What was supposed to be a forum for public input on Overton Power District #5’s proposed power rate increase became a question and answer session between OPD’s district general manager Delmar Leatham and the citizens of Mesquite.
Nearly 100 people attended a workshop held by Overton Power District #5 on September 12 at Mesquite City Hall. Leatham opened the meeting with a presentation outlining the expansion of the power district’s distribution system. He explained that in 2005 the district was nearing its capacity to provide power to Mesquite. At that time the district hired Electrical Consultants, Inc. to evaluate their system and outline what additional facilities would be needed to meet future power demands. They also directed ECI conduct a Cost of Services study to determine what future rate increases would be needed to pay for the upgrades proposed.
Leatham also outlined some of cost cutting measures the power district’s board undertook as the economy began to slow down. Those efforts included but were not limited to the elimination of temporary positions, elimination of one full-time position, elimination of future hires, implementation of a wage freeze, termination of consulting contracts, and adjustments to employee pay and benefits, and the planned retirement of several upper management individuals.
Leatham explained that, “Myself and 3 other employees, within the next two years, will resign or retire from Overton Power. And those positions while someone within may be promoted to fill those there will not be an outside person hired. The overall work force will be reduced. That planned retirement program is part of our on-going cost reduction program.”
The first comments following his presentation were actually questions from a local member of the press who questioned when and how Leatham’s retirement package had been agreed upon. He responded indicating that he would answer that in his closing remarks after the comments. It was apparent by disgruntled reaction of the audience they did not want to wait for an answer. Leatham deferred and provided an answer immediately, altering the meeting format from a public comment platform into a question and answer session.
Leatham explained that the board had approved the action three years ago in August of 2010 retroactive to July 2010. He then read the motion which was made and approved under which he gave up hundreds of hours of vacation and sick leave time and some future benefits for a pay from approximately $160,000 to $200,000 a year. He did note that the increase was in line with other electrical utility managers across the country.”
Leatham then went on to answer a variety of questions ranging from small “burr under the saddle” questions relating to individual power bills, to more significant inquiries related to the financing, expenditures associated with the construction, and to term limits for the district’s board of directors.
Some of the questions and answers included (paraphrased):
Why doesn’t the dollar amount on the infrastructure construction you shown at the meeting equal the $15 million the district borrowed? Where is the rest? The general manager explained that only the major components of the expansion were included in the power point presentation shown at the meeting. Some small elements of the projects related to the system were not included. Also the district is required to maintain a reserve to address future payments and expenses and several million was set aside to meet that requirement.
Why wasn’t the work curtailed once the economic downturn occurred? Leatham explained that the study for the expansion had occurred in 2005-2006 during thriving times. When the downturn occurred, “We had the bonds. We did look at returning those but that was not a good option in the bond market…so we looked at where we believed Mesquite would be five years from now….We had a two-edged sword. One is meeting existing loads, our system was not at capacity but it was near capacity. So we had to address that as well as what we believed future growth would be.” He went on to say that in hind sight they might have done something different.
He also added that OPD employees did much of the construction on the existing system. “Not making the transformers, but building the pads, the switch gear, and the infrastructure the transformer sits on.” When asked in a follow up question if that (work) was normally bid out, he noted, “That’s an option … those are public works jobs and they typically cost 30% more to do. You have the right to do them in-house. So we did that to save money and make those dollars go as far as possible.”
Did OPD evaluate the proposed construction to see what could be delayed? Leatham noted that a second transmission line from the Tortoise substation to Mesquite had not been constructed. He also explained that they had a 10-year plan and that some portions had not yet been constructed and would probably not be constructed until the demand for power began to increase. He added that because of the length of time required to complete such a project some aspects, such as obtaining right-of-was and permits were on-going.
Wondering why in the past why it’s been difficult to get information from you folks? Leatham explained, “If there’s a request for information that comes to us we respond in a timely manner.” When questioned as to “what’s timely” Leatham explained that the type and amount of documentation requested effected the amount of response time to prepare the data. Large items such as contracts or information which must be obtained from the archives required more time to prepare than readily available information.
When asked about the charge for such data he indicated that there was a per page charge for copies but that all the data was available for review at their office. Or bring your own copier.
