An increase in water charges recommended by a citizen's committee comprised of community stakeholders went into effect Jan. 1, 2014.
The increase was recommended by the Integrated Resource Planning Advisory Committee (IRPAC), which was established by the Southern Nevada Water Authority in 2012 to help guide future water resource planning for Southern Nevada.
The advisory committee—whose members were appointed by SNWA's Board of Directors—represents a cross-section of community residents, businesses, chambers of commerce, and educational, environmental and financial sectors. Committee members were tasked with developing recommendations on issues affecting SNWA, including funding.
On Sept. 26, 2013, the committee recommended to the SNWA Board of Directors that water charges be increased to pay for essential water infrastructure in Southern Nevada, and these recommendations were approved by the Board.
The committee’s recommendations included the following:
Additional information about the rate increase is included in the SNWA Rate Increase Summary document.
The complete list of recommendations, as well as details about the committee’s evaluation process, are contained in the IRPAC Recommendations Report.
Before the recommendations went into effect, they were approved by the SNWA member agencies. The member agencies also considered a Business Impact Statement before approving changes to rates and charges.
(per 1,000 Gallons)
|Infrastructure Charge per Meter per Month|
|Residential- 5/8" & 3/4" meter sizes||$5.00||$5.64||$6.36||$7.18||$8.11|
|Residential- 1" meter size||$19.21||$20.42||$21.79||$23.34||$25.10|
|Residential- 1.5" meter size||$38.41||$40.83||$43.56||$46.67||$50.19|
|Residential- 2" meter size||$61.46||$65.34||$69.70||$74.67||$80.31|
|Residential- 3" meter size||$122.90||$130.66||$139.38||$149.32||$160.60|
|Residential- 4" meter size||$192.03||$204.15||$217.79||$233.32||$250.93|
|Residential- 6" meter size||$384.05||$408.29||$435.57||$466.63||$501.85|
|Residential- 8" meter size and larger||$614.47||$653.26||$696.89||$746.59||$802.95|
|Non-Residential- 5/8" & 3/4" meter sizes||$19.05||$19.69||$20.41||$21.23||$22.16|
|Non-Residential- 1" meter size||$36.08||$37.29||$38.66||$40.21||$41.97|
|Non-Residential- 1.5" meter size||$72.16||$74.58||$77.31||$80.42||$83.94|
|Non-Residential- 2" meter size||$115.45||$119.33||$123.69||$128.66||$134.30|
|Non-Residential- 3" meter size||$230.90||$238.66||$247.38||$257.32||$268.60|
|Non-Residential- 4" meter size||$360.79||$372.91||$386.55||$402.08||$419.69|
|Non-Residential- 6" meter size||$721.57||$745.81||$773.09||$804.15||$839.37|
|Non-Residential- 8" meter size||$1,154.50||$1,193.29||$1,236.92||$1,286.62||$1,342.98|
|Non-Residential- 10" meter size and larger||$1,659.59||$1,715.35||$1,778.07||$1,849.51||$1,930.54|
|Non-Residential- 5/8" & 3/4" meter sizes Fire Meter||$3.34||$3.34||$3.34||$3.34||$3.34|
|Non-Residential- 1" meter sizes Fire Meter||$6.32||$6.32||$6.32||$6.32||$6.32|
|Non-Residential- 1.5" meter sizes Fire Meter||$12.63||$12.63||$12.63||$12.63||$12.63|
|Non-Residential- 2" meter sizes Fire Meter||$20.21||$20.21||$20.21||$20.21||$20.21|
|Non-Residential- 3" meter sizes Fire Meter||$40.41||$40.41||$40.41||$40.41||$40.41|
|Non-Residential- 4" meter sizes Fire Meter||$63.14||$63.14||$63.14||$63.14||$63.14|
|Non-Residential- 6" meter sizes Fire Meter||$126.28||$126.28||$126.28||$126.28||$126.28|
|Non-Residential- 8" meter sizes Fire Meter||$202.04||$202.04||$202.04||$202.04||$202.04|
|Non-Residential- 10" meter sizes Fire Meter||$290.43||$290.43||$290.43||$290.43||$290.43|
SNWA’s bond obligations—effectively the mortgage for the community’s water treatment and distribution system—are scheduled to increase by nearly $80 million by 2016. Most of the projects were constructed in the 1990s and 2000s to provide a safe and reliable water supply to Southern Nevada, and were financed using long-term bonds. These projects include a 300-million-gallon-per-day water treatment facility, lateral transmission pipelines, a new drinking water intake within Lake Mead necessitated by the worsening drought, and more.
For more than a decade, customers’ costs associated with these facilities were effectively subsidized by new connection fees paid by developers, providing existing residents some of the Southwest’s lowest water bills. However, the economic crisis that began in 2008 all but eliminated that funding source.
Why is the Southern Nevada Water Authority increase water bills?
