Lake Rates

Introduction
This webpage contains information concerning proposed changes to monthly water rates and future financing of capital projects for water customers in the Cave Rock / Uppaway, Skyland, and Zephyr Water Utility District. Douglas County hosted public workshops on January 27 and February 3, 2014 from 5:30 - 7:30 p.m. at the Tahoe Transportation Center, 169 Highway 50, Stateline, Nevada to engage our water customers in discussing new water rates for operation and maintenance, as well as separate funding options for future capital needs in the water systems.

Douglas County has been working with a group of residents who are served by these water systems to determine the most appropriate solutions to funding our water system needs. New monthly water rates will become effective July 1, 2014, after formal adoption by the Douglas County Board of Commissioners. Based on recommendations from residents, the new monthly rates will cover the costs for operation, maintenance and existing debt on the systems, but the new rates are not sufficient to cover the significant cost of future capital projects for the aging water systems.

Background
Douglas County took ownership of the Cave Rock / Uppaway, Skyland, and Zephyr Water Utility District Water Systems approximately 23 years ago. Over the past 23 years, nearly $18 million, including over $9 million from outside sources, has been invested in infrastructure improvements to correct system deficiencies. There continue to be challenges in the cost to maintain the systems.

The following are the 3 main challenges:

Infrastructure Needs
While the county has made progress in correcting system deficiencies, the water systems were constructed over 50 years ago and still require significant upgrades and improvements to replace aging and failing infrastructure. The water systems also need to be brought into compliance with State Public Water Laws and local fire agency codes and regulations.

Leak Repairs

Leak repairs are extensive, costing approximately $100,000 per year. This is primarily due to the age of the infrastructure and other factors including the use of substandard materials and improper construction methods at the time the water systems were initially constructed. It is anticipated that these costs will continue to escalate as the water systems ages.

Public Safety & Fire Flow Requirements
The average age of the water system is 58 to 60 years old. The failing infrastructure deficiencies will need to be addressed in order to meet Nevada Administrative Code, National Electric Code, OSHA, and the Fire Code. This will help to ensure public safety.

The total unfunded cost for future capital projects is approximately $14 million. As stated above, Douglas County has been working with a group of residents who are served by these water systems to evaluate potential funding options. The county is working diligently to identify all available state and federal resources to assist with future capital funding needs, but must also determine the most appropriate financing mechanism for residents if outside funding is not available.

Two Financing Options
GO Revenue Bonds
GO Revenue Bonds are municipal bonds issued to finance the construction of public infrastructure that are secured by revenues generated by the project, and backed by the full faith and credit of the issuing jurisdiction, Douglas County.

Special Assessment Districts

A Special Assessment District is a taxing district that can assess annual installments against real estate parcels for the construction of public infrastructure.

Recommended Option

Both GO Revenue Bonds and Special Assessment Districts are complex financing mechanisms, and come with pros and cons. The county believes that the best financing option for future capital projects is the GO Revenue Bond since it provides the lowest cost financing, quicker completion time, lowest cost for ongoing administration, and level overall annual payments. These options will be explained in detail during our public workshops. You can also request information and provide feedback by emailing us here or calling us at 775-782-9821.