County Commission News

NET PROCEEDS CONCERNS

To understand Eureka County’s concern with how Net Proceeds from Mining are collected and distributed, understand the changes in procedure that have impacted the County. With SB2 how the tax is collected did not change; however, when the tax is collected did. Now, come March 1st, mines must submit a Calendar Year Project Report based on NRS 362.115 and 4th Quarter payments for the preceding fiscal year payments are due. Then, in May, Net Proceeds Taxes due for the previous calendar year must be paid as well as in that same month, mines must make payment due on that year’s 1st Quarter ‘Report of Estimated Taxes’ Due. In July, mines file their 2nd Quarter Report of Estimated Taxes Due and are expected then in August to make a payment of 2nd Quarter Estimated Taxes Due. Likewise, at the end of October, mines are held to a 3rd Quarter 2012 Report of Estimated Taxes Due and in November must pay those taxes. Come January of the next calendar year, the 4th Quarter Report of Estimated Taxes is filed and in February the previous Calendar Year Gross Yield & Net Proceeds Statements are due and payments for the 4th Quarter of the previous calendar year Net Proceeds Tax must be made. With a resolution having passed the Nevada Assembly to remove the mining industry’s net proceeds tax cap from the state Constitution, the proposal will be on the November 2014 ballot. As Nevada’s constitution currently caps net proceeds on minerals at 5%, critics of the industry hope eliminating the cap will somehow enable getting more benefit from the billions of dollars in profits the mine’s reap from the state’s nonrenewable resource.

Net Proceeds have been big business in Eureka until now. Eureka led all the counties in Nevada in 2010 with 34.30% of Gross Proceeds of Minerals for the State, 43% in 2009.

On the 5th, the Commission discussed how to get support to return the Net Proceeds Tax to an annual end-of-year payment.
As Dorothy Kosich reported in June, 2014 in Nevada Mine Web.

“Lower gold prices, higher mining costs and declines in production have hit Nevada’s gold mines hard, which, in turn, is generating a $70 million deficit in the Nevada state general fund.

The state’s mining industry was projected to generate $93.4 million in net proceeds tax revenue this year, but net proceeds has produced only about $21.3 million in FY2014-15, members of the Nevada Economic Forum were told in a meeting Tuesday.

While state government is expected to be able to withstand the loss in net proceeds revenue, rural Nevada counties, school and hospital districts and other local governments may have a tougher time coping.

In a presentation to the state Economic Forum, comprised of financial experts who project tax revenue, the Nevada Department of Taxation projected that the rural counties [combined] can expect only $26.5 million in net proceeds revenue in FY2014-15. In 2013, counties earned $88 million from net proceeds.”

As Kosich noted, “Mining taxes for this fiscal year were paid in advance by several mining companies, using optimistic projections, making the situation even worse for rural counties and local governments.” The quarterly pre-payments have adversely impacted Eureka County as the mine’s estimations caused an overpayment that caused Eureka County to have to repay some $10 million to the State.

How to move legislation forward to return Net Proceeds to an annual end-of-year system was a topic of conversation at the Sept. 5 Eureka County Commission meeting: maneuvering the political playing field of the move. Not wanting to be a sole voice in a political environment that includes NACO, the Nevada Mining Association, the Department of Taxation, the Governor’s Office, etc., County officials strategized on how to move forward. Chairman Goicoechea suggested meetings with the Nevada Mining Association for a bill they could move forward and promoted talking to the Governor’s Office. Commissioner Ithurralde thinks it should be a NACO bill since it impacts “more counties than us.” District Attorney noted that the County faces the “timing of the catch-up year” created by the pre-payment system, which Chairman Goicoechea characterized as creating a “donut hole for a year in your budget.” Recorder/Auditor Mike Rebaleati pointed out, “One thought I had yesterday is they could blend it to cover that hole because you’re actually talking about 23 months,” something “something blended between the pre and post.”
Chairman Goicoechea observed there are “major questions with this” and agreed with Commissioner Ithurralde that “it affects more counties” and added, “We don’t really know what this will be.”

