Admitting part of their decision was rooted in "political realities," the Board of Supervisors on Thursday delayed action on the request by Carson City's Utilities Department to raise sewer and water rates July 1.
Utilities Manager Tom Hoffert told the board the rates are needed to cover anticipated operating and capital construction and repair costs. Under the proposal, sewer rates would increase 9 percent - about $1.40 a month.
Water rates would go up 5 percent worth about 85 cents a month for the average residential customer.
Hoffert said commercial customers would see larger increases in both areas. He said, however, some of them with private fire hydrants and fire sprinklers got a substantial break this past July when special fees for those services were eliminated.
Consultant John Bono of Public Financial Management told the board it badly needs to replenish reserves, which are all but gone, and to cover costs of major capital projects needed in 2005 and 2006 - a total of $20.4 million worth of repairs and construction for those two years including work on the leaky Brunswick Canyon reclaimed water reservoir. He said all reserves were depleted by not increasing water and sewer rates for about a decade before last year's hikes.
With no reserves and mounting construction and repair needs, Bono said, "the city does not have a very flexible position right now."
"This is an opportunity to test our resolve and stick with a course of action we decided on last year," said Supervisor Robin Williamson. "To do what is fiscally prudent rather than defer minor adjustments and then have to raise it all at once."
But she was pretty much alone on the panel.
Mayor Ray Masayko questioned whether utility managers had proven they need the added money and admitted there was a political issue to consider.
"If we adopt rate increases today, there's going to be a hell of an uproar," said Masayko.
Supervisor Pete Livermore agreed saying that is "political reality" and Supervisor Shelly Aldean suggested the board wait until the utility budgets and needs are presented to act on proposed rate hikes.
"Maybe we need to look where we're going to do and what we're going to spend first," she said.
Bono said the only way to change his recommendation would be to change the assumptions of what capital needs are.
Assemblyman Ron Knecht, R-Carson City, who chaired the advisory committee which helped develop the rate model, urged them to wait until they have more data and a good look at the department's repair, construction and operational needs for the coming fiscal year.
He said at that point, the facts might show little or no increase needed or that the utility should increase rates as proposed - but that at least the city would be working from facts.
City Manager Linda Ritter told the board the capital plan and budget will lay out the immediate and long-term needs of the utility department in detail.
The board decided to hold off on any increase until the utility department budgets are presented in detail. The city's budget must be finalized and sent to the Nevada Department of Taxation by May 15.
Contact Geoff Dornan at nevadaappeal@sbcglobal.net or 687-8750.
