The West Wendover city council may have avoided a a $2.4 million purchase of a near bankrupt gas company last week but put the city in legal jeopardy for much higher fee in the form of a lawsuit from Wendover Propane owner Nancy Green.
“I was shocked by the vote,” said Wendover Gas Trustee Steve Shute. “It was certainly unexpected and I can’t explain it.”
There can only be one of two explanations for the vote, said one public official extremely close to the issue. One this council is incompetent or two they never intended to go along with the purchase in the first place. “Whoever was calling the shots was playing Nancy,” he said
In a dramatic turn of events and a 3-2 vote the West Wendover City Council killed the Wendover Gas Company purchase in last Tuesday’s council meeting.
Long time opponents of the $2.4 million purchase councilmen Izzy Gutierrez and Gerado Rodriguez were joined by Roy Briggs previously one of the project’s biggest boosters to kill the plan.
While Councilman Saul Andrade another supporter of the purchase voted against killing the project, his refusal to second an earlier motion to go ahead with the purchase opened the door to the kill vote.
It was a year ago that West Wendover City Manager approached Wendover Gas about the purchase of the financially troubled company.
Up until that moment Melville was not considered the company’s best friend. Less than three months before the City Manager asked that the council approve taking legal action against Wendover Gas for nonpayment of its franchise fees.
The council refused and instead gave Green a four month extension to make good on her debt which she did. Before that Melville and other city officials ran an on again off again campaign to take over the gas company on the grounds that it was nearing insolvency.
Green always beat those efforts back and one way or another always managed to make it through the winter still standing.
During that time Green’s best ally was then Mayor Donnie Andersen who not only defended her fight to stay in business but also tried to get a reinterpretation of West Wendover’s franchise agreement to her benefit. While that effort failed Andersen never stopped being a supporter of Green until the world turned upside down in March 2012.
With the offer to buy on the table the antagonistic relationship between Melville and Green flash evaporated while Andersen support withered.
“Its kind of hard to support someone staying in business when they decide to sell out themselves,” he explained Wednesday.
Instead Andersen became one of the chief opponents to the purchase stating that it was too expensive and that this was an issue for the market place rather than government.
The biggest change in attitude came from Green.
As late as December 2011, Green appeared before the council and railed not only at Melville and the city council but also at the Peppermill corporation and its refusal to use her pipeline system as the reason for her companies fiscal woes. it was not a new speech, it previous confrontations with the council Green frequently accused the local gaming giant of boycotting her company.
Green’s tirades against the company even prompted Peppermill CEO Bill Paganetti to pen a letter to the Advocate disputing her claims that was published a week before the purchase offer was made.
After the offer Green went silent. No longer the plucky business woman fighting city hall and the big corporations to save her family business, Green became an active participant in what she believed was her financial salvation and the dismantling of her company.
And where before Green fought tooth and nail to keep the city out of her business last November she beseeched the council for help to keep the gas flowing.
At least four and perhaps six times the city came to the rescue purchasing loads of propane for Green and her customer. The purchases totaled so far some $60,000 for 37,500 gallons of propane.
“It is hard to say whether she could have one without the city’s help,” Shute said. “It was a brutal winter but on the other hand she made it through other winters somehow. Wendover Gas’ primary problem is cash flow. It has to pay up front for inventory it will see a return on 90 days later.”
But while those emergency loans came in handy for Green they apparently did not come cheap.
According to her own attorney Jeffrey Crockett whether Wendover Gas is purchased or not the company will cease to exist before next winter.
“The PUC have been watching the situation carefully,” Crockett told the council by telephone two weeks ago. “If Nancy cannot find an alternative plan, we will have the transition for her customers to switch to propane tanks this summer. There will not be another winter like this.”
“The PUC cannot stand idly by and allow the situation to continue” he added.
If the council had voted to buy the company the any action from the PUC would have been rendered irrelevant. However if the kill vote stands or even if the council takes no action, Green could have a case that the now year long process was nothing but a sham designed so that she would so damage her company that its potential bankruptcy became all but certain.
If she is somehow forced to close whether by PUC action or through bankruptcy and the company assets are auctioned off at well below market value to the city, she would be easily able to answer the standard question in asked in every conspiracy “Who benefits?”
And in Green’s case the savings the city realizes from buying her assets on the court house steps rather than purchasing them from her might be so great that proving a motive may be unnecessary.