. It had been a long and tough slog for environmentalists to get Southern Nevadans to care about the fate of the rural agrarian community and ecosystem of Snake Valley. But when SNWA rammed through a plan to pay for its proposed Snake Valley pipeline by disproportionately raising water rates on working class families and small businesses while bailing out the region's biggest water wasters, Mulroy has been in the hot seat ever since.

So now, we have this.

[Senator Michael] Roberson’s [R-Henderson] bill would require the SNWA to obtain approval from the Public Utilities Commission, a three-member board appointed by Gov. Brian Sandoval, for any water rate increase on business or commercial customers of the utility.

The bill also would require the Public Utilities Commission to appoint a hearing officer to investigate the need for a proposed rate increase and issue a decision approving or declining the rate increase.

“Many in the Southern Nevada community believe the process failed to allow an adequate opportunity for public input,” Roberson said in a statement. “Southern Nevada residents and businesses will likely face future significant rate increases. This legislation will ensure that those rate increases occur in as fair and equitable manner as possible in a completely open process.”

Mulroy testified this past week that there was “massive public outreach” about the rate increases in 2012.

Roberson’s bill has support from Sens. David Parks, D-Las Vegas; Pete Goicoechea, R-Eureka; Mark Manendo, D-Las Vegas; Scott Hammond, R-Las Vegas; Barbara Cegavske, R-Las Vegas; James Settelmeyer, R-Minden; Joyce Woodhouse, D-Henderson; Joe Hardy, R-Boulder City; and Mark Hutchinson, R-Las Vegas.

So much for that "massive public outreach". SB 232 has attracted broad bipartisan support in Carson City so far. Rural Senators concerned about the impact of the Snake Valley pipeline on their communities and Clark County lawmakers angered over last year's rate increases may very well succeed in the first real challenge to the previously unchecked power of Mulroy and SNWA.

In years past, SNWA was able to cry "DROUGHT!" to silence critics demanding more accountability. That may not work this time. Last year, SNWA actually removed incentives for water conservation. And last November, SNWA reached a historic Colorado River water sharing agreement with several other Southwestern states and Mexico.

Now yes, Nevada is facing a real drought. We have climate change to thank for that. And we can't ignore the challenges that lie ahead with climate change and continuing drought. But really, how does stealing water from one region to fuel unnecessary real estate development in another region help? And how on earth can one justify repealing water conservation incentives?

So perhaps SNWA does need some more oversight. That's why the above mentioned legislators are coalescing behind SB 232. And that's why Pat Mulroy is running a bit more scared these days."

"CARSON CITY – Senate Republican leader Michael Roberson, R-Henderson, today introduced legislation to give the Nevada Public Utilities Commission oversight of the Southern Nevada Water Authority.

Senate Bill 232 increases transparency and accountability of the rulings made by the SNWA board. It requires SNWA to submit an application to obtain approval from the PUC for any increase in water rates.

Last summer, SNWA ruled that water rates would be significantly increased to cover the debts incurred by the agency. “Water rates were hiked some 300 percent last summer on small businesses in Southern Nevada,” stated Roberson. “Many in the southern Nevada community believe the process failed to allow an adequate opportunity for public input.”

“I am pleased to have bipartisan support on SB 232,” stated Roberson. “The primary sponsors of this legislation are Senators Parks, Goicoechea, Manendo, Hammond and myself. Senators Cegavske, Settelmeyer, Woodhouse, Hardy and Hutchison have also graciously agreed to cosponsor this important legislation to increase transparency and accountability in the Southern Nevada Water Authority.”

“Southern Nevada residents and businesses will likely face future significant rate increases. This legislation will ensure that those rate increases occur in as fair and equitable manner as possible in a completely open process,” commented Roberson."

by Suffers Stroke Soon After
After disclosing the excessive prices paid for ranches and theft of equipment at ratepayer expense, SNWA whistleblower Ms. Rivero was threatened with a live cattle prod held inches from her face. Soon after this incident she suffered a stroke.

"I kept bringing up, 'Hey, there is unethical stuff going on up here' and the Vegas office didn't seem to want to hear it. They didn't want to talk to me about it," Rivero said.

In particular, she said, SNWA didn't want derogatory information about the ranches to be leaked to the I-Team, especially to reporter George Knapp.

Rivero said the lack of oversight by SNWA meant the ranches operated as a world unto themselves. The result, for Rivero, was horrific. In a blistering complaint filed with the federal Equal Employment Opportunity Commission, she described an extremely hostile work environment in which she was harassed, humiliated, and demeaned. [...]

One incident was a turning point. She alleges that Peterson tried to intimidate her with an electronic cattle prod.

"It was a live cattle prod, a live cattle prod, and he held it within inches of my face. When I didn't jump out of the way, I just froze out of fear, he shocked the light bar above me and sparks went flying all over. He just chuckled and laughed and walked away."

She said she reported the incident to SNWA Human Resources director Pat Maxwell.

"And she did nothing. Her answer to me was, 'Well, you need to sit down and figure out what you did to make him so mean to you.'"

Shortly after this incident, Rivero suffered a stroke. A doctor told her to go to the hospital immediately. The White Pine ranch manager drove her to a hospital in Ely, then dropped her at the curb. Less than 2 weeks later, SNWA threatened to terminate her!

This may be the final straw to break the camel's back for SNWA. The agency was seen as ominpotent and infallible for so long. When the "boom times" were here, SNWA raked in the cash from the explosive growth of Clark County. But now that Clark County's population is growing more slowly, the real estate bubble is long gone, and climate change is leading to an extended Western drought, SNWA may have to give up the free reign it's enjoyed for over 2 decades.
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