For more than three decades, North Las Vegas has used some of the money it collects from residents in water and wastewater fees to shore up the city’s general fund.
In recent years, 40 cents of every dollar in such fees collected was routed from the city’s enterprise utility fund to the general fund as a “payment in lieu of taxes.”
City Councilman Richard Cherchio blasted that practice during a special council meeting Wednesday.
“When people pay water bills, you would expect as a resident that money to go directly to the fund in question,” Cherchio said. “That’s what I believe the residents want, and that is what is appropriate.”
The council voted to cap at $32 million the amount the city transfers out of its utility fund into its general fund each year. The city transferred $32.9 million in fiscal year 2008 and $31.4 million in fiscal year 2009 between the two funds, which comes to 40 cents for every dollar collected.
The vote came after Finance Director Phil Stoeckinger warned that the cap could create an additional general fund shortfall of $40 million over the next five years.
Mayor Shari Buck said the move could lead to layoffs at the city.
“It’s a tough decision to make that kind of cut in these economic conditions,” she said after the meeting. “I didn’t want to do it.”
But Buck said she voted for the cap because “that’s the direction the council was going.”
The city probably will increase its water and wastewater rates by 3 percent to 4 percent late next year, in part to help pay for the city’s new $240 million wastewater treatment facility, which is under construction at Carey Avenue just south of Nellis Air Force Base.
North Las Vegas contracts with Las Vegas for most of its wastewater services. The smaller city decided to look into building its own plant to control its wastewater rates.
Councilman William Robinson was the only member to vote against the cap. He had voted against construction of the wastewater facility.
“I can’t support an increase, period,” he said. “We’ve got people losing their jobs.”
Several council members said they would like to decrease or eliminate the fund transfers but agreed the city cannot afford to do so right away.
“It would be the equivalent of hitting a brick wall,” Cherchio said. “We couldn’t operate.”
Contact reporter Lynnette Curtis at firstname.lastname@example.org or 702-383-0285.