By VERNON ROBISON
Moapa Valley Progress
A small class of customers, who have long enjoyed an exclusive sweet spot in the Moapa Valley Water District (MVWD) rate structure, is about to see that special rate tier eliminated once and for all. On Thursday, the MVWD voted to discontinue a grandfathered base rate applied to installed meters that had remained either locked or turned off since before 2005.
The standard base rate for MVWD customers is currently $34.43 per month. That rate is charged regardless of the water usage on the meter. Monthly water usage rates are then added on top of this base rate to calculate the total monthly water bill.
But for 73 MVWD customers that base rate is much lower. For those who fit under this special grandfathered rate tier, that amount is only $10.84 per month.
MVWD General Manager Joe Davis explained that the base rate was first established as a result of a rate study done by Red Oak back in 2005. Because the district had taken on significant debt, the study recommended that the district set up a base rate to ensure steady income to cover the debt payments and other obligations of the district. Then the water usage tiers would continue to fund everything else, Davis said.
When the base rate was instituted, it was applied to every meter in the system, Davis said. But there was a number of customers who had meters that were locked and had never had water run through them at all. These customers came to the board and asked that an exception be made, Davis said.
“In response the board at the time carved out a special base rate for them,” Davis said. “At that time, the staff felt that this base rate would just cover the cost of sending someone out to check on the meter once a month to make sure nothing had changed.”
But Davis said that this special rate exempted this group from having to participate in the high costs of developing and maintaining the MVWD system over the years.
“Just because the meter is locked doesn’t take away all of the costs involved with the district being prepared to fulfill its obligation to service that meter,” Davis said. “We have had to bond to build facilities and meet current federal mandates; and we have had to pay for infrastructure such as wells, pumps, pipe lines, tanks, treatment facilities, disinfection. They haven’t had to participate in any of that.
So basically they have maintained equity in the system for all these years without having to pay for it.”
This had been allowed to go on for many years because there was no urgent need to address it, Davis said.
But the district is currently considering applying for funding to drill a new well that is needed at the Arrow Canyon well site. Agencies that regulate that funding will take a close look at the district’s rate structure, especially to see if there are any inequities in the rates, Davis explained.
“When we apply for funding, they will go through our rates and they might find this rate tier in there,” Davis said. “At that point we will have to deal with it. They will make us get rid of it. So it is our recommendation that we just deal with it now.”
Logandale board member Lindsey Dalley asked whether the grandfathered customers might be given the option of selling the locked meters back to the district for the amount that they originally paid for them. “That way, at least they would be made whole,” Dalley said.
But Davis responded that this would cause a major administrative headache for the district. It would leave only two options, Davis said.
The first option is that the district would have to send crews out to pull the meters out from the parcel. This could be costly though because the connector to the meter would also have to be removed, Davis said. Often those connections run under asphalt surfaces which would have to be dug up and replaced. “The cost of removing the meter could add up to as much as the meter cost to begin with,” Davis said.
The second option would require a complex tracking effort to be put into place to keep detailed records on the history of each meter. This would be needed in case a future buyer obtained the property and claimed he/she had rights to the locked meter.
“We would have to track every one of those parcels and that is an administrative nightmare,” Davis said. “It is just easier if the meter doesn’t exist.”
Furthermore, MVWD attorney Byron Mills pointed out that if the board set a policy that it would buy back unused meters, it could open a floodgate of customers who had purchased meters on property that had never been developed.
“It you tell those 73 that you will be buying back their meters, pretty soon others will be lining up,” Mills said. “You’d be obligated to make good on the policy for everyone. And now it won’t just be 73, but it will be more like 500.”
Board chairman Ken Staton said that it was clear that the buyback option wouldn’t work. “I came here tonight thinking that I would be in favor of buying them back,” he said. “But that is clearly out of the question.”
Board member Randy Tobler said that it was cleaner just to eliminate the special rate tier altogether. He pointed out that there was never any legal obligation for the district to continue that rate status in perpetuity.
“When I was first running for this position, that was one of the things that I kept hearing from the voters,” Tobler said. “That we needed to stop making these special deals for people. I’m comfortable with just making all the rates the same at this point. These people were given a special exemption. They have gotten a discounted rate for many years. So they have gained something in the process. But now we are the point where we need to be proactive as we go out for funding. It is time to clean it up.”
Tobler made a motion to remove the special ‘off and locked meter’ rate. The board approved the motion unanimously.
