Ring in water rate hike with new year, through 2012

By Joe Schoenmann

Thursday, Sept. 17, 2009 | 2 a.m.

Clark County residents are about to get hit with yet another rate increase, and this one will recur each year through 2012.

The Southern Nevada Water Authority board today will increase the price of water by 10 cents for every 1,000 gallons effective Jan. 1, 2010, then again on Jan. 1, 2011, and yet again the following year.

“I’m not all for it, but it’s something I think we need to do,” said Tom Collins, one of two Clark County commissioners on the board, which is made up of elected officials from throughout the county.

The water authority acts as a wholesale water distributor to all the various municipal water “districts” in Southern Nevada. Each of those districts has given the green light to the rate increase, so today’s action is a foregone conclusion, Collins said Wednesday.

Each water district sets its own rates for water delivery, so the final amount you will pay for water in the coming year depends on where you live.

But Dick Wimmer, the water authority’s deputy general manager for administration, estimated that the wholesale water price change will translate to a 3.2 percent increase in the average residential bill.

A little more than a year ago some 1.2 million customers of the Las Vegas Valley Water District saw their rates increase 23 percent. The goal of that increase was to encourage water conservation. The thinking was that if water costs more, people will use less.

This push by the water authority isn’t driven so much by conservation, however. It’s driven by the lousy economy.

Water authority documents point to a precipitous drop in hookup fees as the reason the increases are needed. New homes and businesses are assessed that fee for tying into the public water system.

But revenue from those fees by June 2010 will have fallen to $14.7 million, about 92 percent less than in 2006, when it totaled more than $188 million.

Here’s the problem with that decline: The authority has existing debt of roughly $3.5 billion, Wimmer said. It also expects future capital projects, such as building a “third straw” deeper into Lake Mead. That straw is a hedge against the real possibility that the first, highest pipe into the lake could be sucking air, not water, if the drought doesn’t relent. The lake’s level is at about 1,095 feet above sea level; the first intake is at 1,050 feet, said Kay Brothers, deputy general manager for engineering and operations.

The authority has to make payments on that debt for many years. Raising water rates helps make those payments when hookup fees, which account for about 50 percent of the authority’s funding, are way down, Wimmer said.

Water authority critics point to its bank account — which is flush with $480 million — and say it’s ludicrous for the water authority to claim it needs more money from its customers right now.

Authority officials say they don’t want to dip into its nearly half-billion-dollar account because that money helps when the agency wants to borrow still more money for its expensive projects.