I-Team: Grassroots Effort Fights Water Rate Increases - 8 News NOW

I-Team: Grassroots Effort Fights Water Rate Increases

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LAS VEGAS -- The water bills for southern Nevada homeowners and businesses are about to go up. The only question is by how much. For some, the hit could be substantial.

Elected officials who make up the board of the Southern Nevada Water Authority will meet Wednesday to choose from three options now on the table, each with different consequences for different customers. But unlike other financial proposals made by SNWA, this one is getting a lot of public scrutiny.

SNWA needs the money to cover debts from the so-called third straw to Lake Mead, a project that will cost a lot more than projected. SNWA basically counted on growth in the valley to continue its torrid pace so connection fees paid by developers would cover the cost.

Now, water officials say, no one could have foreseen that growth would collapse, just as they also have said no one could have for seen a 10 year drought. Actually, people saw both coming, just not the SNWA. So, do we need higher water bills because of bad luck, or bad planning?

Like most southern Nevadans, Adam Stryker has paid little attention to the operations of local water agencies. But when news surfaced about a proposed rate increase, members of his pro-business group began calling to complain.

Stryker initiated a robo-calling campaign to put pressure on water board members and put up a website about SNWA's plan to have water customers pick up the tab for the third straw, a $700 million project that became a $1 billion dollar project now a year behind schedule.

"They ran out of money so they came back to the ratepayers and said, 'You guys are going to have to pick it up.' If I am going to buy a new Jaguar, I don't go to the Jaguar dealership and tell them I want a new car, here's $25,000 in cash and I will call my boss on Monday and ask for a 30 percent raise and they will pay for it. That's what they did," said Stryker.

Critics say local water agencies, especially SNWA, were not only enablers but cheerleaders for the huge growth spurt of the past 25 years. During the good times, the business community rarely criticized SNWA's spending habits, nor did the elected officials on the SNWA board. Whatever Water Czar Pat Mulroy wanted, she got.

But now that growth has stopped and budgets have shrunk, pro-business groups are raising the same concerns long mentioned by pro-environment critics -- where did all the money go?

"It's just this huge amount of money was borrowed with no good plan, I don't think, to pay it back," said Clark County Commissioner Steve Sisolak.

Sisolak says there is no question that some form of a rate increase is going to be approved, though he's not sure which one, because defaulting on a $3 billion debt would be even worse.

Sisolak is one of the only elected officials who has questioned Mulroy's spending. He stopped the rate hike from going forward with little debate.

"I pushed to have this study done because they weren't even going to have this done. They were just going to pass rate increases six months ago," he said.

Sisolak says it is time for a top to bottom review of spending by water agencies. Budget cuts alone cannot make up the money needed to service water agency debt, but should cast light on carefree spending, much of which has been reported by the I-Team over the years.

The agency spent $80 million for a string of ranches in White Pine County, which cost up to $80,000 a month to operate. Then there's the $250 million for the Springs Preserve and millions per year to service the debt. Another $60 million to buy the Warm Springs Oasis and hundreds of thousands per year to celebrity chef Wolfgang Puck to run a cafe at Springs Preserve.

About $25 million was paid to super-lobbyist Harvey Whittemore to buy a percentage of his water rights in Coyote Springs, which more than paid for Whittemore's 40,000 acres.

Millions more per year has been spent on numerous PR contracts and advertising. They have as many as 10 lobbyists during legislative sessions, who charge the public for their expensive dinners, even to wash their cars.

And then there are the generous salaries for water agency employees. The average salary at the SNWA is $77,000 a year and nearly 30 percent of water employees earn more than $90,000 per year. Mulroy's base salary of $290,000 is the highest in local government.

"If you are asking my constituents and the citizens to make a sacrifice and pay this, and it's easy to say its only $5, but it's $5 here, $20 for gas, $10 for electric, $5 for this, cable goes up. People are just getting pounded with this day after day. I think we have to start looking at what these spending criteria are," said Sisolak.

Stryker says he is most amazed by the hubris of the water agencies, who assumed it must be a plot -- that someone else must be behind a manufactured outpouring of anger.

"Nobody put us up to it. It was the people that didn't know who to talk to and they came to us and said, 'Can you help?'" he said.

The SNWA board could vote for one of three options or it could postpone a decision for 30 days to allow time to study another proposal from the Chamber of Commerce. But no matter how you cut it, your rates will go up.

And if you think this hit to cover $3 billion in debt is painful, think what could be looming down the road if SNWA's plans for the rural pipeline, which would be five times as expensive, get the green light. 

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