Click image for enlargement. Bill Walters Developer's dealings with city under new scrutiny

Developer Bill Walters is getting some of the cheapest water in the county to irrigate three of his golf courses, paying the city in some cases about 85 percent less than his competitors.

Eleven golf courses in northwest Las Vegas pay $1.85 per 1,000 gallons of treated wastewater used to irrigate the courses' fairways and greens.

For the same 1,000 gallons of water, Walters' golf course at Stallion Mountain Country Club pays 23 cents, his Royal Links Golf Club pays 24 cents and his Desert Pines Golf Club pays 46 cents.

"Wow, I would want that deal," said David Bogue, general manager of Angel Park Golf Club, which pays the higher rate. "It's definitely unfair. There are no sour grapes other than I wish everyone was on a level playing field."

Angel Park and the 10 other independent courses in northwest Las Vegas get their water from the Durango Hills Water Resource Center. The satellite sewage treatment plant, a partnership between the city of Las Vegas and Las Vegas Valley Water District, was built to supply nondrinking water to the golf courses. The prices the courses are charged offset the plant's construction and operation costs.

Two of Walters' courses, Stallion Mountain and Royal Links, were built next to and purchase water from an existing sewage treatment plant, the city's Water Pollution Control Facility.

That water is sent through a pumping station paid for by Walters. But the city gave back to the developer $1.7 million in water credits to cover construction costs and 50 years' worth of electrical and maintenance costs, according to city records.

The water sent to Walters' Desert Pines course is supplied by a separate, smaller treatment plant that the city built at Bonanza and Mojave roads. It was completed in April 1999 at a cost of $5.7 million, according to city officials. Its only customer is the golf course.

An unnamed city staff member recently questioned the "favorable rates" that the city charges at Desert Pines.

In a response sent to city employees last month, City Manager Doug Selby said the city has to honor contractual arrangements made in 1996, when a group led by Walters proposed changing the downtrodden Nature Park into a golf course.

"To the person who pointed out the very favorable rates for reuse water being provided to Desert Pines Golf Course, I have reviewed the history of this arrangement, and although today reclaimed water is a valued commodity, it doesn't appear that was the case when Desert Pines was originally conceived in 1996," Selby wrote. He added that the city owns the land and leases it to Walters at a price of $100,000 a year.

In an e-mail sent Friday to the Review-Journal, Selby said: "The water contracts for the Stallion Mountain, Desert Pines and Royal Links golf courses were negotiated more than eight years ago, prior to my tenure with the city. I won't speculate on the considerations that went into those agreements, which are binding today."

The county charges $1.05 per 1,000 gallons to its handful of customers. The county's price is established by ordinance, so all operators pay the same rate, according to Clark County Water Reclamation District spokesman Marty Flynn.

Walters was unavailable for comment, his assistant said.

The city's dealings with Walters have come under scrutiny recently as the developer has sought to turn Royal Links into a 1,200-home subdivision.

Amid controversy over studies of the proposal, the city asked for a police investigation.

Police found no criminal wrongdoing related to the current effort to build houses on the golf course land. But authorities concluded that former Public Works Director Richard Goecke probably had committed criminal acts in the late 1990s benefiting Walters and possibly costing taxpayers millions of dollars. The Clark County district attorney's office reviewed the police inquiry and determined that criminal charges could not be pursued because the statute of limitations had expired.

Goecke has denied any wrongdoing. He has not returned calls for comment.

The attorney general now is investigating the matter.

Even though Walters has not been accused of any wrongdoing by authorities, the controversy has focused interest in his past deals with the city. It also has brought renewed criticism that the developer gets the best of local governments when he enters agreements with them.

In February 1996, the City Council approved a deal with Walters' company to build a plant and supply treated wastewater for the land that eventually became Desert Pines Golf Club. The item was on the council's consent agenda, a spot usually reserved for noncontroversial matters.

The company agreed to buy the water from the city at $1.03 per 1,000 gallons, according to the contract signed by Richard Chulick, then president of The Walters Group.

The city, which was responsible for building the small treatment plant to supply the water, could boost the price Walters paid for water by up to 5 percent per year.

It is unclear when, and why, the $1.03 per 1,000 gallons price was reduced to the current rate of 46 cents.

In December 1997, The Walters Group again approached the city wanting to buy more treated wastewater, this time at three Stallion Mountain courses and the Royal Links course, according to a staff report.

Stallion Mountain had been buying water from the county's sewage treatment plant for 91 cents per 1,000 gallons, according to Flynn.

The city and Walters settled on a price of 20 cents per 1,000 gallons for water provided to Royal Links and Stallion Mountain courses.

The staff report, prepared by Goecke, said that in using treated wastewater on golf courses, the city would save $300,000 a year by skipping some processes required of the city to put water back in the wash and return it to Lake Mead.

However, if the water were put back in the wash, it would flow to Lake Mead and the valley would get credit for every gallon returned.

In recommending the "mutually beneficial arrangement" to the council, Goecke cited a report by HDR Engineering Inc., prepared by David Pivetti, a senior vice president and engineer with the firm.

Pivetti's report said the city would save about $6,500 a year in dechlorination costs. The rest of the savings would come from not having to meet stricter phosphorous standards and from not having to turn ammonia into nitrates.

The report pointed out that it would take until 2025 to realize some of those savings because there was no infrastructure in place to bypass the nitrification process and the stricter phosphorous standards that Goecke cited wouldn't be put in place until years later.

However, Goecke made no mention in his report that it would take years for the city to see some of the savings.

"I was thinking that those were going to be golf courses forever," Pivetti said Friday from his Sacramento, Calif., office.

But two golf courses at Stallion Mountain are being graded for housing, and Walters wants to turn Royal Links into a subdivision.

Eight years later, officials at the city's sewage treatment plant said it is still just as costly to treat irrigation water as it is to treat water that is put back in the wash and returned to Lake Mead.

"The difference is negligible between the cost of treating reuse water and the cost of treating water going back to Lake Mead," said David Mendenhall, the city environmental manager who runs the Water Pollution Control Facility.

Mendenhall declined to comment on Goecke's memo.

The major benefit of using the treated wastewater, officials said, is that it doesn't have to be pumped back up from Lake Mead and treated again before being used to irrigate a golf course.

Meanwhile, golf course operators say that water remains one of the largest costs associated with running their businesses.

Angel Park's Bogue said the course operators who get their water from the Durango Hills station expect that it will get more expensive. They said they believe water supplied by the station will jump in price to about $2.10 per 1,000 gallons.

As far as the disparity in price between what they pay for water and what Walters pays, some operators paying the higher price viewed it with a sense of helplessness.

"That's something out of our control," said Joe Massanova, marketing director of TPC at the Canyons. "I absolutely do not think it's fair, but that's up to the elected officials to make sure the golf industry is treated equally from course to course."