Rates and the economic value of water

/Rates and the economic value of water
Rates and the economic value of water 2016-05-20T14:37:12+00:00

When the Virgin Valley Water Board adopted a 36% rate increase for existing base and volumetric usage rates in 2010, it lacked, as did two previous rate studies, provisions for any capital projects or deferred maintenance. Nor, did the rate increases factor in anticipated conservation on the part of consumers even though the District staff and the board expected conservation. The board’s failure to include provisions for any capital projects or deferred maintenance is also part of the reason for a lower bond rating from Moody’s.

Other issues contributing to rates include legal squabbles, arguably unwise water leases and purchases, and the lack of long-term planning and market studies. Most, if not all of the problems, can be traced to certain board members attempting to hide the true cost of water from the community while cutting deals that allegedly benefit the few at the expense of the majority.

In a public relations gimmick, Virgin Valley Water District employees and board member Barbara Ellestad established a committee. Members include golf course developers, a representative of Bunkerville Irrigation Company (BIC) shareholders, the Mesquite Irrigation Company (MIC) shareholders, and  a member of The Chamber of Commerce.  Nothing changed.

Some of the current members have criticize me for bringing up issues about the budget by saying that “you voted for it and you should know what you are voting for.” Well, I am not voting for a line-item budget that does not serve the public and hides from them costs that are either unknown or designed to profit from water sales instead of meeting current and future demands. allocation of water costs

Here are some of my reasons:

  1. First and foremost, this budget intentionally hides from the public the intent by some on the current board to make money from share leasing while ignoring the importance of keeping our water here to best serve the public.
  2. I cannot supporting moving $50,000 from Vanguard to the General account when we still have a lot of possible replacement demands.
  3. The budget allocates $165,000 for legal fees. We have not decided about an in-house attorney. I also think the amount may be too high, given all our maintenance requirements.
  4. The budget does not adequately explain to the public why we now need a treatment plant with a budget cost that has grown from $500,000 to $1.5 million.  Even this amount might not be adequate.
  5. The Budget shows $200,000 to resolve the Bella Horizon pressure problem, but have not fully discussed that issue.
  6. We have not set aside money to purchase land for the proposed new well in Lincoln County.
  7. The budget shows $35,000 for a truck in both equipment and maintenance.
  8. There is an increase in insurance costs associated with adding human resource coverage as part of a new plan and other unknown factors at this time.
  9. We still have not resolved the cost of a transmission line across the river.
  10. We have not resolved the cost associated with hydrants.
  11. I have concerns with the agreement with Iceberg.rate setting
Project Planning and Phase as a Background

Project Planning and Phase as a Background

We need a budgeting process that is responsive to our stakeholders, allows the Board to generate adequate revenue pictures and is consistent with industry practices and allows us to allocate water costs in a responsible way that satisfies our customers.