County sewer board flush, eyes rate rollback

Some county residents could soon get something green back from their sewer service.

Don’t worry, it’s money.

The Clark County Water Reclamation District is flush with cash, so the agency will take a look at rolling back rates next year.

Sewer customers in the county were hit with a 5.5 percent rate hike July 1, but district deputy general manager Tom Minwegen acknowledged Tuesday that his agency doesn’t need the additional money.

Barring something unexpected, the district probably will return some or all of that money to customers starting in July 2013, he said. District officials don’t yet know by how much rates will be reduced.

The action is being spurred by County Commissioners Steve Sisolak and Larry Brown, who questioned the district’s need for the rate hike in light of its healthy financial standing.

As of May 31, the agency had about $530 million in reserve.

“I think we’re in the position to give back,” Brown said.

The water reclamation district provides sewer service to more than 240,000 customers in unincorporated Clark County, including the Las Vegas Strip.

The district collects and treats an average of 95 million gallons of wastewater each day, releasing the treated effluent into the Las Vegas Wash and downstream to Lake Mead.

Sewer customers served by the cities of Las Vegas, Henderson and North Las Vegas will not see a credit or a reduction in their bills as a result of the county action.

The commissioners also called on the district to accelerate its construction schedule in hopes of creating jobs locally.

In hard economic times, Sisolak said, it is important for the district to return any money it doesn’t need to ratepayers and get any construction projects it has planned “out on the streets” as quickly as possible.

“We have a lot of people out there who want to go to work,” Sisolak said.

Minwegen said the district’s cash reserves have grown as progress has slowed on construction projects the money was collected to pay for.

Some of the work was bogged down by bid challenges from contractors who lost out on certain jobs. Projects also were delayed when the district conducted a complete review of its use of engineering and design consultants, Minwegen said. “But I’m not trying to make excuses,” he added.

The district’s plan for the next five years calls for $547 million in new construction and upgrades to existing facilities, with no corresponding rate increases.

The two largest expenses will be $154u2007million to replace aging filters in the district’s treatment facilities and $102 million for a new, roughly 13-mile pipeline to carry wastewater across the valley from west to east.

The commissioners said Tuesday that they also plan to review the district’s financial policies with an eye to reducing the amount of money it keeps in its reserve funds. Sisolak said he thinks the agency is being overly cautious, and additional money could be freed up by reducing how much is being set aside for emergencies.

The 5.5 percent rate increase that took effect this month was enacted in 2008. It was part of a five-year plan to plot out construction work and raise rates gradually to spare customers from sudden sharp increases and what Brown called “sticker shock.”

When asked about the latest rate hike, Minwegen said, “Did we really need it? No.”

So why not cancel the increase and forgo collecting the money in the first place?

Minwegen said that would be easy to do if the district billed its customers on a monthly basis like other utilities do. But the agency has sent out its annual bills, and a large percentage of customers have paid them. It doesn’t make sense for the district to spend money to cut refund checks, he said.

“The cleanest way is to get them (credited) at the beginning of the next billing cycle,” Minwegen said.

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

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