Reno Gazette-Journal from Reno, Nevada • Page 32

r2C Reno Gazette-Journal Friday, September 20, 1985 Dunes owner's financial troubles worry gaming panel No marathon meetings for Gaming Control Board in '86 By Myram BordersGazette-Joumai LAS VEGAS Nevada Gaming Control Board Chairman Barton Jacka said Thursday marathon board meetings would be averted in 1986 by scheduling two days of hearings instead of the traditional one. "It will be easier for the staff and for the people who participate," said Jacka. Jacka and Nevada Gaming Commission Chairman Paul Bible tentatively have agreed on a schedule that calls for two consecutive days of board meetings each month followed by a one-day commission meeting two weeks later. Jacka said more applications are being filed than ever before and the board has expanded the scope of its investigations. The board also is adding 58 additional agents.

"With the new agents we can look at more applicants at one time," said Jacka. Historically, the Nevada Gaming Commission has met one day a month and the commission meets one day the following week to take final action on board recommendations. The Sept. 11 meeting of the board in Las Vegas began at 9 a.m. and concluded shortly after 8 p.m.

The meeting was recessed until Sept. 18 when the board met an additional two hours to complete the agenda. The five-member Nevada Gaming Commission met in Las Vegas less than two hours Thursday to take final action on board recommendations. "You will find we are going to act much more quickly than the board because they provided us with a 550-page transcript," Bible said Thursday prior to the hearing. The commission is provided transcripts of board meetings in advance along with summaries of board investigations on each gambling license applicant.

The more thorough the board, the faster the commission concludes its business because there are few if any questions left unanswered, said one gaming spokesman. By Myram BordersGazette-Journal LAS VEGAS Nevada gaming offi-J cials expressed concern Thursday that bankruptcy filings by millionaire farmer John Anderson in California could affect his Dunes Hotel on the Las Vegas Strip. Gaming Commission Chairman Paul Bible said he is concerned anytime a gaming licensee files for reorganization I under federal bankruptcy laws, whether it concerns his gaming properties or not. Anderson placed his Carson Valley Land Co. in Chapter 11 last week in Sacra-; mento, listing $48 million in assets and $42.7 in liabilities.

The company assets include 12,000 acres of timber in Alpine County, Calif. 8,500 acres of agricultural I land in Douglas County, and a $4 million office building in Irvine, Calif. He filed for bankruptcy protection after three I lenders sued in California charging he defaulted on a total of $56 million in 1 loans. Anderson operates a farming empire out of Davis, which extends into Nevada, Utah, Arizona and Louisiana. He also is majority owner of the Dunes Hotel; owns the Maxim Hotel in Las Vegas, which he bought in 1980 for $60 i million; and owns the Station House in Tonopah, which he purchased for $8 million in 1982.

Control Board Chairman Barton Jacka meets with Anderson's attorneys today. "We've been concerned about the status of the Dunes for some time even prior to ties. The state sets bankroll requirements to guarantee payoffs to winners. Anderson sought protection under Chapter 11 in bankruptcy court in California in the wake of suits filed by Eureka Savings and Loan, Crocker National Bank and Aetna Life Insurance Co. Eureka charges in its $32 million suit that Anderson defaulted on loans, including the debt he incurred to buy the Dunes Hotel.

A letter of credit from Eureka secured Anderson's debt to Clifford and Stuart Perlman, who pumped an estimated $35 million into the Dunes Hotel before closing a $180 million purchase from owner Morris Shenker. The Perlman deal subsequently fell apart and the Florida brothers, founders of Caesars World waived $10 million of the debt in their $25 million buyout by Anderson. Anderson is the largest commercial borrower at Eureka, a troubled San Francisco Bay area savings and loan company taken over by the Federal Home Loan Bank Board last July because of loan problems. Anderson's attorney Ken Calfee said earlier this week that the Carson Valley Land Co. is independent of all other Anderson-owned operations.

Valley Bank of Nevada also has served notice to the Dunes Hotel that if the resort fails to make a $572,000 interest payment by Sept. 27 on a $68.6 million loan the bank could foreclose. Anderson's involvement," said "Jacka. "We continue to be concerned about the viability of that hotel property just as we are many others. "Our superficial review shows there does not seem to be any interconnection with (the bankruptcy filing and) Anderson's Nevada gaming properties," Jacka said.

