Southern Nevada Water Authority, state lawmakers argue oversight

CARSON CITY — The head of the Southern Nevada Water Authority said Monday a 2012 rate hike that produced a backlash from the business community was needed to raise money to build a new intake on the Colorado River.

The new intake is necessary because a severe drought threatens Southern Nevada’s access to Lake Mead water and came during the Great Recession, when there was no new economic growth to help raise the revenue needed to pay for the $800 million project, said Pat Mulroy, general manager of the district.

“Had this project not become of utmost necessity to secure the water supply for Southern Nevada, we would not be sitting here today,” she said.

Mulroy spoke to the Senate Government Affairs Committee in opposition to a bill by Sen. Michael Roberson, R-Las Vegas, which would subject future water authority rate hikes to review and analysis by the Public Utilities Commission.

Roberson said Senate Bill 232 would require proposed rate hikes to be reviewed by experts to ensure they are necessary and fair.

Roberson’s bill was supported by Brian McAnallen, vice president of government affairs for the Las Vegas Chamber of Commerce, who said it was not the rate increase but the process that led to it that makes the bill necessary.

The legislation would not affect the authority’s bond rating or its ability to sell bonds if it is implemented properly, he said.

But Mulroy and other authority witnesses disagreed.

Mulroy said the bill would bring the authority’s outstanding bonds into question and affect the bond rating it now enjoys.

The constitutionality of the measure was also brought into question.

Mulroy added there are more than two dozen elected officials in Southern Nevada who are directly accountable to the public and who have to defend any approved rate hikes and stand for re-election.

Roberson called the bond concerns a red herring and a weak argument.

“This is an example of unmitigated power that one person holds over the water rates of Southern Nevadans,” he said.

Roberson said there was minimal notice of the 2012 rate hike. The Henderson City Council spent seven minutes on the rate hike discussion last year.

“That is not independent oversight,” he said.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900.