Three options on the table for water rate hike in Southern Nevada

Water rates are going up. How much depends on what option the Southern Nevada water agency's board will select after people voice their opinions at public meetings.

Directors of the Southern Nevada Water Authority Board voted 7-0 Thursday to send three options for public comment to districts that supply water in Las Vegas, Henderson and North Las Vegas.

Dates of those meetings will be announced later, but the board intends to vote on a rate increase at its February meeting.

Whichever option is selected, it will amount to a balloon payment that will stave off escalating costs for construction of a third intake from Lake Mead, said John Hiatt, a longtime observer of water supply issues in the Las Vegas Valley who has served on several advisory boards.

After three years, "we're going to have to pay again," he said after the meeting. "It was interesting that there is no real discussion about where we're going in the future."

The water rate increase is needed to cover pricey construction projects that were once paid for with the spoils of growth, and those funds, including connection fees, have dried up since the economy crashed in 2008, said Pat Mulroy, the authority's general manager.

"We have been trying to weather the storm, but the storm is longer than we imagined in 2008," she told the board's directors before their vote.

The bill for the so-called "third straw" will be close to $800 million by the time it is finished, and that doesn't include cost for other improvements made over the past decade.

So the debt-service balance by 2016 will still be at least $223.5 million for principal and interest, according to the water authority staff.

Under a plan laid out by the authority's consultant, Hobbs, Ong & Associates, the first option for offsetting costs would be to 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.

The second option would an excise tax or "infrastructure surcharge" based on the size of a meter line: $5 more 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.

In public comment before the board's vote, Hiatt suggested a billing scheme based on the cost of electricity for pumping water uphill, or the higher the elevation of a customer, the higher the rate.

To do so would "add an element of fairness that is not in the system right now," he said.

The idea was supported by representatives for conservation organizations who spoke at the meeting.

Afterward, Las Vegas Chamber of Commerce spokeswoman Cara Roberts said small businesses could be affected disproportionately by a rate increase.

Contact reporter Keith Rogers at krogers@reviewjournal.com or 702-383-0308.