Nevada lawmakers heard grim news Wednesday from the Southern Nevada Water Authority. The water authority says financial problems will make it tough to pay for a third so-called straw to draw drinking water from Lake Mead. Without that straw, Las Vegas could be cut off from its water supply within a few years.
When local governments appear before the legislature, they routinely plead poverty, just in case the state might want to come after some of their money. The presentation by SNWA Chief Pat Mulroy went way beyond run-of-the-mill, woe-is-me stuff.
Mulroy says there's a chance Las Vegas could be cut off from water and she isn't sure we will have the money to fix the problem.
"If the drought continues another two years, we lose our second intake. At this point, Southern Nevada loses 90-percent of its water supply," she said.
If Mulroy wanted to get the attention of state lawmakers, that statement should have done it. After nine years of drought, Lake Mead is at a perilously low level. Once it falls below 1,000 feet, the two intake pipes that deliver water to Las Vegas would be worthless, she says, leaving valley residents high and dry.
In preparation for this, SNWA has been building a third intake -- a $1 billion straw that would extend much deeper into the lake. But that vital project is in trouble as well.
"Our financial situation building this intake couldn't be more precarious," she said.
Mulroy outlined why SNWA has no money to spare. In a nutshell, all of its revenue sources have taken a nosedive over the past year.
Water conservation and the foreclosure crisis have cut the amount paid by water customers. Sales of public land, which generated tens of millions for capital projects, have all but ended. Sales tax revenues have dropped as well.
The biggest decline has been in the connection charges paid by developers to hook up new housing projects to the public water supply, "The connection charges dropped from a high of $188 million down to $18 million."
And last month, she said, it was even worse. SNWA was in the red on connection fees as the agency paid $2 million in rebates to developers who cancelled their projects.
Mulroy admits the SNWA still has $480 million in the bank, but told lawmakers that money must stay where it is so she can borrow on it in order to finish the third straw.
Legislators asked no questions about SNWA finances, but critics say they should have. Earlier this week, SNWA said they are moving full speed ahead with another project -- a massive pipeline to tap groundwater in rural Nevada. That project will cost in excess of $3.5 billion -- maybe $10 billion according to some predictions.
The Progressive Leadership Alliance of Nevada, a longtime critic of the so-called water grab, alleges that SNWA has been on a wild, multi-year spending spree.
Spokesman Launce Rake notes that SNWA has spent around $100 million buying up ranches owned by potential opponents of the water grab, at greatly inflated prices.
Rake says, "They've spent more uncounted millions paying dozens of high priced lobbyists and P.R. flacks all over the west. They've spent 250 million and counting on the disastrous Springs Preserve museum. Now Mulroy says we're not using enough water and therefore the agency is broke? That's ridiculous."
Late last year, the I-Team documented millions of dollars being spent by SNWA, without much oversight, on P.R. and consultants, including highly paid lobbyists whose expensive meals, trips, and bar tabs are all passed along to the public.
Mulroy told lawmakers she is instituting cost cutting measures but that the third straw remains her highest priority, "The world as we know it in the Colorado River will be drastically altered."
An SNWA spokesman late Wednesday sent a correction to what Pat Mulroy told lawmakers, saying it will take six years, rather than two years, for the continued drought to render the second straw useless.
Either way, SNWA says the third straw is its highest priority.