Water agency debt compels money grab

By Joe Schoenmann

Sunday, Dec. 11, 2011 | 2 a.m.

The Southern Nevada Water Authority’s request to add a new charge to water bills is drawing the attention of groups who say the agency’s mantra is shifting from “conserve” to “show us the money.”

That’s a new mantra? Seems as though the Water Authority general manager was saying as much years ago.

That’s true. On “Face to Face With Jon Ralston” in 2007, Pat Mulroy said raising water rates won’t increase conservation. Reading between the lines, critics saw that as an argument against tiered water rates (use more water and the price per gallon increases). Though Mulroy disagreed, tiered systems are widely seen as a way to curb water use — just as high gas prices force people to drive less.

The Water Authority needs more money to pay off billions in debt. The old source of funding — connection fees paid by developers — dried up as new construction has all but vanished.

What hasn’t vanished is the authority’s debt: Next year, another $300 million will be added to the more than $3 billion in existing debt, to pay for the “third straw” into Lake Mead.

So what’s the plan now?

The Water Authority hired local consultants who have provided two alternatives: a flat rate for all water users or a rate tied to water use (use more water, pay more money).

Which plan will it be?

Behind the scenes, we’re told, the pay-as-you-go scheme isn’t gathering support because ratepayers might cut water use to save money, leaving the Water Authority with less revenue to pay its debt.

That position contradicts what Mulroy said in 2007 — that raising rates won’t increase conservation.

Well, sometimes what’s said and what’s reality are different things.

So is the flat-rate idea getting people riled up?

It’s starting to. Launce Rake, an environmental and economic consultant who served on a 2007 water-rate committee that came up with the tiered rates used by local water districts, said a flat fee would unfairly affect residents with lower incomes. Rake believes the flat rate would reveal a “disconnect” between highly paid policymakers/administrators, who would have no problem paying the increase, and working-class residents, who “are struggling to make ends meet.”

What are some of those salaries, by the way?

Mulroy, the Water Authority general manager, earned base pay of $279,000 in 2010 plus $72,000 in benefits; general counsel Charles Hauser earned $260,000 plus $65,000 in benefits. Not including benefits, about 320 water authority employees earned more than $100,000 in 2010.

“They have a snide attitude that it doesn’t matter what they charge because if people get thirsty, they’ll pay whatever they have to for water,” Rake says. “I’m just saying, we should charge more to those who have the ability to pay. Those are the high-volume users in this county, who typically have more money.”

Rake said the Occupy Las Vegas organization and others have expressed interest in the fee debate.

Couldn’t an argument be made, however, for the flat rate?

If the pay-as-you-go system didn’t generate enough revenue, the Water Authority would jack up the price per gallon to make up the difference. In that case, perhaps the flat-rate would be better for the water user, knowing what they’ll have to pay each month.

Additionally, maybe the flat-rate plan could be structured so those who use less water pay a lower set fee.

Those will be key questions in the next few months. Another question will be how much the Water Authority has to give up to get this money.

What do you mean?

County Commissioner Steve Sisolak, who sits on the authority board, said he wants to see cuts in the agency’s staffing and/or the budget if residents are going to pay higher water bills.

When is this coming up?

The Water Authority hasn’t vetted the fee proposals with the various municipalities, we’re told. That needs to happen and elected officials may hold meetings to gauge public opinion on the proposals.