Goicoechea expects “there’s going to be one big kitchen sink bill that deals with this” and believes “it’s going to pass. When that passes in February somebody drops a bill in the legislature.” Assessor and incoming Budget Officer, Mike Mears said he thinks there will be several which can be melded “into one bill everybody can work on.”

Mears related in a week he’ll be attending an assessors’ meeting where there will be a conversation to see if there’s an “appetite to meet with effected mining counties” so that Eureka, Lander, Humboldt, Elko, etc. can “get on board with one another. “

SENIOR CENTERS

Crescent Valley’s Fannie Komp Senior Center Director, Adell Panning, reported to the Commissioners that their freezer went down but they “caught it in town” and moved the food to the refrigerator at the fairgrounds concession stand. The break-down happened the Friday before Labor Day weekend and Snyder Mechanical came to the rescue. The theory is a power bump took out the freezer. The Center received a surprise random State Health inspection and got a 100% with no deficiencies and the troublesome walk-in freezer received a comment on how well organized it was. Panning reported the Center served 723 meals, or 34 a day, in the month of August. Turning to upcoming events, Panning reported that the Activities Coordinator recently resigned and with no one in the position, Panning herself will be unable to meet those responsibilities as she “can’t be in two places at once.” She’ll be approaching the Commissioners at the next meeting to “justify” filling the position. Panning noted the Back to School Party for Crescent Valley youth was a “great success” with the bounce house set up in the Community Center safe from the wind. The children played bingo and other games and Panning hasn’t “heard a single negative thing.” 50 children showed up and received backpacks with the excess pack packs taken to the elementary school and handed out to children that don’t have backpacks.

Millie Oram, Eureka Senior Center Director reported the Inspector Shirley Chantrell also appeared at her Center on September 3rd to do an inspection. A few things were found which have since been fixed. With two staff out, Oram has been in the “kitchen quite a bit.” The Eureka Center served 1055 meals in August, an average of 50 per day. The two centers combined deposited $9,509.32 for August.

ROAD DEPARTMENT

Raymond Hodson, Road Superintendent, reported the road crew has been blading in Diamond Valley and also spent a couple of days fixing wash-outs from the recent heavy rains. Hodson noted “a lot of water crossed Mustang Road” requiring repairs and culvert fixing as “pretty good water” came across Monitor and Roberts Road. In addition, the Road Crew spent some time on the fair which has “normally been a pretty big work load,” but Hodson noted the Fair Board’s “stepping up” and has gotten their own water truck for which the Road Crew provided an operator. The Road Crew did their “normal thing at the Fair including setting up panels. In addition, both the South and North End crews put down 41 tons of hot mix in Eureka and Crescent Valley with the Beowawe crew doing work on the Spa Road and the far end of Rose Ranch Road and Geyser and were running the mower quite a bit on Mary’s Mountain, Union Pass to the mouth of the canyon, Sheep Creek Road, and on the JD Road, mowing from JD to Alpha.

PUBLIC WORKS

Public Works Director Ron Damele reported that a final walk through was completed August 28th for the Robins Street Project with the notice of completion filed on the 29th and copied to all sub-contractors to ensure they’ve been paid. Sewers and storm drains are being vacuumed and Monday the final installation of fiber conduit will be completed. Damele noted that with the job substantially completed, there will be a drastic reduction in the number of people and equipment in Eureka.

SHERIFF’S DEPARTMENT

The request by the Sheriff Ken Jones and Under-Sheriff Keith Logan to fill a full-time vacancy in the County jail led to a long discussion about budget restraints.

Chairman Goicoechea said he “read you guys’ justification” and understands being down, but said, “We’re against the wall.”
Sheriff Jones responded, “What you might consider is closing the jail and farming this detention out to another agency” which would still require “transport to another facility” which Jones didn’t know whether that’s “economically feasible.” Jones expressed concern that understaffing poses liability risks and said, “I am relieved of it. I’ve made application here to replace those personnel that we need to operate that jail. If you decline to fill those positions, then when the lawsuit comes down, then I’m going to say, ‘Well, I asked. It’s their problem not mine….’ Jones reminded the Commission, “The liability is out there. In 2007 we had a young fellow who decided to commit suicide in the jail down there and our salvation was that we had someone there and on duty. If you don’t, you might as well get the check ready for a million bucks.”

