Sunday, March 20, 2005
Copyright © Las Vegas Review-Journal

End of pollution control program upsets businesses

Companies that paved roads at own expense want credit for their work

Clark County has closed the book on a poorly run air pollution control program founded by the Health District, but private industry wants it reopened.

The Las Vegas Paving Corp. is sitting on several thousand county credits it earned through the now-defunct local road paving credits program. The program, created in 1987 and ended this month after years of mismanagement, issued companies credits for paving high-use dirt roads at their own expense.

Those credits -- now essentially worthless -- were sold or traded to other companies or earmarked for future use to offset local dust emission requirements for a company's pending projects.

"Las Vegas Paving is interested in using the credits they've earned," said Dave Breault, the company's environmental manager, who handled its involvement with the paving credits program. "If we'd known the program was going to go away, we would have stopped paving roads and used the credits we'd already banked."

The value of the credits issued by the Clark County Health District fluctuated at the whim of supply and demand. During his involvement with the program, Breault said he saw the value of a credit range from $315 to $450 when selling it to other parties.

One credit was good for mitigating one ton of dust emissions. At the time of the program, companies were required to mitigate twice as much dust as a project produced. So if a project was expected to generate four tons of dust, the county required a company to cash in eight credits.

Although it sounds fairly straightforward, a recently completed county audit of the former Health District program found a serious lack of internal controls, missing files and questionable record-keeping, which made it impossible to establish a complete picture of what transpired over the life of the program. Hundreds of companies participated in the program, and the health district was supposed to keep track of millions of dollars in transactions.

"There was a lot of confusion with operating the program and I think it's run its course," Breault said. "But I also think it did really well for what it was intended to do -- it paved a lot of roads."

Some of the projects undertaken by Las Vegas Paving under the credits program included stretches of Ann Road in North Las Vegas and College Drive in Henderson.

The disarray of the health district's program became a focal point for state lawmakers and ultimately led to its takeover by Clark County, which placed it under the newly formed Department of Air Quality and Environmental Management in 2001. The paving credits program was then placed on hiatus, with no further credits issued.

Michael Uhl, principal management analyst for the county's Department of Air Quality and Environmental Management, said a March 1 action of the Clark County Commission effectively ended the program, leaving the credits without value. In addition, the audit showed that health district records were incomplete and spotty. That made it difficult to determine basic facts, such as how many credits were issued over the life of the program and to what companies.

"The audit trail is basically nonexistent," said Uhl, who has been overseeing the sunset of the paving credits program.

Breault said he was interested in starting talks with the county about the issue of outstanding credits. He declined to comment when asked if his company would seek legal recourse.

In contrast to the health district, Breault said Las Vegas Paving has tracked all its paving credit transactions. He also questioned how the public records could be so incomplete since, to his knowledge, the health district issued transaction numbers to every credit issued or sold. Even the sales and purchases of credits between private companies were reported to the health district, so it could transfer the credits from one company account to another.

"The county may have a lot of missing files, but because we were dealing with something that had monetary value, we have records of every road we paved under the program," Breault said.

Breault also questioned the audit findings that criticized North Las Vegas for using Las Vegas Paving on projects for the credits program. County Director of Internal Audit Jeremiah Carroll II wrote in the audit that he believed the projects should have gone out for bid.

"Rotating the paving of roads among the various companies would have been a more reasonable methodology for awarding contracts," Carroll wrote in the audit. "The current process gives the appearance of favoritism."

North Las Vegas issued the credit projects to the first company that expressed interest in the work. As it turns out, so did Clark County. Bobby Shelton, spokesman for Clark County Public Works, said they used a similar way of allocating the paving projects for credit -- the work went to the first responder.

Breault wondered why it would be necessary to bid projects companies had to pay for themselves. North Las Vegas Mayor Michael Montandon made a similar point, saying the city couldn't bid the paving projects in a conventional manner because there was no money involved.

"There was no favoritism," Montandon said. "From what I saw, there wasn't enough time for there to be favoritism. If there was a problem, it was with the way the Health District did it. For us, it was about getting free paved streets. We miss it."

Montandon said North Las Vegas received notices from the Clark County Health District of particular paving projects that could be completed under the program. The Health District also provided the city with a list of companies who were looking for local road paving credits.

When a road was identified, Montandon said, the city would notify the companies on the list via fax, with the first respondent getting the project.

"If there's no money involved, the bid is all about the timing," Montandon said.

At one point, Montandon said he did question why so many of the credit projects went to one company. But in speaking with other municipalities participating in the program, Montandon said he found Las Vegas Paving was getting their projects as well.

As it turned out, Montandon said, Las Vegas Paving had designated full-time staff whose sole responsibility was responding to these environmental requests.

"Maybe it is best if the program just disappears," Breault said. "I think it's been beaten up so much there's no trust in it anymore."

Review-Journal writer Juliet V. Casey contributed to this report.