County explores lower water rates
January 31, 2012
After four years of debate, Douglas County commissioners will get a look Thursday at a proposed consolidated water system which offers lower monthly water rates to the county’s 2,400 customers.
County staff has prepared two options for the board to consider.
Option one proposes the consolidation of the East and West Valley water systems into a single fund and Jobs Peak and Sheridan Acres into a single fund.
That proposal also assumes an annual transfer from the general fund of $188,500 annually for the Jobs Peak and Sheridan Acres systems.
No transfer is provided for the East and West Valley consolidation.
Option two calls for the consolidation of all four water systems without any transfer from the general fund.
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Each option offers lower water costs than the interim rates now in effect through fiscal year 2014.
County Manager Steve Mokrohisky said the assumptions made in putting together the cost models represent a “worst-case scenario” of no growth or outside funding, no changes in use or system reinvestment over the next two years.
“If any of these things turns – if utilization picks up or grants become available – there would likely be a benefit to the combined systems and additional opportunities to stabilize rates for the future,” he said.
Mokrohisky said the second option provides lower water rates for all customers on the county’s Valley water systems and provide the greatest overall cost benefit to all customers and residents.
The option also has three of the four systems paying the same rate of $57.53 a month with Jobs Peak at $79.39 the first year and $63.28 the second year, with Jobs Peak at $87.33 in fiscal year 2014.
That compares with the current interim rates which project the fiscal year 2013 rates of $63.31 for East Valley to $581.31 for Jobs Peak.
“Jobs Peak will continue to pay more due to their larger service size which is provided for in the cost of service analysis,” Mokrohisky said.
Over time, it is anticipated operational and administrative costs would lower due to the efficiencies and economies of scale derived from a single consolidation by improving cash management and consolidating accounting and budgeting functions.
Under option one, Jobs Peak customers would pay $181.40 per month the first year, and $199.57 the second. East Valley and West Valley customers would pay $55.54 the first year and $57.77 the second.
That option also requires a $188,000 transfer from the General Fund – paid by all county residents – each year.
Mokrohisky said county commissioners have continued to express their concern that water rates are too high and nonsustainable for several county water systems.
Even under option one, monthly rates for Sheridan Acres and Jobs Peak customers would remain at or above the affordability benchmarks set by the Nevada Board for Financing Water Projects.
“The goal throughout this process has always been to stabilize water rates for our customers, ensure cost-of-service by customer class, create cash management flexibility and streamline the budgeting, reporting and rate setting process,” he said.
Mokrohisky credited Public Works Director Carl Ruschmeyer and staff for taking a “creative and thoughtful” look at the structure.
A residents’ group is working on the Lake system rates and is expected to present options at the Feb. 16 meeting.
“Today is much different than two years ago,” Mokrohisky said, referring to an abandoned effort in 2010 to consolidate the Lake and Valley into one system.
“We were trying to swallow the elephant in one bite. When we regrouped, we really stepped up the discussion to purse Lake vs. Valley and that took away some of the dynamics and issues.”
If the board approves an option Thursday, a public notice will be posted and the resolution would come back April 5 for action. If approved, the new rates would go into effect July 1.
County commissioners consider options for new water rates after 5 p.m. Thursday, commission chambers, 1616 Eighth St., Minden.