Las Vegas Sun

November 29, 2014

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Proposal to hike water rates would pay off debt

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Steve Marcus

A rig of explosives is lowered into Lake Mead during construction of the Southern Nevada Water Authority’s third straw, May 10, 2011. The Vegas Tunnel Constructors crew was blasting a 60-foot shaft in the bottom of the lake for the straw’s intake structure.

Third Straw Construction

A rig of explosives is lifted by a crane during construction of the the Southern Nevada Water Authority's Launch slideshow »

Water bills for Las Vegas Valley residents could be going up for the second straight year to help pay off construction debt under a plan from the Southern Nevada Water Authority that will be considered Thursday.

The proposal spreads the increase evenly between a hike in usage fees and an increase in the flat infrastructure charge billed to customers each month. Businesses and homes will bear similar shares of the increase, although the amount their bills will rise depends on usage and the size of their water line.

Under the plan, a typical single-family home will see its monthly bill, now $34.34, increase by about $1 per month per year, topping out at $39.26 in 2017. Homes that use more water could see their monthly bills rise from $107.47 to $115.63 over the three-year period.

The plan was crafted by a 21-member committee of residents and business leaders who have been meeting for the last year.

SNWA officials have framed the rate increases as a necessary step to keep up with rising costs on roughly $3 billion of construction debt accumulated during the valley’s boom.

Revenue from connection fees, the agency’s primary source of funding capital projects and paying off debt, plunged as construction came to a halt during the recession. Connection fees dropped from a high of $188 million in 2005 to $3 million in 2008 and have not recovered since.

With principal and interest payments on the debt due to increase by $80 million annually in 2017, the SNWA is again turning to a rate increases to shore up its finances.

The proposal will be presented to the SNWA’s board, which could vote on it when it meets at 4 p.m. Thursday at the authority’s downtown office at the Molasky Corporate Center, 100 City Parkway.

Although the increase in debt payments doesn’t kick in until 2017, the SNWA plans to gradually implement any rate increases over several years to avoid a large spike in customers’ bills.

Any extra revenue generated from the early implementation will be diverted to a fund that can’t be used until 2017, in an attempt to minimize future rate increases, according to the committee report.

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