Wednesday, Feb. 29, 2012 | 12:55 p.m.
The Southern Nevada Water Authority voted today to add a $5 charge to customers’ bills for three years to pay for infrastructure costs, meaning residential users could see higher bills within months.
Retail customers might seen a monthly increase of $36, and resorts' bills could rise $2,200.
The size of the increases aren’t certain. The authority is the wholesale water supplier to several water districts — Las Vegas Valley Water District, for example — which bill customers directly.
Clark County Commissioner Chris Giunchigliani, who sits on the board of the Las Vegas Valley Water District, said it will be up to each district — in North Las Vegas, Henderson, Mesquite and Boulder City — to decide how to divvy up the water authority’s increased charge.
That could mean a $5 hike for residential customers, or, Giunchigliani said, or it could be another amount. As the water authority board met, she sent a letter to the Clark County District Attorney’s Office calling for formation of a committee to examine other options.
“We can find a better way to do it,” Giunchigliani said, adding that she wants to bring businesses and residents together. “And for people who say we can’t come up with a quick solution, I say they’re wrong.”
The water hike had plenty of foes at Wednesday’s meeting of the water authority board. Las Vegas Chamber of Commerce representatives argued for a $9.98-per-residence flat-rate hike, saying it would lessen the burden on businesses.
Some said the water authority hadn’t done enough to rein in its expenses, and talked about the “Taj Mahal” the authority occupies downtown. Board member Steve Sisolak agreed, saying the water authority’s lease on the building is “extremely, extremely expensive.”
The water authority must raise rates because of a massive drop in connection fees — the costs for a new business or homeowner to connect to the water utility. Revenue from connection fees dropped from a high of $188 million in 2006 to about $3 million in 2010.
Without connection fees, which once paid for about 57 percent of the authority’s expenses, the utility is in danger of defaulting on massive debt payments mostly for infrastructure projects such as the third water intake pipeline into Lake Mead, which has a $3 billion price tag.
These were the three options:
• A hike that ties into usage by increasing the charge per 1,000 gallons of water by 30 cents to $1.06. A typical residential bill would increase about $10.
• A flat monthly rate increase of $5 for residential customers, $36 for retail and $2,200 for resorts. The charge would be imposed for three years.
• A combination of the first two options, which would cost $5.65 for most homes, $31 for retail stores and $3,850 for resorts.
Some argued for the first option, the pay-as-you-go option — meaning that if you use more water, you pay more.
Launce Rake, representing the Sierra Club, said that option would prompt more people to conserve, which decreases the need for more infrastructure to secure more water. He also said that under flat-rate structure, homeowners would see their water bills increase by double-digit percentages, while casinos and golf courses would see their water bills increase by 2 to 6 percent.
Virginia Valentine, president of the Nevada Resort Association, said a small increase for large businesses with water bills in the hundreds of thousands of dollars amounts to much more than increases smaller water users will see.
Ultimately, the pay-as-you-go option and the mixed option were rejected. Board member Sam Bateman of the Henderson City Council said the fixed-fee gives the water authority stability over the next few years.
Bond investors prefer a stable revenue stream.
Sisolak said that between now and 2016, he wants a committee established with “all the stakeholders” to examine the next round of rate hikes, likely in three years.
Suggestions to postpone a vote to give a committee time to examine different options were rejected. Guy Hobbs, a paid consultant who came up with the board’s options, said delaying the rate hikes would put the water authority’s bond rating at “significant risk.” When a bond rating falls, funding become more expensive to the public agency issuing bonds.
At meeting's end, Rake called it a “good day for casinos and golf courses.”