Notice to Virgin Valley Businesses of Potential Increases in Monthly Metered Water Rates

NOTICE TO VIRGIN VALLEY BUSINESSES OF POTENTIAL INCREASES IN MONTHLY METERED WATER RATES

November 4, 2020

 

The purpose of this notice is to formally advise Virgin Valley businesses of potential increases in culinary water rates. In evaluating the Virgin Valley Water District’s (District) 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.

 

The mission of the 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. Since 2017, in an effort to prevent imposing large increases all at once on rate payers, the District has adjusted rates and charges in smaller increments on an annual basis. These matters have been and will be discussed in the District’s public meetings. 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, 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 proposed 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 impose a direct and significant economic burden upon your business? Please explain.

 

  1. Would increases in water rates 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 proposed increases in water rates 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. Below is a summary of the schedule:

 

November 20, 2020    Deadline for businesses to respond to this notice (due by noon)

 

December 1, 2020       Public meeting to consider the business impact statement

 

December 15, 2020     Public hearing and meeting to approve/disapprove increases to water rates

 

Responses should be mailed or delivered to the District at the following address and must be received on or before November 20, 2020 at 12:00 p.m. (noon – PST):

 

Virgin Valley Water District

500 Riverside Road

Mesquite, Nevada  89027

 

Below is a summary of the changes to the District’s water rates under consideration as different options have been discussed in the District’s public meetings. Also enclosed with this notice are the Proposed Culinary Water Rates for FY2022, FY2023, and FY2024. The changes would entail setting the rates as shown with the annual increases occurring over the next three years and then re-evaluating and making adjustments every three years thereafter.

 

  1. Changes to the Base Meter Rate and Usage Block Rates are shown (Exhibit A). Additional information regarding the rate increase can be found on the District’s website (click on the Board Business/Board Meetings tab and then click on the November 3, 2020 Agenda): https://vvh2o.com/board-meetings/

 

  1. The Monthly Base Meter Rates and Block Rates reflect a 2.5% increase beginning in July 2021, with an additional 2.5% increase in July 2022, and a 2.5% increase in July 2023.

 

  1. 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.

 

  1. Examples of typical water cost for a ¾” meter by year is shown (Exhibit B) for 8,000 gallon per month use and 14,000 per gallon per month use. The yellow highlighted years are the actual years considered in this three year proposed rate increase.

 

Finally, each customer currently pays a Debt Service Surcharge as part of the customer’s monthly bill. This Debt Service Surcharge will be reduced from $8.30/EDU to $7.20/EDU starting with the July 2022 billing period when the next bond is scheduled to be paid off. This reduction will help to offset the proposed rate increases in the next three years for the average customer.

 

Exhibit A                        Exhibit B

(Water Cost Examples for 8,000 and 14,000 Gallon per Month Use for ¾” Meter)