By Vernon Robison
Moapa Valley Progress
Published September 17, 2008
The Moapa Valley Water District Board of Directors voted to increase Water Resource Fees by nearly 5% at a meeting held on Thursday, September 11. The fee pays for the acquisition of water resources on development that cannot dedicate a supply of water to the district. The fee was adjusted up to $9166; up from $8750 per household.
Board members decided that the increase was necessary to keep in line with current fair market value of water resources.
In May, the Southern Nevada Water Authority increased a standing offer for acquisition of Muddy Valley Irrigation Company Shares to $50,000 per preferred share. Preferred shares are currently quantified at six acre-feet per share. The SNWA offer thus set the floor on the market at $8,333 per acre-foot. The MVWD requires 1.1 acre feet of water to be dedicated per new unit being developed in the community. The new market price of 1.1 acre feet, then is $9166, significantly higher than the $8750 fee currently being charged.
“We don’t want to be cheaper than the market,” said MVWD Board Chairman James Robison. “That is dangerous territory. If we are, we run the risk of developers taking all that we have and selling their own shares to SNWA for a higher price. Then, we lose our reserve supply and the developer’s water is sold out of the valley.”
In addition to the fair market value increase, MVWD staff recommended that the board institute an additional 15% premium on the fee. “Setting our price above the market gives an incentive for developers to dedicate their water as opposed to purchasing it from us,” said MVWD General Manager Brad Huza. Thus the recommended fee would have been set at $10,541 per unit.
But Board Member, Glen Hardy expressed concerns that this would only hurt the small local developer. “We haven’t sold any meters in months,” Hardy said. “It bothers me to put this increase in when everything in the market is so flat.”
Hardy stated that he is hearing from many people in the community who complain that they can’t afford to split their large lots. “After they pay for water, power and offsites they are out $100,000 right off the top,” Hardy said. “In this real estate market that is a real problem for people.”
“We certainly don’t have a shortage of water right now,” Hardy concluded. “There isn’t a lot of meters being sold. Couldn’t we postpone this increase until things pick up a little? Is there anything creative we can do?” Huza suggested that the 15% premium could be held until a later date when the real estate market picked up.
But Board Member, Guy Doty, felt that the premium was a good idea. “I see value in saving the district’s water as a future resource,” Doty said. “Putting a premium on MVWD water gives an incentive for developers to look to the private sector to purchase water. It seems to be available out there since SNWA is picking it up. If developers get it there, they will bring it to the district and it will stay in the community. I really encourage using the 15% to keep the water here.”
A motion was made to raise the fee to the market value of $9166 and to hold off for a time on the 15% premium. The change would be effective November 1. At that point, the board would re-evaluate the fee on a regular basis to keep it in line with the market and to decide when to re-institute the 15% premium. The motion was adopted with a unanimous vote.
