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Customers flood Water District meeting with complaints about new rates

Updated Tuesday, June 5, 2012 | 4:25 p.m.

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Jim Meservey, a principal of Storage One, points to the total of his current monthly water bills after surcharges Wednesday, May 30, 2012. The figure at left was the total bill for the prior month without the surcharge. Although the business is a low water consumer, the company has seen its water bills double or triple depending on the size of the water meters. In 2016, the surcharges are scheduled to double, he said.

Water customers lambasted the Las Vegas Valley Water District for, as one man put it, “running amok” and changing the system to the point that some water bills increased by 300 percent in May.

Nearly 30 people spoke Tuesday morning at the meeting of the Water District, including Gordon Marx of the Nevada Fire Sprinkler Contractors Association, who said he knew of 1,000 people who could lose their jobs because their employer might have to choose keeping the employee or paying a higher water bill.

Many of the complaints came from small-business owners now paying a surcharge for fire lines, which provide more water pressure in case of a fire but are rarely used. Businesses previously never had to pay for those lines.

Pat Mulroy, the Water District's general manager, responded that the “growth machine” that shouldered two decades of water expenses has ended.

“We’ve taken water for granted, and the machine that paid for everything has all but disappeared,” she said.

The Water District meeting, which normally lasts for 15 minutes, stretched for nearly two hours. Speaker after speaker decried the May water bills. In February, the Southern Nevada Water Authority board –- which provides water to seven individual water districts in Southern Nevada –- voted to add surcharges to water bills. The Water Authority needs money since connection fees, which had peaked at $188 million in 2005-06, fell to about $11 million last year.

Third Straw Construction

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

Meanwhile, the Water Authority is shouldering a $3.3 billion debt, much of it due to a third intake pipeline being built deep into Lake Mead. The pipeline is considered insurance as a decade-long drought tightens its grip on the Southwest.

To deal with the Water Authority's drop in revenue, consultants Hobbs & Ong came up with three models, including one to increase water rates in a tiered “pay-as-you-go” manner – the more used, the more paid. The model that gained approval, though, was to put place flat rates on homes and businesses based on the size of the pipe serving that property. Smaller pipes pay less.

Fire lines, which had never cost a business before, can be much larger than, say, an average home’s ¾-inch pipe. So costs for those lines were much higher under the new structure.

The new rate system is to remain in place three years, after which revenues will be examined to see if another surcharge increase is needed.

The 35 speakers at this morning's meeting understood the loss-of-revenue rationale; they just didn’t like how the new charges were spread among water customers.

Dan Laliberte said the new surcharge appears to negate water conservation residents have embraced over the past decade. The Water Authority’s budget says the average per-resident water use has fallen from .85 acre-feet per year to .45 acre-feet.

“Why are we spending money to rip out sod” when water bills still go up? Laliberte asked. “It makes no difference.”

Nonprofit organizations complained their bills went way up but they have no way to pass the cost onto customers. Places like Shade Tree, a shelter for abused women and children, don’t have paying customers.

“I don’t know how to absorb a $12,000 (annual) increase in our water bill,” said a Shade Tree representative.

Pat Mulroy

Pat Mulroy

The Water District wasn’t scheduled to come up with solutions, at least not right away. After the public spoke, the board voted to establish a five- or seven-person committee to work in concert with the Water Authority’s 21-person committee, established to look at rates to see if there is a better way to raise revenues.

The Water Authority committee will begin meeting sometime this summer. At some point, the Water District committee will look at the Water Authority’s recommendations, then figure out how to implement them in the Las Vegas Valley Water District.

Some ideas already have percolated, including one by Clark County Commissioner Steve Sisolak to add a water reconnection fee – similar to electricity or cable TV reconnection fees – to the price of a home when it is sold.

After the meeting, Mulroy said a problem with the idea was that about two decades ago a group of businesses sued against a similar charge. The electricity reconnection fees, they argued, is for work actually done. But that isn’t necessarily the case for this so-called water reconnection.

CORRECTION: This version corrects the spelling of Gordon Marx's name. | (June 5, 2012)

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