"It is interrelated a little because of the letter of credit from Eureka Savings and Loan." Anderson obtained a $25 million letter of credit from the Eureka bank last year in acquiring an initial 41 percent Dunes Hotel ownership which he later expanded to a controlling interest by acquiring additional stock. "We all share a concern that this action in California might have an adverse impact on the ability of Anderson's) Nevada operations to do the' refurbishing or to maintain adequate bankrolls and adequate funds in any other operations," said Bible. Anderson is current on gaming taxes in Nevada and the casino cage bankroll at the Dunes is sufficient to meet state standards to guarantee payoff of winners, according to Bible and Jacka. "We would only take action when there is a direct involvement in the gaming properties," said Jacka. "For example, if (casino) bankrolls falls short we immediately would be directly involved." Nevada gaming agents make routine audits of bankrolls at all casino proper 1 1 i i i i i ft? i i i i ii i i 1 i i i a mi Counties warned of losses under change in labor act Marilyn REPAIR: Workers board up the windows of the Legislative Building Thursday after glass was smashed Wednesday night.

Division, said "there's a lot of overreac-tion to this act. "We're working hard to make this a non-threatening type of situation. We'll just go in and review the payroll records and interview employees." Reardom said some government employees such as executives, administrators and some professionals are exempt from the act, and firefighters and police personnel are allowed to work more than 40 hours a week if their employer files the correct forms. But he said firefighters and police still would be paid overtime if they worked more than 80 hours in two weeks. Richard Wagner, president of the Nevada District Attorneys Association, said "the big danger is in private lawsuits with disgruntled employees." Because of that danger, the association has formed an ad hoc committee with NACO officials to help the state and county deal with the lawsuits that may be filed, he said.

On another matter, conferees learned that counties are now competing for water that may not exist. The Las Vegas Valley Water District, which supplies more Nevadans with water than any other district, has contributed at least $400,000 to a 10-year, $17 million study of a "deep carbonate aquifer" under eight Nevada counties. Pat Mulroy, deputy general manager of the water district, said by the year 2000 the Las Vegas area "could have some fairly large scale" water supply problems. Because of that, they are hoping that some of the potential water in the aquifer would be allotted to their district. Carson City and Washoe County also have suffered water supply problems and would probably try to make claim on the aquifer water.

The limestone and dolomite aquifer, taking up about 50,000 square miles in the eastern third of Nevada, lies 3,000 to 9,000 feet below the earth's surface and could supply up to 100,000 acre feet of water each year. But some county officials said they are "afraid that if there is water there it will all go to the big counties." Nye County Commissioner Joe Garcia said "it looks like only a few counties will be holding the aces there's going to be a bit of a battle to see where that water goes." Roland Westergard, director of the Department of Conservation and Natural Resources, agreed, saying "it's going to be a heck of a refereeing job." But Westergard said the "studies of the aquifer have not been conclusive" and the expected vast amount of water under Nevada "might not even be there." By Laura MyersGazette-Journal MINDEN Local governments will experience "an administrative nightmare" and lose up to $2.5 billion a year because the Fair Labor Standards Act now applies to governments as well as the private sector, a labor expert said Thursday. Mark Georgeou, editor of the Nevada Personnel-Labor Relations newsletter, said the act requires that most government employees receive overtime pay instead of "comp time" if they work more than 40 hours a week. And because the U.S. Department of Labor is scheduled to begin investigations into government employee records Oct.

15, Georgeou said an avalanche of lawsuits may be brought against both states and counties. "Hold on to your wallets, the feds are about to bust us," he told a group of county officials during the annual Nevada Association of Counties conference. "There are already 50 lawsuits pending around the country." Georgeou, who is also a consultant for NACO, said no lawsuits have been filed in Nevada yet, but when or if they are, the counties may suffer damages asking for compensation for wages not paid, attorney fees and retroactive pay. "You're building up a liability if you're using comp time," he said. "It'll break our budgets all over the country." Officials from across the United States are lobbying Congress to negate a recent U.S.

