The Virgin Valley Water District (VVWD) continued their months-long discussion of options to increase revenue and balance the district’s budget at the regular meeting on July 15.
Mike Chandler, of the district’s engineering consulting firm of Bowen Collins and Associates, reviewed the projected financial situation for the district and presented the board with several options for raising water rates. If rates are not changed the district projects a deficit of over $19 million in the next six years. Driving the projected deficit is the high cost of paying off bonds that were used to purchase water shares and the need for funding new capital improvements.
Chandler provided the board with possible rate structures that included an increase in the base rate for users and possible surcharges to retire debt and fund capital improvements. The surcharges would be $10 per month for residential customers using three-quarter inch meters. Approximately 97 percent of district connections are for residential customers with three-quarter inch meters.
Current rates for most residential customers include an $18 per month base rate plus additional fees based on actual water usage. The rate proposal presented by the consultant would increase base rates to $25 per month and increase fees for water usage. With possible surcharges, the base rate could increase to as much as $45 per month.
The proposed new rates would also establish a separate commercial rate for the first time. Currently commercial and residential users pay at the same rates. “Currently business users are being subsidized by residential ratepayers,” said Chandler.
One benefit of the new rates, according to Chandler, would be to encourage water conservation.
Other issues the board discussed were how to bill master meter users such as homeowner associations who have multiple units on one meter.
No decisions were made and the board will hold additional public meetings to discuss how new rates are developed.
In other business, the board heard a presentation from Wade Poulson, the general manager of the Lincoln County Water District (LCWD). Poulson presented the board with a proposal to start discussions on an “interlocal conceptual agreement” between the two districts that would allow VVWD to provide water to LCWD on an interim basis.
“Right now this is just a concept, and all we are asking is your approval to begin discussions,” said Poulson.
The water provided by VVWD would be used by the Lincoln County district to provide water to the Toquop Township development area which is a 13,000 acre area north of Mesquite. The VVWD would provide water on a wholesale basis while a water pipeline is built from the Tule Desert water source to the Topuop area by LCWD.
The board agreed to allow staff to continue discussions, however several board members expressed their concerns that supplying water to LCWD didn’t restrict growth and needs within VVWD. Board member Kraig Hafen asked Poulson, “What happens if LCWD doesn’t build the pipeline.” Poulson said that would be one of the issues to be worked out.
The board also denied a request from 13 homeowner associations to waive late fees that occurred during a transition of association management from Castle Management to Community Management and Sales. The problem occurred when the state seized checking accounts of Castle Management, which is currently under investigation. Water district attorney Bo Bingham suggested that the associations contact the state to recover the late fees from bonds and any available recovery funds.