Commissioner Sharkozy queried, “Isn’t this position already budgeted?

Jones continued, “I don’t mean to be chiding to you either” but wanted to lay those facts out to the board.” Jones noted he has a “little experience dealing with those things. Those are facts. When that lawsuit comes down you could have the court taking charge of that jail then they would order and dictate to you how many staff you’re going to have there and be required to do to operate that jail. You don’t want to go there, for sure.”

The Under-sheriff pointed out, “What are the ramifications if you don’t fill those positions and identify those possibilities?” He pointed out that to be compliant with The Prison Rape Elimination Act “the only way to gain compliance” is “by us having the five people in dispatch and five people in the jail.”

Jones noted, “Those unfunded mandates keep coming and coming and coming” and said the Department is “playing catch-up as it is.”

Logan pointed out that when patrol personnel are used to cover the jail when an emergency happens it can lead to inability to fulfill required jail and patrol tasks. He noted that recently inmates were delivered “here to us at the same time that a citizen reported water over the roadway severe enough” to cause a “public hazard;” and the Department was “delayed responding to the hazard because were inputting seven inmates into the jail.” Logan called it a “balancing act,” and noted he’s worked 26 days of the last month.

Logan noted, “If you’re concentrating on two different tasks, at some time one of them or both of them suffer; you go back to deal with the jail, forget, respond to an emergency and do things.” In addition the jail staff and patrol staff are at two different pay scales and it’s “difficult to arbitrarily transfer them.”

Jones said, “Thank God I only have 120 days left.”

Ithurralde pointed out that the new jail deputy proposed being hired “would be the first one to go.”

Jones pointed out, “This agency has not grown since 1983.”

Goicoechea said, “If we weren’t covering with overtime from our patrol guys,” he “wouldn’t even be thinking of filling this position” and added, “If this is approved, do not bring that fifth position.”

Logan said they would “work to find that solution and hope to report that this is working.”
Jones said, “I’ll say what’s on my mind, but I don’t ever mean that in any sense other than trying to provide that service to the people of Eureka County.”
Logan assured the Commissioners they will “think as far away from the box as we can get.”

Commissioner Sharkozy motioned to waive the hiring freeze for the submitted position by the Sheriff’s office and to approve the regular full-time position for a deputy sheriff-detention while leaving one position vacant. Commissioner Ithurralde seconded and all 3 commissioners voted ‘aye.’

Commissioners approved:

Acknowledgement of Certificate of Achievement for Excellence in Financial Reporting awarded to Mike Rebaleati and Eureka County by the Government Finance Officers Association;

Adopting a resolution approving 2014 Eureka County Comprehensive Economic Development Strategy and signing letter authorizing submission of the CEDS to the US Economic Development Administration;

Adopting the Nevada 150 Proclamation in recognition of Nevada’s Sesquicentennial Celebration and 150th Anniversary of the Town of Eureka;

A water and sewer application for new service from Dennis Cunningham located at 300 O’Neil Avenue in the Town of Eureka;
Accepting the updated Medical Clinic Service Request form, as amended, for services requested from local medical clinics administered by Nevada Health Centers, Inc.;

Adopting a resolution regarding Eureka County’s 2014 Private Activity Bond Cap allocation, in the amount of $107,244.04;
Signing a modified Joint Funding Agreement with US Geological Survey for the Diamond Valley Flow System Program to add $26,397.00 of Federal Matching Funds from the Cooperative Water Program with no additional funding required of Eureka County;

A water and sewer application for new service from Dennis Cunningham located at 300 O’Neil Avenue in the Town of Eureka;
The updated Medical Clinic Service Request form, as amended, for services requested from local medical clinics administered by Nevada Health Centers, Inc.;

Signing a modified Joint Funding Agreement with the US Geological Survey for the Diamond Valley Flow System Program to add $26,397.00 of Federal Matching Funds from the Cooperative Water Program with no additional funding required of Eureka County;

The Sheriff’s Department finding out if there is any benefit to the County by participating in a court-authorized class action lawsuit related to US Foodservice, Inc., Pricing Litigation;