Supreme Court decision, Garcia vs. San Antonio, that applied the act to governments, he said. Also there are at least two congressional bills pending that would "exempt state and local governments from the overtime provisions of the federal law." "They could overturn the act," he said. "But we can't rely on that and we must prepare now for what the consequences may be." Brad Smith, assistant district attorney in Clark County, said the consequences in Nevada next year could be "around $1 million but it's hard to predict since those damages could be tripled if the government is found to have willfully withheld wages. "The people that would really want the lawsuits are the lawyers," he said.

"There's a real incentive to sue because the attorneys' fees would have to be paid by the government." He said the act "raises far-reaching legal and fiscal liability issues that public administrators will inevitably encounter." But Tim Reardom, a U.S. Department of Labor official in the Wage and Hour Later that fall, Stolz was arrested for breaking windows and spray painting the Washoe County Courthouse, receiving nine months in jail andra one-year suspended sentence. In November 1979, he was arrested for punching out a heavy plate -glass door at the state Supreme Court building across the street from the Capitol. He said at the time he was protesting the inadequacy of the justice system. The following month, Stolz.

was arrested for smashing four glass panels in the front door of the U.S. Supreme Court building in Washington, D.C., and spent 15 days in jail there. those in the governor's and secretary of state's offices. He was sent to Lakes Crossing after the incident, and was later deemed competent to stand trial. At his sentencing, Stolz told Carson District Judge Mike Griffin he suffers from delusions but can control them when taking medication, which he said he was not taking at the time of the incident.

Stolz earlier was convicted of driving his motor home through the showroom window of a Reno auto dealer in October 1979 because he had bought a 1978 motor home he claimed actually was a 1977 model. He was sentenced to one year in prison. Windows smashed From page 1C Reno to pick up someone, Rhodes said. He added that janitors were in the building 6ut didn't hear the glass shattering. Rhodes said five heavy plate glass windows, measuring about 6 feet by 16 feet, were broken by a large rock.

He said another 22 windows were cracked or chipped. Stolz was sentenced last March to eight months in jail, with credit for five months already served for the Nevada Day 1984 hammer smashing of $5,000 worth of windows in the Nevada Capitol, including City officials told to better budget taxpayers' money "Wages for city employees are 75 percent of our budget, but they used to be only 50 percent. We have to cut that down. We're going to have to get rid of some employees." i "Major long-termsnaintenance on city buildings, parkJire stations and so forth is being neglected." said-Marvin Leavitt, director of finance for LasVegas. Marvel suggested noney be set aside from city-county budgets just fr maintenance.

4 To help city officials get Started, the "We want them to identify the problem," Marvel said. The subcommittee will study the suggestions from city and county officials and possibly introduce corrective legislation during the 1987 session. A tax shift by the 1981 Legislature reduced property taxes by 50 percent while raising the sales tax from 3V2 percent to 5 percent. When the economy turned sour, local officials were faced with a budgetary crisis. "As the economy goes, government goes," said subcommittee member Charlie Joerg, R-Carson City.

"The tax shift created turmoil in local budgeting," Marvel said. The Legislature also put a 4.5 percent cap on the amount of revenue local governments can raise. "We just don't know where we can "generate the money" to continue providing services for taxpayers, said Gabbs Mayor Ray Dummar. By Larry HenryGazette-Journal FALLON A legislative subcommittee Thursday urged Nevada city officials to "be better operators" with taxpayers' money. Officials of the Nevada League of Cities, meeting here through Saturday, asked the subcommittee for advice on how to raise money or cut city costs.

Budgets in some cities are stretched to the limit. Without more money, those cities will have to cut staff, reduce services, or raise revenue through service charges, fees, taxes or some alternate source, officials said. "They need to be better operators," said Assemblyman John Marvel, R-Battle Mountain, chairman of the legislative Subcommittee to Study the Funding of Cities and Counties. The subcommittee asked city officials to write out possible ways of cutting costs or raising revenue. Lehners apologizes again for remark ideas for making and saving mortey.

