Father of water project hopes construction start is near

After working nearly 15 years on a plan to import water to the North Valleys from ranchland 22 miles to the north, Bob Marshall hopes to move quickly this summer to bring the project to reality.

But the water utilities that may hold the fate of the project in their hands say they're nowhere close to signing a deal with Marshall.

The Intermountain Water Supply Project is proposed to bring approximately 2,200 acre-feet of water annually from wells in Dry Valley and Bedell Flat to storage tanks near the Stead Airport.

An acre-foot of water is roughly enough to supply a family of four for a year, and Marshall bills his project as "a modest amount of water from close sources."

Modest or not, a lot of work and a potentially rich payoff are at stake in the project.

An attorney with Parsons Behle and Latimer in Reno who also owns and operates a ranch at Dry Valley, Marshall has been working since 1993 to clear a long series of regulatory hoops.

He's drilled test wells, hired researchers, won permits from the state engineer, started to nail down easements from county, federal and private landowners and negotiated with regional water planners.

So far, Marshall has paid for the work from his own pocket, but he's talking with investors to finance construction costs that are estimated to run about $22.7 million.

The potential payoff, Marshall says, is this:

Assuming he can win the OK to bring another 200 acre-feet of water into the project, the construction costs would amount to about $8,500 an acre-foot.

But Marshall and Derrick Parish, an investment advisor with Sperry Van Ness who is helping to market the project, estimate that developers could pay $35,000 to $40,000 an acre-foot for water from the project.

Deals under consideration to finance the pipeline and related facilities, Parish says, include joint ventures and equity partnerships as well as outright purchases of the as-yet-unbuilt Intermountain Water Supply Project.

But a key element, Marshall says, is an agreement with a water purveyor such as Truckee Meadows Water Authority that would actually operate the system.

In background materials on the project, Marshall says those negotiations are under way.

The top executive of TMWA, however, is more circumspect.

"We're quite a ways from negotiation," says Lori Williams, general manager of the water agency. She says TMWA is watching the progress of Marshall's project, but has a limited service territory in the North Valleys and may not need as much water as Intermountain would deliver.

The other water purveyor in the area Washoe County's Department of Water Resources hasn't had any recent discussion with Marshall and hasn't seen a detailed proposal, says Don Mahin, a senior licensed engineer with the department.

The Intermountain proposal also faces competition from a 35-mile pipeline under construction by Vidler Water Co. to deliver 8,000 acre-feet of water annually to the North Valleys from Fish Springs Ranch.

But Marshall believes his smaller project is likely to find a market among developers with projects closer to the Stead terminus of Intermountain's proposed pipeline.

Assuming he can get commitments from purchasers of the projects and water and put financing into place, Marshall said he expects the project could be built this summer and begin delivering water no later than early 2008.

"Things are going to happen pretty quick," he said. "We need all the water we can get."

The $22.7 million price tag on the project, Marshall said, includes $12.7 million for pipeline construction, $3.5 million for well construction, a little under $1 million for construction of a booster station and $2.1 million to extend power lines to the wells and booster station.

The budget also includes $1.9 million for construction contingencies, $577,000 for design and bidding and nearly $1 million for construction administration.