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Apr. 10, 2009

County will fund study of Pahrump Utility takeover

By MARK WAITE
PVT

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TONOPAH -- Nye County Commissioner Lorinda Wichman stuck with her conviction government shouldn't get involved with private business, but she was the only one who voted Tuesday against spending $18,000 to $25,000 on a study of taking over Pahrump Utility Co.

County auditor Dan McArthur will examine the assets and liabilities of the utility, along with the profitability. To determine profitability, he will examine customer lists, rate structure, operating costs, approved rate increases and 2009 budget forecasts.

"I'm having a really hard time justifying this in my mind as being something we need to do. As everybody's probably figured out by now, I have a problem using county funds to enter into or even entertain the idea of entering into private business," Wichman said.

Pahrump Utility is one of the smaller private utilities in Pahrump Valley. Developer Tim Hafen asked the county to consider the takeover. The utility company serves about 650 customers in the southern part of Pahrump Valley including the Cottonwoods subdivision, Artesia and subdivisions started by Concordia Homes of Nevada and Beazer Homes.

Wichman said the situation is different in small towns like Manhattan, where Nye County contributed $500,000 toward $1.8 million in water system imrprovements to meet tough new arsenic standards for a system with 97 accounts, of which only 45 are active. In Pahrump there are competing private utilities, she said.

Wichman fears the county could be thrust into a situation similar to Pahrump Medical Center, the county's subsidy which has elicited complaints. She used the same argument to convince fellow commissioners to vote against spending $120,000 for the county match of a Pahrump Valley transit system suggested by the Southern Nevada Transit Coalition.

But Commissioner Gary Hollis resurrected the history of Utilities Inc., the largest private utility in Pahrump Valley, which he said "held us hostage for two years and stopped development" while iinfrastructure was being built.

"Any community that doesn't have sewer and water is going to fail. I truly believe that. Water is precious, and how you get rid of that is precious, and sooner or later I guarantee you somebody is going to dump all of those utilities on Nye County," Hollis said.

In 2007, commissioners rejected hiring Farr West Engineering to study a valleywide general improvement district that would take over the private utilities and provide water and sewer service. Hafen blasted the proposal at that time, saying it would cost $1 billion to acquire utility company assets and extend lines. He said the county could cherry pick the best assets of the private utility companies.

Wichman asked whether the takeover of this utility was a critical issue.

"Absolutely, if government doesn't have control over water," Hollis said.

Commissioner Butch Borasky said there are 15,000 approved lots for development in that part of the valley.

"If you say business can run better than government, I would ask you to look at Utilities Inc. and make that statement again," Borasky said.

Commissioner Joni Eastley asked Hollis, "What are we prepared to do if the feasibility comes back and says Nye County doesn't belong in the utility business because we're never able to turn a dollar on this?"

"Then we better not do it," Hollis said.

Wichman reminded Hollis commissioners made a statement to one of the communities that Nye County had no appetite to be in the utility business.

"I just want to remind you that what's good for the goose is good for the gander," she said.

* Speaking of Utilities Inc., the district attorney's office was asked to study a $68,372 bill from the company for sewer charges in May and June 2008.

The bill for the monthly sewer charges at the Pahrump jail, Nye County Parole and Probation, animal control and the county maintenance building for May and June 2008 calculates an average sewer capacity of 11,499 gallons per day. The county was billed for 7,000 gallons per day at $3.60 per gallon, or $25,200, and $5.50 per gallon for 4,499 gallons per day above that, or another $24,744.

Charges for the Pahrump Justice Center amount to another $13,332, which includes a charge of $23.19 per fixture for 50 fixtures and sewer plant capacity fees of $5.50 per gallon for 2,424 gallons per day.

Nye County Facilities Manager Bob Jones suggested paying $4,777 for a regular two-month sewer charge and disputing the sewer capacity fees and fixture charges.

"I want to know why we're paying this because it's a stale-dated bill," Eastley said.

Under county policy, bills should be submitted within six months.

"I do have a letter from them saying they may turn off our water on the 14th if this work is not paid," Jones said. "In the jail, I don't think port-a-potties would work."

Borasky asked if the law prohibited shutting off water and sewer service to a home or business. He called it "extortion tactics."










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