Starting next week, water rates for Truckee Meadows Water Authority customers are going up.
Last week the water purveyor's board of directors voted to increase rates to generate $11 million in additional revenue next year.
Rates are scheduled to jump over the next three years to raise a total of $22.5 million by 2006.
But the board also voted to require TMWA staff to return in a year to seek its approval for the next planned increase.
In the meantime, the board will assemble a review panel to study the rates and the way they are distributed among TMWA's many types of customers.
The creation of a review panel was in response to criticism that TMWA is significantly changing its rate structure under the new fee system.
"This is a very different methodology than that used by the PUC," acknowledged TMWA General Manager Lori Williams, referring to the Public Utilities Commission, which oversaw water rates when the system was managed by Sierra Pacific.
"But no one ever believed the PUCs setting of rates represented the cost of service."
Under the new structure, flat-rate customers will be seeing a bigger bump up in rates than metered customers.
"In the past, metered customers have subsidized those flat rate customers," said Williams.
Metered customers include commercial users, farmers, wholesale buyers such as Washoe County Department of Water Resources, multi-tenant dwellings and, increasingly, residential users as TMWA works to convert area homes from flat rate to meters.
During a lengthy public comment period, several flat rate residential customers complained that they were being penalized by the new structure, in which they'll see an average rate increase of about 40 percent in the first year.
But that doesn't mean all metered customers were pleased with the new structure either.
Bruce McKay, director of administration at the El Dorado Casino, said the new fees are not uniform even across similar types of customers.
"I know we need a rate increase but there seems to be some inequities," he said.
"There will be a 21 percent increase at the El Dorado while there will be a 35 percent increase at the Silver Legacy." That's because the rate increases are based on several factors.
Each type of customer metered commercial, flatrate multi-tenant, etc.
has at least half a dozen subcategories in which fees are increasing at varying rates.
The fee structure is, in fact, a complex matrix of about 70 different rates.
"I'm an old accountant and I've had trouble deciphering these rates," said McKay.
"I think it needs more study and a look at alternatives and I ask the board to defer the decision."
That was the request, too, from the Reno-Sparks Chamber of Commerce, which asked the board a number of questions about the process and then asked for an independent review of the rate structure.
The Chamber two weeks ago informed its 1,700 members of the upcoming vote on a rate increase, but TMWA's Williams said that no commercial customers responded and that only one commercial customer had attended any of the public meetings TMWA held on the issue.
Despite several pleas to delay the vote, the board took action, primarily because of TMWA's precarious finances.
"We need the rate increase to put our financial house in order," said Williams.
"There is a possibility of doing some refinancing in this market.
And any delay will eliminate $1 million a month in revenue."
TMWA plans to use the $22.5 million it hopes to raise over the next three years as follows: $6.5 million for payments on its debt principal; $8 million to make up for over projected revenue; $2 million for main replacement; and $6 million to reduce arsenic levels to meet federal rules.
