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July 26, 2014

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Water Authority OKs rate hike, raising residents’ water bills

Updated Thursday, Sept. 26, 2013 | 9:15 p.m.

With an $80 million spike in its debt payment looming, the Southern Nevada Water Authority will implement a rate hike starting in January that will see residents and businesses across the valley paying more for their water.

Increases in usage fees and infrastructure charges were approved unanimously Thursday afternoon by the SNWA board after an hour of public hearing and testimony on a rate plan that was crafted by a 21-member committee of community and business leaders.

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 rate increase still needs approval from the Las Vegas Valley Water District and water districts in Henderson, North Las Vegas and Boulder City before it can take effect in January.

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

Principal and interest payments on the debt are scheduled to increase to $239 million annually in 2017. Revenues from the authority’s primary funding source — connection fees — have dropped by 90 percent in recent years after new development dried up during the recession.

The authority has delayed other capital projects and cut personnel expenses by 5 percent in an attempt to save on costs, but the savings haven’t been enough to keep up with the ballooning debt payments.

By beginning the rate increases in smaller increments next year, SNWA officials hope to avoid large spikes in customers’ bills in the future while getting a head start on its payments.

The proposal faced little resistance from board members during Thursday’s meeting, in part because the borrowed money has already been spent and bills need to be paid.

“We have a legal obligation to pay this money back. We borrowed (it), the time has come due that we have to start making payments on that,” Clark County Commissioner Steve Sisolak said. “We can’t just kick the can down the road for the next generation.”

The rate plan was crafted across 14 public meetings over the course of more than a year of a 21-member committee of community and business leaders.

The committee was formed in 2012 after the authority’s last rate hike added an infrastructure surcharge sparked outrage as some businesses saw their water bills skyrocket.

The group considered more than a dozen different rate structures before settling on the proposal presented to the board Thursday.

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