While the Infrastructure Charge, implemented in 2012, provided a solution to SNWA’s near-term funding challenges, the SNWA’s annual debt service payment is scheduled to increase by nearly $80 million over the next three years. The projects associated with this debt service include the large capital projects that were constructed in the 1990s and 2000s to provide a safe and reliable water supply in Southern Nevada. Some projects were constructed to accommodate the increasing demands including a new treatment facility and lateral transmission lines. Other projects, including the third intake, are needed to ensure water quality and drought protection from a shrinking Colorado River. These facilities are essential, whether a person uses 4,000 gallons a month or 40,000 gallons.
How will my bill increase?
A typical residential customer with a 5/8-inch or 3/4-inch meter using 10,000 gallons per month would see an increase of $1.04 on his or her monthly bill starting in January 2014, eventually increasing by 2017 to $4.92. For all customers, the Commodity Charge would increase $0.04 per 1,000 gallons in 2014. Because part of the proposed increase is usage-based, conservative water users would see a smaller increase than those who use large amounts of water. For residential customers with a 5/8” or 3/4” meter, the Infrastructure Charge would increase $0.64. Other meter sizes would increase correspondingly.
Why not deal with the debt increase in 2016 when the payment is due?
Last year, the SNWA Board of Directors established the Integrated Resource Planning Advisory Committee to develop recommendations on issues affecting the SNWA, including funding. Over the last year, the advisory committee – made up of stakeholders representing a broad spectrum of interests within the community – has been meeting regularly to consider the funding challenges faced by the SNWA. One of their principal recommendations was to implement a smaller rate increase over a longer period of time, rather than one large increase in 2016. They felt this was important for residents and businesses alike, as it provided the time needed to adjust to a new rate structure.
Why didn’t the SNWA stop building system expansion projects when the economy slowed several years ago?
Most of the revenues associated with this increase will be used to pay for projects that were completed a decade or more ago but for which the SNWA must still make bond payments, or for the new drinking water intake in Lake Mead, which is driven not by growth, but by extreme drought on the Colorado River. In response to the economic slowdown, the SNWA deferred $395 million in construction projects and reduced its workforce. In fact, these reductions are the reason this increase was not required sooner.
Will this increase make water bills unaffordable?
Even after the additional charge is incorporated, water bills in Southern Nevada will remain less than in the average Western city despite our arid climate. Cities with similar traits such as size, population or climate such as Santa Fe, NM; San Diego, CA; Phoenix, AZ and Seattle, WA all pay higher water rates.
Why doesn’t the SNWA just reduce its salary expenses instead of increasing charges?
The SNWA’s personnel costs represent a very small percentage of its operating expenses—about 14 percent. In fact, SNWA's overall payroll budget has decreased by more than 5 percent over the past four years. The vast majority of funds associated with this proposed increase will be used to make debt service payments on facilities that have already been completed with long-term financing or are currently being built.
How are businesses with fire line meters affected?
One of the principal functions of the advisory committee was to evaluate how the rate increase would be implemented and how customers would be affected. As a result, the advisory committee spent considerable time evaluating rate impacts to customers with fire line meters. After weighing the options, the committee chose to not recommend an increase to the existing fire line meter rates, and instead cap them at the existing 2013 rates. Therefore, customers with fire line meters will not see any increase to those meters.
How is this increase related to the pipeline project to White Pine County?
This rate increase will not be used to build the in-state groundwater project, which is still in the permitting stage. This rate increase is used to make bond payments for debt previously issued for capital construction projects that are currently underway or completed.
How has the information about the increases been communicated to residents and businesses?
Public workshops were held throughout October 2013 to explain the committee?s process and outline its funding recommendations. Announcements and details about the increases were communicated on SNWA.com; through radio advertisements, news releases, member agency newsletters and websites; water bill inserts; at SNWA board meetings; and via SNWA social media channels. Businesses were invited to sign up on SNWA.com and social media for information about business-related impacts. In addition, residents were notified about public hearings in November and December, providing an opportunity to comment on the increases. An online form for public comment also was made available.
The formation of the Integrated Resource Planning Advisory Committee is in keeping with the SNWA’s history of seeking input from citizens advisory committees to help shape policy and program directives.
The committee members include stakeholders who represent a broad spectrum of community interests including residents, senior citizens, gaming, development, small business, golf courses and schools. The advisory committee worked alongside a financial subcommittee for more than one year to tackle funding issues.
The advisory committee's meetings are open to the public; agendas are posted three days in advance of meetings. If you'd like to be notified of upcoming IRPAC meetings, please fill out the Integrated Resource Planning Advisory Committee Interest Form.
As the IRPAC process was under way, the SNWA Board approved creation of a Technical Review Committee to assist both the IRPAC and the SNWA Board in ensuring that any rates adopted were based on sound data, assumptions and methods.
The committee's five members were appointed by SNWA's Board of Directors, based on recommendations from IRPAC. The committee represents community residents, businesses, chambers of commerce, education, environmental and financial sectors.
Copyright © 2014 Southern Nevada Water Authority