Water agency says phasing in of fees carried high cost

Friday, May 22, 1998 | 9:57 a.m.

The Southern Nevada Water Authority has lost $29 million from developers by phasing in fees for new connections to the local water supply, SNWA Financial Manager Carey Casey said Thursday.

Developers paid close attention to scheduled increases -- the fee went from $1,000 to $3,400 per hookup over the last year -- purchasing fistfulls of connections a month before the next increase.

The water authority plans to recoup its loss from future development to pay for a $3 billion water delivery system, Casey said. The 1998-99 budget forecasts $83.3 million will be raised from connection fees, while water sales are projected to contribute $63.6 million.

Biologist Larry Paulson, one of 21 members serving on the Integrated Resource Plan Advisory Committee that recommended several ways to raise funds, said he wasn't surprised by the funding loss. "We raised real hell about phasing in the connection fees," he said.

While gamers and developers serving on the committee supported graduated fees, Paulson said he believed the full charge should have become effective immediately. County indicators point to slower growth, which could reduce SNWA's chance of collecting the projected connection fees.

The committee also supported a quarter-cent sales tax that will appear on the November ballot. The Clark County Commission decided to let the voters decide on the tax increase.

The revenue loss from the connection fees means the quarter-cent sales tax becomes even more important for the water authority, Paulson said. "They'll have to have that now," he said.

The sales tax would raise about $1 billion and help spread the burden of paying water fees to tourists. Visitors pay about a third of the sales tax.

The connection charge will increase on an annual basis. If voters don't approve the sales tax in November, the connection charge will jump about 7.6 percent next year.

If the sales tax is approved, raising up to $30 million a year, the connection charge will increase about 3.7 percent.

The SNWA budget assumes a 7.6 percent increase will boost the fee to $3,660 per connection in March. By 2025 the connection fee for a home could hit $28,000.