Board Approves Water Rate Increase

By: Associated Press
By: Associated Press

Reno-area residents will pay more to turn on their taps under a rate increase approved the Truckee Meadows Water Authority board.

Under the measure approved Wednesday, homeowners who pay a flat rate for water will see their monthly bills increase 37 percent beginning next month.

Rates for those customers will jump from $49.19 to $67.50.

Average monthly bills for customers on water meters will rise about $4.40 cents a month to about $40.

The increases, including all residential and commercial customer classes, will yield about $11.8 million over the next year, about a 21 percent hike in revenue. The water authority has 77,000 customers across the Truckee Meadows.

The board, however, stopped short of implementing a three-year rate plan as originally proposed. The directors decided an independent review of the utility's rate-setting procedures should be conducted before further increases are imposed.

Wednesday's compromise was approved after a four-hour hearing during which consumers complained that Reno, Sparks and Washoe County paid far too much two years ago when buying the system from Sierra Pacific for $350 million.

"The price that you paid for this water company was clearly too much," Reno resident Richard Bolenbaker said. "Now you've got too much debt and you're expecting the ratepayers to finance your acquisition of a private company."

Even with the increase, officials expect a $10.5 million shortfall in 2005. The shortage results from the need to begin debt payments on the $350 million purchase, inaccurate revenue projections made when the deal was put together and necessary improvements to an aging water system, officials said.

Utility officials said they hope the additional revenue will allow the water authority to restructure its debt with lower interest rates, which could reduce the amount of future rate increases.

At least one authority directors agreed with critics about the high purchase price. The $350 million paid was about $100 million more than the book value of the utility at the time.

"It seems like we paid considerably more for this system than what it was worth," said Pete Sferrazza, the Washoe County Commission appointee to the water board.

Other utility officials said it is pointless to attack the purchase now.

"There was a desire by the local governments to control the water resources here and this was a blind, competitive bid," said Jeffrey Tissier, the utility's financial manager.

"The decision was made," Tissier said. "The cards are dealt. Reality is reality."


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