By Mark Waite
County Commissioner Lorinda Wichman said a couple of statements made to ratepayers of Pahrump Utility Company weren’t true, but the board still voted 3-2 to increase the contract for a law firm negotiating the possible county purchase of the utility.
Incoming commissioners Frank Carbone and Donna Cox voted against the request to increase the contract with the law firm of Kaempfer, Crowell, Renshaw, Gronauer and Fiorentino by $30,000, up to a maximum of $40,000.
“In the best interest of the welfare of the majority of the people in Pahrump, I can’t support this. I just think if the seller wants to sell something, the seller should bear the burden of the payments; it comes out of his pockets, not the taxpayers,” Cox said.
County Commissioner Dan Schinhofen asked if Cox attended a meeting of Pahrump Utility Company ratepayers where a majority favored the takeover.
He told Cox, “I kind of take umbrage that you speak for the majority.”
Former county commissioner Joni Eastley, whose term expired in December, had consistently cast the sole vote against contracts for the acquisition; she didn’t feel it was the county’s job to be acquiring a private utility company.
“Publicly, I believe that the users of this system have been misled in statements that were made to them that the rates for this service will not increase,” Wichman told commissioners.
If Nye County acquires the system, it will add procurement costs in time and money, she said. The county will also have to pay prevailing wages for any repairs that exceed $100,000 under the Davis Bacon Act.
“For those two simple reasons, I cannot imagine anyone would tell the public, or believe the rates would not go up. When was the last time you’ve seen the rates not go up any time you make a change?” Wichman asked. “I just want everyone to know that my bullshit meter is working.”
Members of the Hafen family sought to reassure ratepayers invited to a meeting at Artesia Community Center in September their rates wouldn’t go up if the county acquired their system. Pahrump Utility Company has 470 metered customers, all but six of them residences, but the system was way overbuilt before the construction business took a dive.
A large majority of ratepayers at the meeting thought Pahrump Utility Company was a good utility system and voiced support for the takeover.
Vicki Hafen Scott told the ratepayers developers were paying standby fees that built the infrastructure to service their subdivisions when construction resumes. The ratepayers would only pay their share of operating expenses to operate the plants.
County Manager Pam Webster said the $10,000 original contract approved in October with the law firm was a preliminary budget, initially to prepare a negotiation plan.
The budget was calculated based on an hourly rate of $325 by attorney Severin Carlson, but could change based on the Public Utilities Commission proceedings.
Mark Fiorentino, an attorney with the firm, was given a $50,000 contract in February 2011 to evaluate water and sewer needs, along with the possible county takeover of private utility companies. His work product was criticized by some officials who said the county’s staff could have completed a similar report for free.
County commissioners last April authorized up to $50,000 for Farr West Engineering to do an engineering evaluation of the utility company. They used left-over money in the contract last month to hire Farr West to do an appraisal.
County auditor Dan McArthur performed an audit of the system for $25,000.
Schinhofen wanted a cap of $40,000 Tuesday on the contract with the law firm in his motion of approval.
He said Pahrump Utility Company has to pay for studies too, the company had to pay $250,000 to get approval of a rate increase from the PUC.
“There’s also costs a private company would incur that we would not incur. There are tradeoffs there and I don’t think anybody said it will never go up, because the cost of living will go up,” Schinhofen said.
Resident Judith Holmgren submitted a statement the contract would only be legal counsel to the county manager’s benefit.
Commissioner Butch Borasky asked if this would be the last payment before the possible purchase; Webster said that’s the plan.
Nye County District Attorney Brian Kunzi said, “We are moving into the final stages of this. While anybody can’t predict the costs, as you know it’s very difficult to predict that, we’re at the stage where we see the finish line where we’re at.”