The Overton Power District #5 Board of Trustees voted to approve the second half of the rate increase approved in 2011. The move followed a somewhat tense public comment period and a temporary closure of the meeting for an executive session with the district’s legal counsel, Byron Mills.
During that public comment session four Mesquite residents made statements. Barbara Ellestad of the Mesquite Citizen Journal opened the session. She presented the board with copies of a May 2010 letter from the Nevada Attorney General’s office relating to term limits. She indicated that the decisions stated in the letter would apply to Craig Anderson and David Anderson, two board trustees whose terms of service on the board appeared to violate the 12-year time limit.
She provided the board with the written decision: “NEV. CONST. art. 15, § 3 prevents a person from being re-elected to a different seat of the same local governing body on which he has already served 12 or more years.”
She then requested David Anderson and Craig to recuse themselves and that the vote on the power rate increase be delayed until after the legal issues related to their terms of office was settled. She also requested that Mike Featherston and any other board members who had “direct fiduciary gain” in the outcome because he had ownership in an irrigation system recuse themselves since they were part of “one class of customers who would be exempt from this rate increase.”
Ellestad said she “is pursuing a legal opinion on the validity of all decisions made by this board since the original time that Mr. Craig Anderson and Mr. David Anderson exceeded the Nevada Constitutional for time served on this governing body.”
John Taylor from Mesquite presented the board with a list of “unanswered” questions from the Mesquite workshop. They included asking if the board would consider more cost cutting measures like pay cuts to the board members, cutting salaries by 10 percent, cutting staff and freezing all unnecessary travel. He also asked if unauthorized credit card charges would be reimbursed to the district, and that all rate payer are treated equally and any increases … be administered “across the board. He also called for more transparency suggesting publishing more documents on the website. He provided a list of his questions to the board.
Doug Wofford from Mesquite also requested the board delay its vote, and Dave Ballweg, appearing on the teleconference feed from Mesquite, indicated he felt they had not done their “fiduciary duty” by not holding public hearing instead of a workshop in Mesquite. He said he thought the vote should be delayed until the “validity” of the board could be established.
When the public comment session concluded trustee Mike Wilson suggested the board move on to Item K, the executive session, a closed session in which the board can discuss legal issues with their council Byron Mills.
NRS 241.015(2)(b)(2) allows a public body to meet with its legal counsel “To receive information from the attorney employed or retained by the public body regarding potential or existing litigation involving a matter over which the public body has supervision, control, jurisdiction or advisory power and to deliberate toward a decision on the matter, or both.”
Following that session, attorney Mills suggested that David Anderson and Craig Anderson should recuse themselves from voting on any business until he could contact the attorney general’s office. He noted that a Supreme Court decision related to the issue may have occurred since the March 2010 letter and he wished to confer with the assistant attorney general. He also noted that John Featherston had no vested interest in or shares of any irrigation company and need not recuse himself.
The final issue he discussed with the board related to e-mails. “It’s my understanding that you have all received anonymous e-mails. I would direct you all to forward those e-mails to management.” He went on, “I understand at this point there have been no threats of violence…if at any point any if those e-mails whether anonymous or not are threatening in nature, of violence to you, to your families, to the company, to the employees, management, anything of that nature…that becomes a very serious act and is a crime, a Federal crime. …Don’t blow it off.”
The board then returned to the agenda and brought up the rate increase for deliberation. During the discussion it was noted that the Cost of Services study was required by their lender to determine if their revenue was sufficient to meet their bond and loan requirements.
“These rates are intended to recover funds sufficient to meet our debt service…(if we do not raise rates) The bond holders and Property Finance Corporation then have the right to seek a court decision to change those rates.” He went on to explain that if they continued to make payments without missing a payment, the district would not be in “material” default but that the lender might still seek to take action. Attorney Mills added, “If you chose not to raise the rates, you could ultimately be forced by law whether you liked to or not…to meet that debt service.”
OPD5 General Manager Delmar Leatham explained further, “One thing that has driven this process is the down rating by the credit institutions. Because we delayed the full rate increase (of 8%) in 2011 we were down rated by the credit agencies.” He noted that if they were forced to raise rates by the courts that action would have an additional impact on their credit. “If you’re not going to borrow money, do your really care what you’re credit rating is? It’s an indication of how well your company is doing and you certainly want to keep a healthy view in the market. So it’s my recommendation to go ahead and adopt these regulations as identified.”
Using a comparison sheet of existing and new rates Leatham explained, “In the case of the irrigation and general service customers, I am not recommending a change to either of those (rates). The Cost of Service study clearly indicates that those customers were paying all of their cost to serve. They are meeting their obligation. The Cost of Services study did not indicate a need for an increase in those rates.” He went on to note that if the board felt it was necessary to make some increase to those customers, that they might consider increasing the customer service charge.
He also touched on the issue of “pancaking” rates aired in the Mesquite workshop. He explained that when they raised rates on municipal governments like the City of Mesquite and the Virgin Valley and Moapa Valley water districts, that those agencies passed the costs through to their customers. He suggested that the board consider keeping those rates at their present levels to reduce the impact on the citizens.
During the board discussion it was noted that OPD5 had not imposed the full rate increase in 2011 in the hope that there would be increase in usage that would reduce the amount needed to meet their requirements. Although there has been some increase it has not been sufficient to cover the additional 4.5 percent needed by the district.
The board voted to pass the increase. The vote was five members in favor with two, David and Craig Anderson, recusing themselves.