There were a number of questions on transparency and the difficulties obtaining information from OPD including why there was not more information on-line since the board had voted in Nov 2011 to include links to meeting agenda items? Agreeing with the criticism he explained, “I think we have done more of that lately. We have started a web page following that direction and the agenda typically was posted there. You’re correct, not all the links have been developed yet but that’s an ongoing project. We’re certainly motivated to provide more information on that site. Our efforts for the last month are to provide those items that are germaine to the rate increase. We’ll certainly see that more and more of the board minutes and check registers and stuff is available.”
A question related to the impact of term limits on the board members was also brought up by a citizen who felt members might be in violation. Leatham explained that the question was being addressed by the Nevada State Attorney General’s staff and that the board would abide by any decision passed down by that office.
Several citizens who serve on other local governmental boards also made comments.
Kraig Hafen, a member of the City Council spoke to the meeting as a citizen and not in his capacity as a council member. He stressed his concerns over the seemingly unequal treatment of customers related to the rate changes. “Overton power does not need to take the hit for the 3% that Mesquite pays. We’re the only rate payers in OPD that pay 3%. And this is from a citizen, and you can thank previous councils because this was put on back a number of years ago. I am trying to work on that. But that’s not an OPD charge folks, so those in Mesquite do not blame Overton Power for the 3% row fee.”
Hafen also questioned some statements and information contained in a September 6, 2012 article appearing in the Mesquite Local News. He noted that the article said there were seven irrigation customers in Mesquite and Bunkerville and asked Leatham who they were?
The only two the general manager could identify immediately was the city and the Mesquite Irrigation District. Hafen went on to explained for clarification that neither district had a meter with OPD. (He did not expand on where they got their power.)
He continued. “It would seem if you really do need the revenue that we otta not just sole source certain people and exempt them out… we otta look at everybody, if we truly need the dollar, whether we’re paying one dollar … 4% on one dollar, it’s the same across the board if it’s a million dollars. I think that’s something we need to look at. I think there’s been some good discussion and I appreciate you coming here…some of the comments…I put it on the city agenda because I was asked to put it on the city agenda. I’ll take the responsibility for not contacting you or any board members that it was on. It was to hear what the input was from the citizens. We had a lot of people show up and they had some concerns and I think they’ve been voiced tonight.”
Leatham agreed, “And I think in conjunction with the city- brought this meeting about and I appreciate the city coming in and facilitating this tonight and approaching us about putting this meeting on. I think it has been a positive… the city deserves some credit for making that happen.”
Hafen then went on to explain “From Kraig Hafen’s standpoint, the City of Mesquite is not trying to get into Overton Power’s business but there are some concern’s the residents have and I think it’s better to…let’s air them out in the public so they can be answered and get some clarification of things that are not factual and are factual and let’s see if we can move this thing forward. The last thing we want is for more businesses to leave ‘cause that costs us all.”
The audience response indicated they agreed and Leatham concurred, “I think that one of the things we also want to avoid is creating any kind of adversarial relationship between the various governmental entities. I appreciate the cooperation and the opportunity to cooperate with the city on this.”
Karl Gustaveson, president of the Virgin Valley Water District also made comments as a concerned citizen. “It’s coming out of our pocket book so we should have that right...” Karl Gustaveson – “The one thing I’m a little concerned about and that is transparency. I think it’s coming out over and over…I think part of the problem of transparency here is that 70-75% of your income is derived from this area…. It was assumed at that time, in fact I think it was said at that time (you expanded your offices in Mesquite) that there would be meetings held alternating between Mesquite and your offices in Logandale. Now we’re seeing two a year if they are really happening. I’m not sure they are really happening. …I don’t think you would have near as many angry people here this evening or people with so many questions, they would have been answered because you’d have more participation. But we’ve to go sit and look at a television and you’re on a camera at the other end, you’re not going to get a lot of participation. I think you owe it to the ratepayers in this area to be fair and have them here at least every other meeting.”
He went on to say that since they were paying travel expenses for the four people in Mesquite to go to Overton that they could do the same to have the board members from Overton come to Mesquite. He also noted that they were making significantly more than the members of the VVWD and other agencies. “I think it is time to be fair with this community…so let’s open it up so everybody knows what’s going on.”
OPD general manager Leatham noted their concerns. He also explained that one of the issues he would bring to his board was a request to consider the impact of increasing rates on other governmental agencies. He would like to look into options to reduce the impact of rates on other agencies so they would not have to pass the costs on to their customers.
Leatham invited everyone to the next Overton Power District board meeting in Overton at 4pm on September 19, to express their concerns and offer their suggestions.