What You Need To Know About Proposed Water Rate Increase & How It Affects Business

Water rates are going up.  The question is by how much and whether the level of increases is fair and reasonable for everyone, residents AND businesses.

The staff of the Southern Nevada Water Authority (SNWA) has proposed three alternative rate increase options, each of which may significantly impact your business.  Depending upon the option approved by the board of the SNWA, water rates on your business could rise anywhere between 15 to 300 percent.  The SNWA board will vote on this matter on Wednesday, February 29. If passed, these rate increases will take effect later this spring.

The Chamber has been actively engaged in this issue, talking with the SNWA about the disparate impacts of the proposed increases and working with other business organizations to study how each of the three options will affect different types of businesses.  We need your voice now – to make sure that the SNWA board understands the disproportionate effects that these increases could have on the employers of this community, and the resulting impacts.

Protect your business, your employees and your bottom line by engaging in this important issue.  Below you will find information about the water rate increase options, why they are being proposed and how they are likely to impact your business.

Why does the SNWA need to raise water rates?

The SNWA needs to finish building and financing the third intake “straw” at Lake Mead, vital to ensuring that the lake can continue to be a reliable source of water.  Originally, funding for the third straw project was through connection fees to new housing; because of the recession and collapse of the housing construction market, this funding source has nearly dried up.

Why is the third straw necessary?

The third straw secures Lake Mead as a water source even if the water level drops below current out-take levels. Availability and sustainability of quality water for both residents and the business community is paramount. Having a reliable, dedicated water source also is a major factor in courting businesses to form roots in the Las Vegas community or encouraging others to expand them.

What are the rate increase proposals currently under consideration and how would they affect my business?

Three different rate increase options are currently under consideration by the SNWA board, which is scheduled to vote on Wednesday, February 29. The three options are:

Option 1:  A three-year commodity charge

  • This option is based solely on water usage, not the size of your water meter.  It would add an additional commodity charge of $0.76 per every 1,000 gallons used, for a total commodity charge of $1.06 per 1,000 gallons.
  • Because this rate is based on water usage, high water users – both residential and business - would be more impacted than low water users.  

Option 2:  A three-year infrastructure surcharge

  • A monthly surcharge would be assessed for each meter, based on the meter’s size; the larger the meter, the higher the increase. Amount of water used is not a factor. 
  • The vast majority of residential users (more than 450,000 of the 515,000 total meters) would incur a fixed surcharge of only $5.00 per month.
  • Businesses, on the other hand, which nearly always have at least one regular meter and at least one fire meter, may see increases from 15 to 300 percent of current bills.  Increases will be assessed on both regular meters and fire meters regardless of whether a business uses them. 

Option 3:  A three-year blend of Options 1 and 2: commodity rate and infrastructure surcharge

  • This option, a combination of Options 1 and 2, includes a small additional commodities charge and a surcharge based on meter size.
  • The commodities charge increase is $0.05 in 2013 and will be raised $0.05 per year until 2016.
  • Much like Option 2, the surcharge on the vast majority of residential customers is fixed at $5.00, while the surcharge on individual businesses will vary greatly.

Even though each of these options includes a residential rate increase, water bills on certain businesses could go up hundreds or even thousands of dollars each year, based on analysis by Hobbs, Ong & Associates, Inc., a firm contracted by SNWA to analyze the rate increase options.  Under Option 2, for example, residential consumers of water  – who make up more than 450,000 of the nearly 515,000 water meters in Southern Nevada  –  will only pay $5 more per month.  Businesses, on the other hand, may see their bills go up as much as 300 percent. 

What does the Chamber think?

The Chamber believes there is a fourth, more fair and reasonable approach – a “Modified Option 2.”  Under this option, residents would pay an amount that more closely reflects their fair share of the infrastructure costs – around $10 per month for most residential consumers. It would, in turn, lessen the harmful effects of disproportionate increases on businesses under Option 2 as currently proposed.  In essence, a modification of this nature would be less harmful to the businesses that employ people within this valley and more supportive of job creation and the economy.

The chart below shows some examples of the fixed rate that you would pay under the Modified Option 2 (as supported by the Chamber) compared to Option 2 as currently proposed.

Fixed Charge by Meter Size Modified Option 2 Option 2
Residential – 5/8” & 3/4” meter sizes $9.98 $5.00
Non-Residential – 5/8” & 3/4” meter sizes $10.71 $19.05
Non-Residential –  1” meter size $20.27 $36.08
Non-Residential –  2” meter size $64.85 $115.45

Fixed Charge – Fire Meters

Non-Residential – 6” meter size $162.12 $288.63
Non-Residential – 8” meter size $259.39 $461.80
Non-Residential  – 10” meter size $372.65 $663.84

Even under a Modified Option 2, Southern Nevada residential water costs will be markedly lower than major cities in other Western states, such as Arizona and California. Currently, residential water bills are some of the lowest in comparison to other Western cities, including Phoenix and Los Angeles.  In fact, the average residential water bill is $37.50. Click here to see a regional comparison of residential water rates.

Can I see what my rate increases will be?

If your business is located within the service area of the Las Vegas Valley Water District, then yes, to some extent.  You can go to the LVVWD.com website to calculate part of the rate increase under the proposed three options.  You cannot calculate the entire increase because meters that are 6” or larger (fire meters) are not included in the calculator.  For many businesses, the large fire meters will account for the high increase in their water rates.

If your business is in Henderson or North Las Vegas, you cannot go online to calculate how the increase will affect you. 

Call to Action:  What you can do to protect your business:

Contact the members of the SNWA board as soon as possible and let them know you would like them to consider a Modified Option 2, where most residents would pay about $10 per month for the infrastructure surcharge.  Tell them how the current proposals will impact your business. 

Send your emails or letters to:

North Las Vegas Mayor Shari Buck
bucks@cityofnorthlasvegas.com

Clark County Commissioner Mary Beth Scow
ccdistG@clarkcountynv.gov

Clark County Commissioner Steve Sisolak
ccdistA@clarkcountynv.gov

Henderson Councilman Sam Bateman
sam.bateman@cityofhenderson.com

Las Vegas Councilman Bob Coffin
bcoffin@lasvegasnevada.gov

Clark County Commissioner Tom Collins
ccdistB@clarkcountynv.gov

Boulder City Councilman Duncan McCoy
mccoydr@cox.net

Plan to attend the SNWA board meeting on Wednesday, February 29. It will be at 9:00 a.m. at the Molasky Corporate Center – 100 City Parkway, 7th Floor in Las Vegas.

If you have questions or need additional information, contact Paul Moradkhan, government affairs manager, at 702.586.3816 or at pmoradkhan@lvchamber.com.