Chamber proposes shifting larger water rate hike to residents

With less than a week to go before a decisive vote on a water rate hike, the Las Vegas Chamber of Commerce is giving water officials the business.

Chamber officials want the Southern Nevada Water Authority to scrap the three proposals on the table and adopt a fourth rate hike option that would shift more of the burden onto residential customers.

Brian McAnallen, vice president of government affairs for the chamber, said the current proposals all unfairly target commercial water customers, some of which could see their monthly bills increase by as much as 300 percent.

"Now is not the time to heap a greater burden on the business community when it is business that is going to drive the recovery here," he said.

Water authority officials say they need to generate about $300 million in additional revenue over the next three years to fund "critical water infrastructure" and pay down construction-related debt and maintain cash reserves that protect the agency's bond rating.

Major construction work used to be paid for with connection charges from new homes and businesses, but that stream of money all but dried up when the economy tanked and the housing market collapsed.

Most residents would see their monthly bills increase by $5 to $10, depending on which option is selected.

In early January, the water authority unveiled five proposals for raising rates. On Jan. 19, the authority board picked three of the options for further consideration.

Board members are slated to meet next Wednesday to cast a final vote on one of the three choices.

The first option would increase the monthly commodity charge from 30 cents to $1.06 per 1,000 gallons of water used. That translates to an average monthly increase of $9.88 for the typical single-family home, but residential customers could trim that by reducing water use.

The second option would establish a flat infrastructure surcharge based on the size of the customer's water line: $5 a month for the average home, $36 more for a small retail store and $2,200 for a large resort.

The third option is a blend of the first two and translates to $5.65 for most homes, $31.04 for small stores and $3,855 for large resorts in the first year.

Chamber officials are pushing a modified version of Option 2 with a flat surcharge of about $10 instead of $5 for most residential customers.

McAnallen said that even with the higher surcharge, Las Vegas Valley residents will be paying less for water than people do in many other cities across the West.

While agreeing that some sort of rate hike is necessary, McAnallen said the current proposals are "just not fair to the business community, especially when we're letting the residents off."

He noted that residential customers account for more than 450,000 of the valley's nearly 515,000 water hookups.

On Wednesday, the chamber issued a call to action to its nearly 6,000 members, urging them to contact water authority board members and push for option No. 4.

The move represents a rare public rift between the authority and the chamber, which have worked together on several issues over the years.

Chamber officials regularly rally business owners to testify in favor of water authority projects, including the controversial plan to pipe groundwater to Las Vegas from rural valleys across eastern Nevada.

McAnallen said the chamber has long been "a partner and a companion" of the water authority, "and I would argue we still are."

But on this issue, the business community could not remain silent, he said.

Water authority General Manager Pat Mulroy said she is "absolutely sympathetic" to the chamber's position, but she fears the new option being proposed would be too much for residents to bear.

"Their 10 dollar rate would be devastating, especially in less affluent parts of the community," Mulroy said. "We're the foreclosure capital of the country. People are bleeding all over the sidewalk."

She said if board members decide they want to consider the chamber's option, the authority would have to "start the whole process over" with a new public hearing and community meetings on the rate hike proposals. Such a delay could jeopardize an upcoming bond sale needed to fund ongoing construction of a new water intake at Lake Mead, she said.

Mulroy acknowledged that some commercial customers could have trouble paying the new higher rates, but she said water officials will work with business owners just as they do with residential customers.

As for McAnallen's broader argument, Mulroy said he is absolutely right when he argues that the current rate hike proposals hit businesses harder than they do residents.

"Do I believe that has to be fixed over time? I do agree it has to be fixed over time," she said. "Right now, it's a juggling act between what the residents can bear and what they can't bear."

The chamber's action was the second public broadside against the proposed rate hike in recent days.

Last week, the Nevada chapter of the conservative political advocacy group Americans for Prosperity launched a campaign against the proposed rate hike with a robo-call that went out to about 1,000 local water customers.

Next Wednesday's water authority board meeting is slated to start at 9 a.m. at the agency's headquarters on the seventh floor of the Molasky Corporate Center, 100 City Parkway in downtown Las Vegas.

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