Sunday, March 11, 2012 | 3 a.m.
Criticism continued after approval of a flat-rate monthly surcharge that will be added to hundreds of thousands of water bills beginning in May. The Las Vegas Valley Water District, whose members are the same as the Clark County Commission, approved the surcharge, which will raise the average residential bill $5 a month for the next three years.
The increase was needed because the region’s water wholesaler, the Southern Nevada Water Authority, has billions of dollars in outstanding debt. The other water districts — in North Las Vegas, Henderson and Boulder City — have or will follow suit soon. The surcharge Las Vegas alone will increase the authority’s annual revenue by $71 million. The additional money from all water districts will increase revenue about $100 million per year.
During debate, some critics of the surcharge said the rate increase should have been tied to consumption — that is the more water used, the more paid.
Q: Why wasn’t that option chosen? Seems like people would have then conserved water more and lowered their bills.
A: That’s exactly why it wasn’t approved. The water authority argued that uncertainty about consumption would not be a good thing for the “bond market.” The money types like a sure thing, so the uncertainty could lead to higher financing costs when the authority wants to raise money by selling bonds in the future.
But the Las Vegas Chamber of Commerce wasn’t happy about this decision.
Q: Why?
A: Brian McAnallen, the chamber’s vice president, gave examples of water bill increases some small businesses will see. One business will see its bill increase from $747 a month to $1,660, a 122 percent increase. Much of that is due to a surcharge for a 6-inch fire meter — a larger pipe in case of a fire — required of most businesses.
McAnallen said he didn’t fight for the consumption-based plan because the water authority had tailored its arguments and options toward the flat-rate surcharge. The agency had a study on options done by Hobbs & Ong.
Water Authority General Manager Pat Mulroy “needed a flat fee to go to the bond market,” he said. “We’re smart enough to know if we went for the other option, we were not going to get anywhere.”
Instead the chamber made a case to increase the flat-rate fee for residential customers, from $5 to $9.98. The increased revenue from that would lower costs for businesses.
That one lost, too.
McAnallen doesn’t blame the commissioners who voted for the surcharge. “The water authority and water district put the elected officials against the wall. They said ‘you have no choice,’” he said.
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No one was happy about the water surcharge. Some are happy, however, that it is causing elected officials to openly say that the water district and water authority’s finances need to be more open to scrutiny.
Commissioner Steve Sisolak noted that the Springs Preserve, which has been subsidized by Las Vegas Valley Water District customers since it opened, has reduced its required subsidy from about $14 million to $5.5 million.
Q: What do customers of the other water districts, in Henderson, North Las Vegas and Boulder City, pay to help keep the Springs Preserve open?
A: Only the Las Vegas Valley Water District contributes to the subsidy. Sisolak said the district’s 300,000-plus customers each fork over about $18 per year to subsidize the preserve visited by people throughout Southern Nevada.
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During Tuesday’s commission meeting one of those odd Las Vegas scenes unfurled — Ronald McDonald and Elvis hanging around the commission chambers with Elvis eyeing Ronald suspiciously. (See the photo accompanying this column.)
Ronald McDonald was there with restaurateur Thomas Ault, whom commissioners presented with a proclamation for operating McDonald’s restaurants in the Las Vegas Valley for 27 years.
Elvis? He was just there — in the building, so to speak.
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