Fireworks fly over Willow Creek

TONOPAH -- Nye County commissioners voted unanimously Tuesday to participate in the bankruptcy plan for Willow Creek Golf Course, including a $100,000 payment for permanent park easements on six of the 15 parcels being acquired by Utilities Inc.

But a last-minute letter read into the record by Ken Wolcott, representing Utilities Inc. of Central Nevada, objecting to statements made in a recent court filing by District Attorney Brian Kunzi about UICN, revealed a deeper discord over the agreement between the county and the private water utility than previously made public.

Wolcott’s letter referenced Nye County’s opposition to a motion made last week in the federal bankruptcy case of Caldera P&G, owner of the defunct golf course, that would have stricken from a confirmed Chapter 11 plan any mention of the county taking possession of six park easements on six parcels of golf course property.

The July 26 motion called for UICN to pay the bankruptcy estate the $100,000 fee and simply keep its easements.

On Monday, Nye County filed an opposition to that plan and suggested that UICN had acted in bad faith during negotiations with the county. The argument simply states that UICN consistently refused to address one key county concern — that the county would not be given water rights to the six easements it would be responsible for under the bankruptcy plan.

A first draft of the easement plan to be presented to the bankruptcy court was provided to Nye County officials on May 1. By May 24, according to the court filing, the county was making its concerns over the water rights known.

“We made it clear during negotiations that we expected to receive the right to use the water and treated effluent rights on a pro rata basis. We would be willing to use as much effluent as possible. What troubles me about the document is that the County is expected to operate the pond system and maintain the ponds located in the easement area, but not be given the right to use that water. In order for the treatment facility to operate, the water needs to go somewhere. The County will not operate your system, maintain your ponds and pay for the water you need to dump onto the ground,” the county’s response to the initial plan states.

On May 29, UICN responded that the plan was still “workable,” hinting that an agreement could still be reached.

The county was forced, however, to respond to a second draft of the plan on June 6. It, too, left the question of water rights open-ended.

“I have some changes to the latest draft you sent, however, there is a lingering question to which I need a straight answer. UICN seems to be insisting that the County will be required to acquire water rights for any use that may be required on the easement property. If this is their position then there is no need to proceed any further as the County will not participate in this effort to keep this bankruptcy plan together,” Kunzi wrote as part of the county’s response then.

On June 11, Wendy Barnett, UICN’s regional director, told Nye County Manager Pam Webster that the water rights go with the land and therefore there was no need for confusion. Two days later, the utility’s Las Vegas attorney, Laura Granier, told county officials that UICN could provide “water credits” for the easements.

Kunzi told the Pahrump Valley Times Tuesday that the suggestion was laughable. He suggested that UICN is playing games because they want to keep the water rights for themselves so that they can turn some of them into discharge credits that can be sold.

“They can sell those recharge credits while they can’t sell the water rights off the golf course. They want to sell the recharge credits and ultimately they felt the county’s participation in this would interfere with their plans,” he said.

There are $8 million worth of water rights underneath the 174.28 acre former golf course.

Those water rights are nearly useless unless the landowner can develop the land. But UICN would need the county’s cooperation to rezone any of those parcels in order to do so.

UICN responded to the county’s opposition Tuesday in court. The utility made its own allegations, including that the county had dragged its feet and forced the trustee to attempt to modify the Chapter 11 plan.

“After months of inaction and silence in the face of continuing requests for responses from UICN and the Trustee, Nye County now, incredibly, spins a story to the Court with no evidence to support the bald and unsubstantiated assertions of its lawyer, arguing that UICN has acted in bad faith and should now be (unlawfully) forced into material changes from the agreed upon terms for the proposed County Easement. The County requests the unlawful relief that a regulated public utility be forced into either conveying its assets (water rights) or the unfettered use of those rights to the County or providing ground water for free to Nye County,” UICN’s response states.

The utility’s attorneys called “fantasy” the claim that UICN was resisting the county’s bid for water rights to the easements so that it could better turn a profit on discharge credits.

“The County’s incredible spin on things including that UICN could somehow ‘profit’ from the proposed plan is nothing short of fantasy. Indeed, the evidence shows UICN’s continuing efforts to implement the approved plan. In addition, it is beyond dispute that UICN itself could not ‘profit’ from anything. Even assuming, solely for the sake of argument, the County’s fantastic story of what UICN ‘planned’ on doing with discharge credits and water rights was true (which it is not), any ‘profit’ would be passed on to UICN’s rate payers, not retained by the utility, as required by Nevada law,” the utility’s court filing stated.

Kunzi said the whole matter was disturbing to him. He said a third party to the settlement also stands to lose out if the county pulls out or is forced out. Michael Zucaro, a money lender, is set to take possession of the golf course’s 9.1- acre clubhouse parcel. The settlement agreement calls for the county to rezone that property, providing more value to Zucaro by allowing him to develop a commercial project on the site.

“If you’re kicking the county out of this plan, the county has no incentive to do the work it was going to do and, frankly, there won’t be any value to Zucaro’s interest,” Kunzi said.

Commissioners finally got to weigh in on the matter Tuesday, but did so out of public view. They discussed the matter in a 45-minute “non-meeting” requested by the district attorney. Commissioners didn’t make any comments afterwards in a brief open session. Commissioner Dan Schinhofen made the motion to approve the agreement, which was seconded by Commissioner Lorinda Wichman.

Commission Chairman Butch Borasky told the newspaper their consent to the bankruptcy plan was all conditional upon being accepted by the bankruptcy court, which is scheduled to hold a hearing today in Las Vegas.

“We don’t know if it’s going to go through or not,” he said. “I have no idea what’s really going to happen. We’re just trying to look out for the residents in the area, do what we can to salvage what we could out of there.”

The golf course, which has been closed since November 2008, has reverted back to desert in most places.

The agreement calls for the county to take possession of the parcels for park and recreational purposes. The county’s use of the parcels may not interfere with UICN’s use for discharging treated effluent. UICN would have the ability to approve any proposed development in the county easements. Nye County will also be required to maintain the ponds on their parcels. Borasky admitted the county could have some costs in that maintenance but didn’t have any cost estimates.

Nye County will have the first priority right to treated effluent from the Willow Creek sewer plant, once Lake View Golf Course is furnished its 435,000 gallons per day, under the 2000 Tri-Partite Agreement. The plan calls for the county to be responsible for transmission of the treated effluent from the sewer plant.

Utilities Inc. is taking possession of 15 parcels based on a $1.7 million debt from various court actions against former Willow Creek golf course owner Jim Scott and his company, Caldera P&G. The bankruptcy plan said Nye County could use the parcels for park space or even sports facilities.

The acquisition by UICN is dependent on approval by the Public Utilities Commission, which still hasn’t rendered a decision, and the approval of their discharge permit for the sewer plant at the former golf course by the Nevada Department of Environmental Protection.

Zucaro wants to do something with the clubhouse, currently used by Shadow Mountain Christian Fellowship. Beyond that, Borasky said, “we’ll see who winds up with whatever out of it because again it’s going to be up to the trustee and the courts when they end up fighting about it.”

Finally, late Tuesday, sources told the PVT that a movement may be afoot to urge the bankruptcy trustee to simply liquidate Willow Creek’s 16 parcels. One county official agreed that if such a scenario occurred, Nye County would be in the best position to acquire the entire property.

PVT staff members contributed to this report.