For instance, organizations curWjtly enjoying tax exempt status collegetra-ternities, churches and others could be looked at as a new source of revenue. To save, cities could consider "priviti-zation," allowing private companies to build and maintain public operations such as sewer plants and By Morgan CartwrightGazette-Journai Reno City Councilwoman Florence Lehners admitted Thursday her accusation that Deputy Police Chief Lonnie Jackson was drinking on duty was false, but her efforts at apologizing were once again rebuffed by Jackson's attorney. In a letter delivered to Jackson Thursday her third letter of apology Lehners said, "I wish to apologize for saying to you on June 4, 1985, 'lay off the booze' and 'I know booze when I smell it' and 'I can detect it on your I know now these statements were false and I publicly apologize for making them to you." Jackson has demanded a public apology and $50,000 in damages for Lehners' remarks, claiming his reputation has been injured. Lehners refused to comment further on her statements, the letters of apology or Jackson's demand. Cal Dunlap, Jackson's attorney, said Thursday the latest letter is still not enough to placate his client.

He indicated more than just an apology was needed but would not say specifically whether Jackson is holding out for the $50,000. Dunlap said he is still waiting for a more substantial offer from Lehners and a response from the city which he believes is partially liable for Lehners' comments. "No one has been responsive to what our concerns are," Dunlap said. "The man's reputation has been damaged and just saying you're sorry isn't enough." Jackson says the remarks by Lehners were made in the presence of a citizen and another officer while the 65-year-old councilwoman was on an election day campaign swing through police headquarters. Jackson said after Lehners confronted him in his office and made her remarks, he had a blood alcohol test done to prove he had not been drinking.

Mayor appeal From page 1C razza said, "It wasn't political standing when he (Mollath) filed his law- suit against the city of Reno." He said he and Wishart are sincere in their effort to overturn the court ruling and put a halt to construction of the Virginia Peckham project. "I'll guarantee we'll go as far as we can," he added. "This appeal has to be vapproved." Test said unless Sferrazza was named personally in the suit, rather than just included as a member of the City Council, he would have no legal standing. "Unless he's named personally, then he's out," Test said. Attorney William Prezant agreed it appears Sferrazza has no legal basis for an appeal.

"There's a real question whether the mayor has standing to do what he announced," Prezant said. "There's nothing to appeal from. There's no more case. It's all sizzle and no steak." He said the fact that he is sticking his neck out and taking the chance of being personally sued should indicate his sincerity. But several other lawyers are questioning whether the Sferrazza-Wishart appeal will work.

Noting that Judge Guinan signed a stipulation for dismissal Thursday, City Attorney Bob Van Wagoner said there appears to be no precedent for such a case. Former City Attorney Louis Test said the dismissal means "it's dead and over." suits challenge the city's formulas for assessing property owners for part of the cost of the redevelopment improvements. The city is revising those formulas and attorneys for the property owners have said the suits will be dropped if the new formulas are acceptable. City officials say construction on the first phase of the revised plan, estimated to cost $5.5 million, should be under way by mid-Ajril. ness owners feared the original plan to cut traffic to a single lane and build a partial pedestrian mall would hurt their businesses.

Other revisions include reduced landscaping, less costly lighting fixtures, asphalt rather than brick paving on the street and additional tour bus loading zones on Virginia. Nine other lawsuits affecting the downtown plan also have been filed, but City Attorney Bob Van Wagoner said those also are expected to be dropped. Those Downtown suit From page 1C the Riverside Hotel Casino and Charles and Gloria Mapes. The revised plan includes numerous changes downtowners insisted were needed if the plan was to win their support. The key change was maintaining four 'lanes of traffic on Virginia Street.

Busi- 4 Killer bragged From page 1C he was just nuts, just a crazy old man and she ignored him." When she returned from the store with groceries on Aug. 22, Reimers was outside her cabin with a pistol and chased her inside, Jackson said. He sho her twice inside the cabin one bullet piercing the heart. "She somehow managed to get past him and out the door," Jackson said. "He shot her again in the back as she ran away." Neighbors quoted the dying Beuer as saying, "Karl shot me.

Karl shot me," as she fell to the pavement. A retired World War II army veteran, Reimers had no prior record of violence, Jackson said..