Business owners to water authority: Rate hike’s ‘a tremendous mistake’

A couple of weeks ago, the Las Vegas Valley Water District got an earful from customers about a steep rate hike on businesses.

On Thursday, it was the Southern Nevada Water Authority's turn.

A handful of angry business owners and residents attacked the rate increase during the authority board's monthly meeting, and many more people have called and sent letters about their ballooning bills.

The barrage of complaints and concerns prompted Clark County Commissioner Steve Sisolak to issue an unusual apology of sorts: He didn't understand what he was voting for when he voted for the rate hike earlier this year.

"I was under a totally different impression when we passed this increase," Sisolak said.

He said he had no idea that the new infrastructure surcharge he helped approve would boost the monthly bills for some businesses, churches and nonprofits by 200 percent or more. He thought most people would have to pay a flat monthly increase of about $5.

If he didn't know then, he certainly does now.

The new surcharge drew vocal opposition from the Las Vegas Chamber of Commerce and others before it was approved, and the chorus of complaints has grown since the rate hike began showing up on bills in May.

The new surcharge is based on the size of the pipe serving the property, not how much water is used. As a result, commercial properties have been hit with huge bills for the large but little-used water lines that feed their hydrants and fire sprinkler systems.

Jim Hammer is president of Storage One, which owns 24 self-storage facilities in the valley. He told the authority board that the water bills for his businesses shot up by a combined 300 percent when the new charge took effect.

"We're not looking to dodge our fair share of this, but this is certainly inequitable," Hammer said. "It's not fair, and it's tremendously detrimental to our business."

Brian McAnallen, vice president of government affairs for the Las Vegas Chamber of Commerce, called the rate hike "a tremendous mistake" - one made worse by differences in the way the authority's member utilities charge their customers.

"You have businesses that are very confused by these bills and concerned about what they will mean for their bottom line," McAnallen said.

The water authority board can expect to hear more complaints like that at its July 19 meeting, when the agenda will include a discussion of the new surcharge.

Sisolak and others are trying to speed up a planned review of the charge, which was originally supposed to be done as part of a larger planning process over the next year and half by a new citizens committee being assembled.

Sisolak said some water customers may not be able to wait that long.

"What I'm hearing from the business community is they're not going to make it 18 to 20 months," he said.

McAnallen said something needs to be done. The business owners he is talking to can scarcely afford the current surcharge, which is slated to last for the next three years. If no other solution is found by 2016, the charge will have to be doubled to cover the authority's debt load, he said.

Authority officials have acknowledged that the surcharge affects businesses more than residents, but they said the new fee is necessary to pay down roughly $2.5 billion in construction debt and finish funding an $800 million intake being built to keep water flowing to the valley even if Lake Mead continues to shrink.

Such projects used to be paid for with the spoils of growth, namely connection charges from new homes and commercial buildings. When growth stopped, so did the water authority's primary source of construction money.

It's not just business owners who are complaining about the surcharge.

While the average single-family home saw its bill go up by about $5, some older homes with larger lots and water lines took a bigger hit.

Lifelong Las Vegas resident Mary Joy Alderman lives in a 60-year-old downtown home that sits on an acre of land served by a 1-inch water meter. She said her bill just jumped to about $36 though she has slashed her monthly water use to around 1,000 gallons - less than a tenth of what the average home consumes - and doesn't water her landscaping at all.

"Everyone else gets 20,000 gallons a month for $36," she said, adding that actual water use accounts for less than $2 of her bill.

"I have done my part," Alderman told the water authority board. "You need to do yours."

Contact reporter Henry Brean at hbrean@reviewjournal.com or 702-383-0350.