By Mark Waite
The Hafen family sought to reassure ratepayers Monday the acquisition of Pahrump Utility Company by the county wouldn’t raise their rates during a meeting at the Artesia Community Center.
A few customers who spoke, were satisfied the Hafens were doing a fine job running the utility as it is.
“You’d be hard pressed to find a better utility than what the Hafens built. It’s well maintained. You’ve actually got good quality drinking water,” said Oz Wichman, a consultant for the Nye County Water District.
Jerry Gerardot, a customer, agreed with that statement.
“I think our utility company is the greatest thing there is at this end of the valley and I think commissioners should really take a hold of this thing and own it. We need development out here and the only way we’re going to get it is good infrastructure,” Gerardot said.
But Lloyd Larimer wondered whether Nye County or ratepayers would pay for future investment.
“Current ratepayers are going to pay for that debt. Does that mean the rates are going to go up?” he asked.
Vicki Hafen Scott said developers funded much of the infrastructure, paying a standby fee so they would have infrastructure waiting for them.
“You’re only paying your share of the operating expenses to operate the plants that we own. If there were to be money borrowed to build infrastructure in the future it would come from new customers that would be using that infrastructure,” she said.
The utility company increases rates according to the cost of living every year; they would continue that to make sure they meet expenses, Hafen Scott said.
“The money the county uses to purchase the utility they cannot increase your rates,” she said. “That will be something we stipulate to in the sale documents that the Public Utilities commission has to approve.
“The purchase of this utility by the county is not going to affect your rates at all,” Hafen Scott said.
Tim Hafen put a different spin on a comment from Tonopah Town Manager James Eason, a county water district board member, that the county could end up paying $35 million for the utility after 40 years.
“We intend the utility pay for the principal and interest and as a result the county is going to get back $35 million on their original return. That is our intent. We think that will work,” he said.
Nye County Water District General Manager Darrell Lacy said county taxpayers wouldn’t pay for day-to-day operations. He said a municipal utility would be able to obtain low interest loans and grants, be able to set aside money for a rainy day fund, and wouldn’t have to pay expensive fees for filings with the Public Utility Commission.
But customer Carole MacDonald said, “Somewhere down the road I’m a pessimist. I think if the municipal government takes over something it goes down the tubes.”
Hafen Scott told her, “We know if we were to sell to another private utility company they don’t always do the job right, do they?”
“As a family our concerns I think are similar to yours,” Hafen Scott said. “We’re landowners here in Artesia and in some of the surrounding properties. We’re going to be here a long time. So how this utility operates is going to be just as important to us as it is to you because if it’s not operated properly it’s going to affect what we do in the future with the land holdings we have.”
Hafen Scott said they’ve been meeting with operators of municipal utilities around Nevada to get advice.
“Our goal is to find a way to structure this so it operates well for the next 40 or 50 years,” Hafen Scott said. “We’re making a commitment for the next three to five years to develop a resource within the county setting to make this work right.”
Developers paid construction fees for the infrastructure so it would be ready when they need to build houses, leaving excess capacity, Hafen Scott said. Otherwise it can take two years to get permitting, she said.
“This end of the valley is the key for economic development. The utility structure is here. As soon as this economy picks up, this end of the valley will develop first and that’s important for everybody sitting here. As development goes, so goes the value of your homes,” Greg Hafen said.
Carole Roelofs said she receives sewer service, but has a well, which doesn’t require her to obtain water service from Pahrump Utility Company. She had concerns her well would be metered like the state monitors their common areas.
Hafen Scott said the water operations and the sewer operations will be totally separate budgets within the county and probably separate enterprise funds.
“It will not operate any differently,” she said.
Hafen Scott mentioned the possibility of the county obtaining economic development grants for an industrial incubator. She said if the economy picks up, Pahrump Utility Company is ready to serve 8,000 to 10,000 customers today with its excess capacity.
Nye County Commissioner Gary Hollis said he approached the Hafen family with the suggestion the county get into the water and sewer business. He referred back to a construction shutdown during the boom years due to a lack of sewer capacity by Utilities Inc. of Central Nevada.
“We didn’t see the hand writing on the wall and we were 600,000 gallons over capacity. We don’t want to see that in the future,” Hollis said.
Hafen Scott said a management company manages the utility. It is the intent for that company to contract with the county, she said.
Commissioner Dan Schinhofen, described as the swing vote on the commission, said the acquisition wasn’t yet a done deal, He said, “If it happens. They don’t have three votes yet.”