Wednesday, March 5, 1997 | 11:59 a.m.
CARSON CITY -- No regulatory agency oversees the Las Vegas Valley Water District, so taxpayers have no idea whether the $1.7 billion cost of a proposed pipeline and improvements is excessive, a state senator says.
"We don't know if we're talking about buying a Ford or a Rolls-Royce," said Sen. Ann O'Connell, R-Las Vegas, who wants an independent study of the water district.
"Nobody is watching out for the ratepayers in the Las Vegas Valley Water District," O'Connell said Tuesday. "We're increasing taxes, water rates, connection charges and another surcharges on new building.
"It would be a good idea to look at the operation of a government facility that is allowed to increase rates without any oversight."
She has asked state Consumer Advocate Fred Schmidt to supply the Senate Commerce and Labor Committee with a list of consultants or experts who could look at the rates charged by the water district, its management and whether the proposed project to handle growth is bloated or right on target.
No formal vote was taken by the committee but O'Connell thinks she has its support for a consultant's study.
Meanwhile, Sen. Mike Schneider, D-Las Vegas, also a committee member, said some lawmakers question whether the water district and the Southern Nevada Water Authority need a requested quarter-cent sales tax increase to pay for the project.
"If growth continues at the same pace, they might have enough money," Schneider said.
Senate Taxation Committee Chairman Mike McGinness, R-Fallon, said the Legislature itself will not impose a quarter-cent sales tax hike in Clark County. Instead, the Legislature will probably authorize the Clark County Commission to levy the sales tax.
A majority of the County Commission, when polled by the SUN, already has said it would be willing to vote for the tax. Assembly Taxation Committee Chairman Bob Price, D-North Las Vegas, has said previously he might like to see a vote of the public on any sales tax increase.
Officials from the water district could not be reached for immediate comment on O'Connell's plan for an independent evaluation.
She raised the issue during testimony by Schmidt Tuesday on how Nevada Power Co. performs under state regulation. The utility, she said, has kept pace with growth and in January received approval from the state Public Service Commission to lower rates by $51 million.
"Nevada Power has done a great job working under a stressful situation," O'Connell said, noting that it is regulated by the PSC and often butts head with Schmidt, who represents consumers. The utility has been fighting a low bond rating but it has overcome its problems to serve Clark County, she said.
She asked Schmidt if he could undertake an evaluation of the rates of the water district and if the planned project might be too costly. Schmidt said he does not have authority over government-run utilities but added he would supply the names of expert consultants who could do the job.
O'Connell doesn't have an idea of the cost or if she can sell the idea to the rest of the Legislature.
"We need to have people who understand the industry," she said. "The major problem is we don't have the water expertise on what they need and what the rate structure should be.
"I would like to see their figures confirmed. We're talking billions of dollars. I want some level of comfort other than from an entity that doesn't have any oversight.
"There is nobody that is challenging anything they're doing. I have a large constituency and when I go back, I want to say we did everything we could to make sure the dollars are well spent."
The water district is also asking for a bill to allow it to pay off its debt in 40 years instead of 30 years. This ran into opposition earlier this week in the Assembly Government Affairs Committee from the Nevada Taxpayers Association.
The bill would help with the cash flow of the water district, permitting it to pay less per year on the bonds but more interest in the long run. Nevada Taxpayers Association Executive Director Carole Vilardo said this would not add anything to the project and it would cost the taxpayers more money.
"They're asking for 40-year bonds," O'Connell said after the committee meeting Tuesday. "What happens if the sales tax falls off? This is the time to ask questions and make sure this is the right thing to do."
Besides the sales tax, the Nevada Resort Association, a group of major casinos in Clark County, has agreed to support a 1 percent increase in the hotel-motel room tax to help pay for infrastructure. Las Vegas developers have also said they would back a boost in the real estate transfer tax to finance growth.
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