During its Sept. 17 meeting, the Virgin Valley Water District Board took a careful look at cost and revenue projections prepared by chief financial officer Wes Smith as he “set the table” to consider the next four-year window used by VVWD to set metered culinary water rates, system development charges (formerly called impact fees), Ordinance II and meter fees.
The board has established a process for setting new water rates in four-year blocks, to be defined one year in advance of the first year of the block so rate payers have time to budget for any changes.
The board will use Smith’s projections calculated in the WaterWorth financial modeling software to assist in setting its budget.
That complex process takes into consideration both past data in the district and future growth and cost of expanding the water system that serves Mesquite and Bunkerville.
The district covers the expenses of growth and maintenance of the system through monthly fees charges for water use, one-time development or “hookup” fees for added users, lease of irrigation water, receipt of .25 percent tax sharing from Clark County, interest earned on savings, and other sources.
When the board undertakes its formal process to finalize rates in the spring of 2020, it follows a state-prescribed process including public hearings and a business impact study before it can institute increases in ratepayer fees.
It currently assumes a calculated population growth rate of 2.75 per cent a year. Labor laws now require paying prevailing wage on public projects of $100,000 or more, a level set in the recent session of the Nevada legislature.
VVWD also seeks to assure personnel retention among its staff by providing competitive wages. With inflation of materials and wages, the cost of well drilling and system maintenance will increase.
Highlights of board discussion during Smith’s presentation included projections of reduced water use in new residences due to low-flow fixtures and low-water landscape; future acquisition of water will be energy intensive; and a significant budget increase for fiscal year 2021 must be planned to cover projected $400,000 added cost of litigation.
Board president Nephi Julien noted his concern that the average life of water wells and tanks generally tends to be shorter than estimated, prompting a need to begin district planning for capital projects earlier to accommodate an accelerated need for replacement.
Smith said the WaterWorth plan reflects past data that shows need to replace or rehabilitate an average of one well and one water tank per year to keep pace with population growth.
Smith’s tentative projection of ratepayer increase used in the financial model is 1.5 per cent each year over the four-year period, translating into a potential increased average cost of 85 cents per month.
If there is any bright spot concerning monthly water bills, it is the drop in VVWD’s debt reduction fee that was lowered by $1 per month in August.
In board actions, a bill for $60,550 from Overton Power District No. 5 was approved for power to recently completed Well 1A. Questioning the fact that power was not included in the bid specifications for the well, it was discussed that the process for that well has extended over several years due to BLM permitting, and OPD5 policies and rates have changed in the interim.
Payment of the charge was approved 5-0.
Summarizing status of current infrastructure projects, recently hired VVWD engineer Tyler Young reported that Well 34 drilling and pipeline construction in Lincoln County are on hold until Nov. 1 due to desert tortoise restrictions.
Well drilling contracts for 34 and replacement well 26A are currently out for bid. Young reported completion of both rehabilitation of Well 28A and patching of Hardy Way asphalt that was damaged in a water line blowout.
Hydrologist Aaron Bunker reported that Well 27A on Pioneer Boulevard is out of service while its motor is being repaired. The motor failed, causing a small electrical fire that was extinguished by staff.
The motor is less than a year old and will be repaired under warranty. Bunker reported that road maintenance work is being done on the Cabin Canyon road that provides access to district springs and precipitation gauge. Heavy rains damaged the dirt road this past year.
Wrapping up staff reports, district manager Kevin Brown reported that eight wells are available for water production: 1A, 2, 26, 28, 29, 32, and 33. He reviewed the incident that caused damage to the recently-acquired vacuum truck. A transfer mechanism failed and damaged the transmission case, taking the truck out of operation for three weeks. The repairs were done under warranty.
Brown recently met with new leadership at Las Vegas BLM office to discuss ongoing projects. VVWD holds water rights on BLM-managed land and frequently interacts with both BLM offices in the Las Vegas and Lincoln County districts.