By VERNON ROBISON
Moapa Valley Progress
The cost of developing new residential and small commercial properties in the Moapa Valley communities was reduced drastically last week. The Moapa Valley Water District Board of Directors voted on Tuesday, April 14, to make a significant cut to its fees for meter installation. The board also slashed fees of supplying water to newly subdivided parcels in the community.
The first of the two items discussed dealt with the district’s connection fees. MVWD General Manager Joe Davis explained that during recent discussions with the Board, concerns were expressed that the installation cost on meters might be too high for the current market conditions.
Davis pointed out that the district had seen almost no growth in the past four years. Only 13 meters have been installed during that time. Meanwhile, during 2009 and 2010, the district actually lost 16 meters out of its system due to non-payment on foreclosure properties, he said.
Davis explained that board members had expressed an interest in possibly lowering those fees in an attempt to encourage some new hook-ups that might be waiting for lower rates.
The current meter installation fees consist of two parts. The cost of equipment and supplies for the hookup averages between $1,500 and $2,000 for most residential and small business hookups. At the same time, an impact fee is charged at the time of hookup.
“The impact fee was instituted to be an equity buy-in for new customers to participate in the development of the system that is already improved and out there,” Davis said.
The current impact fees are currently between roughly $4000 and $6,000 for most residential and small business hookups.
Davis outlined several scenarios where the installation fees could be reduced by between 30 and 50 percent and noted that the decision was up to the board on what should be done.
Board member Randy Tobler expressed concern about whether the district would have adequate capacity to supply water to the lower Moapa Valley, if the reduction in rates should bring additional growth. He cited agreements, made in the more distant past with Southern Nevada Water Authority (SNWA), that committed the district to transport as much as 6200 gallons per minute of SNWA water through the MVWD system.
Board member Lindsey Dalley agreed that this was technically a concern. “Even though they (SNWA) are not taking that water, we committed that they could, anytime, flip a switch and pump that water through our system,” he said. “We are legally obligated.”
“I realize that we won’t see all of a sudden a huge wave of rapid growth because of this fee reduction,” Tobler added. “But I think it is our job to gauge the risk when you make a change like this.”
Board member Ryan Wheeler asked just what the risk was and what the limitations on growth the old SNWA agreements would actually impose.
Davis admitted that acording to a strict interpretation of the SNWA agreements, the district does not have capacity available in its main line to the lower Valley. But, in practice, the district could change its pumping strategies to adapt to the capacity problem. In doing so, the district could avoid a real crunch and would only be facing the capacity limits during the peak months of summer. In any case, careful management could allow capacity for an additional 500-800 meters in the system, Davis said.
“The capacity issue is a valid concern,” Davis said. “But you can shave things back and make it work and still meet capacity. Frankly, I’d rather have a meter in the ground collecting monthly charges. If you, all of a sudden start selling a lot of meters because of this, then you can always raise the price back up.”
Dalley questioned whether the impact fee was even needed anymore given current conditions.
“At the time that they instituted the impact fee, growth was ratcheting up and they needed to chase that with system improvements and expansions,” Dalley said. “But our system is in excellent shape and it is easily able to absorb 100 meters and not affect infrastructure. So why do we even need an impact fee at all?”
Davis pointed out that the district is still paying debts from earlier improvements and the impact fees were meant to bring new users into line with those expenses.
“To say that our system is completely up to snuff; I’m not sure I could take that leap,” said Wheeler. “We have been talking about the many improvements that are still needed. The impact fees are meant to capture the expenses of those capital improvements.”
MVWD Chairman Ken Staton made a motion to reduce the impact fees by 50%. The board approved the motion unanimously. This would drop the impact fee to $2,000 to $4,000 for residential and small business properties.
Next the board discussed reduction of the current fees charged for providing water service to newly divided parcels. Davis explained that the district had passed the Water Rights Dedication Ordinance in 2005 to deal with rapid growth at that time. In the ordinance, anyone wishing to subdivide land in the MVWD service territory had to either dedicate water rights to service the development or make a payment in lieu of those water rights. This was necessary before the district would sign off on the parcel map for the subdivision.
The payment in lieu of water rights option had historically been set by the current valuation of Muddy River Irrigation shares, Davis said. Currently that amount is $5400 per lot.
“The current board has raised questions concerning that valuation process for some time now,” Davis said.
In response to this, Davis said he had explored alternatives to valuation based on irrigation shares. Instead he looked at a valuation based on the direct cost to develop water resources at the district’s Arrow Canyon #2 wellsite. Factoring in the cost of drilling the well, building water treatment facilities, pipeline infrastructure to transmit water, environmental work and engineering costs, Davis calculated that the new water resource fee should be in the range of $2,500.
“That number is more representative of the cost of what it takes to actually bring potable water to the table, versus purchasing an irrigation share,” Davis said. “Those are true numbers on what it took to actually go out and develop and bring water resources.”
Dalley said that the time is right for the district to consider changing these fees. But he emphasized that the district should continue to put emphasis on the acquisition of new water resources to meet future demand.
“Water is a finite resource, you can’t just build a plant and create more like you can with power,” Dalley said. “Because of that, we need to be ever vigilant in acquiring resources and make sure that we are allocating resources to purchasing water as it becomes available.”
Tobler said that he had never been a fan of the Water Rights Dedication Ordinance.
“I understand that it was put in place because of high growth at the time, but we are in a different position now,” he said. “I might even be in favor of putting it (payment in lieu of dedication fees) on hold for a while and then review it annually or something.”
Other board members were not as comfortable with doing away with the fee altogether.
“I don’t know if I want to go to zero,” said Staton. “I trust what Joe has done and I am comfortable with that. We can revisit it in the future and determine if we can do away with it altogether. But for now, I think this is a good option.”
Wheeler made a motion to reduce the payment in lieu of dedication to $2,500 from the current $7,500. The motion was approved with a unanimous vote.
