County manager Q&A focuses on water, sewer rates
June 8, 2014
Douglas County Interim Manager Larry Werner participates in a monthly question-and-answer forum online on The Record-Courier's daily Running Commentary. Anyone with questions is welcome to participate in the next scheduled forum on July 9 at 10:30 a.m. For a full transcript of the last forum, go online at recordcourier.com. Here are excerpts of the last forum:
Q. In past years of heavy development, water and sewer connection fees were used to subsidize utility rates instead of retiring debt as they should. Connection fees were also set at levels competitive with surrounding areas instead of based on the real cost of connecting. That left utility customers with both debt to retire future replacement reserves, making current user cost untenable. Are there any changes in development policy on the horizon to avoid repetition in the future?
A. I'm not sure how to answer this as the comments made by Jack are not necessarily complete in that all the revenues that go into the utilities are used to pay all the expenses including debt service and to create reserves and ending fund balance – so some if not all of the connection fees did pay debt. The specific answer is that the rates currently proposed would assure that the current operations are paid by current revenues.
Q. Do you think that the prospect of five years of 3.25 percent water and sewer increases are what has customers concerned?
A. I think that any rate increase is a problem for some of our customers. Unfortunately, rates need to cover the cost of the operation and as long as there are increases in services and supplies and changes in federal and state standards, there will need to be increases in rates.
Q. Is there a light at the end of the tunnel when sufficient reserves have been built up that perhaps annual increases will become unnecessary.
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A. Again, the answer is probably not but with the steps being taken by the board, the amount of increase can be somewhat contained. With the current proposal, reserves will be established to address some of the annual capital needs but there will still need to be bond issues to pay for major equipment and facility replacement in the future.
Q. Residents in the Johnson Lane area seem to be those with the biggest heartburn. What do you say to people who claim their rates were fine until the county consolidated the water companies?
A. Their rates may have been fine in their eyes but without consolidation and improvements by the county, the rates were insufficient to pay for additional water treatment facilites nor for future system replacement. The main issue would have been the need to construct arsenic removal facilites to meet federal and state standards.
Q. Throughout the discussion about water and sewer rate hikes, I have heard a lot about the county's needs for reserve funds and other worthy causes. However, I have not heard anything about the county looking to cut costs in some areas in order to move funds to those needs. Can you please comment on whether anything has been done to try to shift funds to those areas, rather than simply charging the customers more?
A. The utilities operated by the county are funded as enterprise funds which means they must operate within their own revenues, that is, the people that use the system should be responsible for paying for the system. The argument would be why should someone who gets no benefit from the system be responsible for paying for the system. The county has looked at expenses within the utilities to operate as efficiently as possible. The only area to shift funds from would be the general fund which funds public safety, parks and recreation, courts, roads and general government, all which are struggling to maintain appropriate service levels.
Q. Why doesn't the county charge a standby fee for those vacant home sites in anticipation of having to serve them?
A. The board has considered standby fees on several occasions and has decided not to pursue it. One of the concerns is that this use of standby fees has not been tested in Nevada courts so it's not real clear that we can impose them.
Q. If money was no object, what would be one project that you would want to "fix" in Douglas County.
A. Roads. Our concern is the ability to provide appropriate maintenance for existing roads and for construction of future needed streets and highways.
Q. How is the search for the new county manager going?
A. Not quick enough. Actually its going well, on schedule. The application period closes June 16. There was a status update presented to the Board of County Commissioners June 5.
Q. What have you enjoyed about your time as county manager?
A. The interaction with the community and the staff. Douglas County is a great place to live and work and I'm very appreciative that I've had the opporunity to work here.
Q. That does it for questions. Anything else you'd like to add?
A. Just a reminder about the Carson Valley Water and Sewer rate workshop 6 p.m. June 11 at the Johnson Lane fire station – and a thank you for this opportunity to talk to the community.