Storey officials irked by sale of water rights, unpaid taxes

Storey County officials say they got short-changed in a recent sale of water rights to the Pyramid Lake Paiute Tribe.

The water will be used to improve water quality in the Truckee River and Pyramid Lake, but for Storey County the sale means the loss of the county's only agricultural land.

"The Paiutes came out of the deal with good water," said Dean Haymore of the Storey County Building Department. "We came out with dry land."

The water rights were part of Joe Conforte's Mustang Ranch Brothel property in northern Storey County, seized by the federal government in 2001 through a court forfeiture action.

The land and water rights were transferred from the Treasury Department to the Bureau of Land Management earlier this year and the sale of the water rights, 461 acre feet, was completed last week. The tribe used $821,376 of Water Quality Settlement funds to complete the deal.

The Truckee and its environs have been earmarked for restoration by the Bureau and the Nature Conservancy, but Storey County's agricultural land, a thin ribbon of fields and pastures winding its way along the corridor between Reno and Fallon, is filling up with a non-native plant called white top, Haymore said.

"We understand the need to keep water in the river during low flows, but the last big ranch in Storey County is now destroyed," he said. "The federal government wants to protect the Truckee River, but they screwed Storey County in the process."

Another bone of contention is the $74,000 in property taxes owed to Storey County by the federal government, a sum accrued from July 1999 to October 2001, said Sarah Jensen, chief deputy treasurer.

"The IRS paid the taxes for other Conforte properties that had been siezed, including Cabin in Sky and the trailer park property in Lockwood," she said. "We were told by EG&G, the company managing the property for the Internal Revenue Service, that tax proceeds for the Mustang Ranch property would be forthcoming."

Storey Commissioner Greg "Bum" Hess said negotiations between the Treasury Department, Bureau of Land Management and Storey County have been ongoing for years. Storey officials were hoping to retain enough water to maintain those agricultural lands, in addition to receiving the back taxes. Hess said John Singlaub, manager of the Carson City field office for the Bureau, has always been fair in his dealings with Storey County and he expects the problems to be resolved.

"But if we don't hear anything, we could be forced to put a lien on the property," Hess said.

Chuck Pope, an assistant field manager for nonrenewable resources with the Bureau of Land Management, said everyone had an opportunity to file claims against the Mustang Ranch pursuant to U.S. code, but Storey County failed to do so.

"All those claims have been settled," he said. "The government's position is, they're no longer responsible for that payment."

Haymore said the legal notice concerning liens against the Mustang property was published in Reno newspapers, but not in Storey County.

"The Mustang Ranch was seized by the Internal Revenue Service for back taxes," he said. "Now, the feds are saying 'We don't have to pay.'"