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January 28, 2014
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Changes pitched for Douglas County water customers in basin

Douglas County officials are rolling out a package of proposed water rate changes for their Cave Rock, Skyland and Zephyr Water Utility District customers in the Lake Tahoe Basin.

For most residential customers, consolidating the three water utilities leads to a lower monthly rate of $96.61 starting July 1. That base rate would increase by about $4 per year over the next four years, topping out at $113.02 per month in 2019 as county general fund subsidies for the water operations are phased out.

That base rate could pay only for operations and maintenance and existing debt service costs, according to a five-year rate study.

Rates would increase significantly if the county moves forward with an estimated $14.2 million in targeted capital improvements. The county proposes to pay for that work with 30-year general obligation or revenue bonds, with the cost split among the systems.

Adding those costs to the mix would mean estimated monthly residential water rates of $252.19 for Cave Rock, $200.53 for Skyland and $114.53 for the Zephyr Water Utility District. Zephyr has the fewest capital needs because of past assessment measures customers approved.

The Douglas County Board of Commissioners has already approved a long-discussed consolidation of the three utilities.

Commissioners will finalize the proposed base water rate over the next two to three months as county staffers continue to fine tune the capital improvements plan, County Manager Steve Mokrohisky said at a public workshop on the rates Monday.

Without the consolidation, residential customers in Cave Rock would see their monthly water rates increase from $202 to $244 in July, Mokrohisky said. Rates would increase from $114 to $123 for Skyland and from $80 to $105 for Zephyr Water Utility District.

Those rates would not include any of the $14.2 million in capital improvements, Mokrohisky said.

Targeted capital improvements include $2.2 million to reconfigure pumping and treatment equipment, a $1 million replacement of the Hidden Woods water tank, a $970,000 backup treatment unit and various computer control upgrades.

They also include replacement of old and undersized water lines: About $4.5 million in Cave Rock, $3.5 million in Skyland and $1.6 million in Zephyr Water Utility District.

Each water system used to be privately owned. They were acquired by Douglas County in the late-1980s and early-1990s as their owners were unable to meet federal drinking water standards taking effect, according to Carl Ruschmeyer, director of public works.

The average age of lines in the utility systems is 50 to 60 years. Leak repair costs have exceeded $80,000 each of the past three years.

“The bottom line is the water systems are aging, failing and in many cases the capital improvement projects we’re looking at are needed to bring them into compliance with codes, specifically for fire flow,” Ruschmeyer said.

County officials stressed at Monday’s workshop they will continue to search for grant funding to help pay for targeted capital improvements. While uncertain, success could lower proposed rate increases.

A full house of people attended Monday’s workshop.

Some people questioned how capital improvement and operating costs would be split among customers of the three utilities. Others questioned the county’s timeline to enact cost saving measures such as electronic billing or to complete other water system work that was bonded for in the past but not done when projects came in over budget.

One person asked why the county decided to not contract with Tahoe Douglas Sewer District to operate the water utilities after a proposal found that could reduce costs by as much as 10 percent. County officials said they are keeping that option open, but confident those savings can be matched or exceeded through staffing and operational changes they are pursuing.

A second workshop on the water rates is scheduled for Monday, Feb. 3. It starts at 5:30 p.m. in the Tahoe Transportation Center at 169 U.S. Highway 50 in Stateline.

Additional information is available online at www.douglascountynv.gov/lakerates.


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Tahoe Daily Tribune Updated Feb 3, 2014 02:39PM Published Jan 31, 2014 09:24AM Copyright 2014 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.