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Potential Increase In Water Rates
NOTICE TO VIRGIN VALLEY BUSINESSES OF POTENTIAL INCREASES IN WATER RATES AND SYSTEM DEVELOPMENT CHARGES
October 24, 2017
The purpose of this notice is to formally advise Virgin Valley businesses of potential increases in culinary water rates and system development charges. In evaluating the District’s culinary rates, the District has considered, among other things, the expenses of providing water to customers including capital facility projects and basic operating and maintenance costs. In examining system development charges, the District has considered its water rights, available sources of water, the need for capital improvements, growth projections, and related factors.
The mission of the Virgin Valley Water District (District) is to provide safe, reliable drinking water to the citizens and businesses of the Virgin Valley. The District is funded primarily by its customers’ water use, the associated payment of water bills and related charges. The District does not rely on property taxes or grants from governmental entities to augment its budget. Over the past several months, the District has examined its culinary water rates and system development charges.
The District was formed in 1993 and rate increases, historically, have been relatively few and far between. Nevertheless, when water rates have changed, the increases have generally been substantial. In an effort to prevent imposing large increases all at once on rate payers, the District has more recently explored adjusting rates and charges in small increments on an annual basis and these matters have been discussed in the District’s public meetings over the past several months. The District has also engaged experts with experience in setting water rates who have assisted in developing rate options that would be financially sustainable for the District while also affordable and equitable for rate payers. WaterWorth, one of the primary tools the District has used in this effort, has helped the District understand how water rates are performing now and how can they can be optimized to achieve the District’s goals.
In connection with the District’s consideration of possible increases in water rates and system development charges, the District will prepare a business impact statement and invites you and other Virgin Valley businesses to submit data, documents, and other information to the District concerning whether you believe the increases would impose a direct and significant economic burden upon a business or directly restrict the formation, operation or expansion of a business. You will have 15 business days from the date of this notice to provide such information. Responses should address the following:
1. Would increases in water rates and/or system development charges impose a direct and significant economic burden upon your business? Please explain.
2. Would increases in water rates and/or system development charges restrict the formation, operation or expansion of your business? Please explain.
Please be specific and provide as much detail as possible in response to these questions.
Following receipt of the responses, District staff will prepare a business impact statement. The District’s Board of Directors will then review and consider the business impact statement at a public meeting and make a determination as to whether the increases in water rates and/or system development charges would impose a direct and significant economic burden upon a business or directly restrict the formation, operation or expansion of a business. At a subsequent meeting, the board will hold a public hearing and decide whether to approve or disapprove increases in water rates and/or system development charges. Below is a summary of the schedule:
November 17, 2017 Deadline for businesses to respond to this notice
December 5, 2017 Public meeting to consider the business impact statement
December 19, 2017 Public hearing and meeting to approve/disapprove increases to water rates and/or system development charges
Responses should be mailed or delivered to the District at the following address and must be received on or before November 17, 2017 at 4:30 p.m. (PST):
Virgin Valley Water District
500 Riverside Road
Mesquite, Nevada 89027
Below is a summary of the changes to the District’s water rates and system development charges under consideration as different options have been discussed in the District’s public meetings. Also enclosed with this notice are two documents entitled (1) Proposed Rate Schedule Changes and (2) Impact Analysis of Proposed Rate Changes on the Average User (per meter size), which provide additional detail. The changes would entail setting the rates as shown with the annual increases occurring over the next four years and then re-evaluating and making adjustments every four years thereafter.
1. The Monthly Base Meter Rates and Block Rates would involve a 1% increase beginning in January 2018, with an additional 1% increase in July 2018, a 0.3% increase in July 2019, and a 0.3% increase in July 2020.
2. For simplicity and ease of implementation the Monthly Base Meter Rates have been rounded to the nearest $ 0.05 (five cents) and the Block Rates rounded to the nearest $0.01 (one cent)/thousand gallons.
3. The System Development Charge (the charge to developers to help offset the cost of infrastructure for future growth) is increased to $2,500 per equivalent dwelling unit (EDU) in the first year with annual increases of 3% per year thereafter.
4. For simplicity the System Development Charge has been rounded to the nearest $5.00 (five dollars).
5. The Impact Analysis of Proposed Rate Changes on the Average User (per meter size) shows the effect of the rate increases on the average user for each meter size (Exhibit A). Impacts of changes to the Base Meter Rate and Usage Block Rates are shown separately (Exhibit B). The analysis was prepared using actual water usage numbers from calendar year 2016. The low use number is based on low water usage during the winter; the high use number is based on high water use during the summer.
Finally, each customer currently pays a Debt Reduction Fee as part of the customer’s monthly bill. This Debt Reduction Fee will be reduced by $0.70 / EDU per month starting with the April 2018 billing period. It will then be reduced again by $1.00 / EDU per month starting with the July 2019 billing period. These reductions will more than offset the proposed rate increases in the next four years for the average customer.