Truckee Canal Contract Tied up in Court

  • 2022-11-18, 05:31 AM (update 2022-11-21, 09:40 AM)
  • Rachel Dahl
Truckee Canal Contract Tied up in Court Davy Stix The Fernley Reach of the Truckee Canal where the lining project is set to take place.
Construction project continues...

Updated to clarify that the construction project is on track, the repayment contract is at issue in court.

On Wednesday, November 9, Judge Jim Shirley presided over a hearing in the matter of the Petition for Judicial Determination of Validity and Authority of the Board of Directors of the Truckee-Carson Irrigation District to Enter into Such Contract as Provided for by NRS 539.305.

The City of Fernley has filed counterclaims to the TCID petition as well as a Motion to Intervene and a Peremptory Challenge. The hearing last week was held to hear oral arguments on the City of Fernley’s Motion to Intervene and TCID’s Motion to Strike City of Fernley’s Peremptory Challenge.

In July, TCID filed a Petition with the 10th Judicial District Court asking for the court to validate the authority of the district to enter into a contract with the United States Bureau of Reclamation for the repayment of $35 million to repair the Truckee Canal. Water right holders had affirmed the contract in a special election held June 30. The votes were divided along the riverways with the Truckee Division voters coming in at 123 against and 29 in favor, while the Carson Division voters totaled 1,857 ayes to 45 nays. The total votes were 1,886 in favor and 168 against.

Called the Extraordinary Maintenance Project by the BOR, construction would shut down the canal for one year, with no diversions from the Truckee River to Lahontan Reservoir and no Truckee Division irrigation taking place. The Truckee Division takes in primarily Bench Road, Hazen, and Fernley.

The Bureau of Reclamation is requiring TCID to line 3.5 miles of the Truckee Canal that runs through the City of Fernley as the canal moves water 31 miles from Derby Dam on the Truckee River to Lahontan Reservoir and serves the water rights of the Newlands Project in Churchill County. The canal breached in 2008, flooding 590 homes in Fernley. Eight years later, flood victims were awarded an $18 million settlement against TCID.

Under Nevada law, when an irrigation district enters into a contract with the United States for the repayment of the cost of construction or operation and maintenance, the district is required to hold a special election and allow members to vote to approve or deny the contract. If voters agree to the contract, the district then presents that contract to the local district court to determine the validity of the contract and the authority of the board to enter into such a contract.

During oral arguments last week, the City of Fernley was represented by David Rigdon, who was accompanied by Dave Whalen, Director of Public Works. Also in attendance was Stan Lau, Fernley City Councilman along with nearly 50 water right holders and members of the public.

Rigdon argued that Fernley should be a party to the action in order to maintain the right to appeal and asked Shirley to approve the motion to intervene. He said Fernley has an interest in the repayment of the contract as an owner of nearly 10,000 acre-feet of Claim Three Newlands Project water rights which could potentially result in $2.5 million in assessments to the city. Rigdon said Fernley is challenging the validity of the contract, saying the district entered into it under duress. Using the word “extortion” Rigdon said the district is asking the court to ratify a contract improperly entered into.

Prior to the special election, then General Manager Rusty Jardine said in several public meetings that should electors vote no against the contract the BOR would reduce the flow in the canal to 140 cubic feet per second. The canal generally runs at 500 cfs to serve water rights and carry water to the Lahontan Reservoir.

Ben Shawcroft, the current general manager of TCID appeared with board President Eric Olsen and argued that the rules of procedure are necessary and depend on the court to enforce. “Under the statute, any person interested may be heard and it is our position that the City of Fernley is having its day in court and will be able to represent their interests and represent why the contract should not be approved by this court.” He said the issue of assessments isn’t ripe because the board has not yet decided on assessments. He also addressed the Fernley claim that they have an interest in the loss of groundwater should the canal be lined. “They say their groundwater permits are a property right and that’s what they are trying to protect, but this is not a case related to groundwater permits, we have to distinguish a property right that exists in a groundwater permit versus a property right related to seepage from the canal.”

Judge Shirly said he would take the information under advisement and issue a ruling within a week. At press time there had been no ruling. “The Fallon Post” will continue to cover and update this story.



Rachel Dahl



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Mg Davey
Mg Davey 2023-02-18, 09:46 AM
Have you done an update to this story? I’ve done several searches but can’t find anything.                                                                    This:… and then one for this week, should be posted by Friday. Thank you!
carl_hagen 2022-11-18, 06:02 AM
Thank you for the great coverage.
Good job explaining a very complex issue.