Letter To The Editor

RE: WATER DISTRICT BILLING FORMULAS

(November 28^th, 2009)

Proposed Water District Billing Formulas

In July of this year, Bronson Mack of the Las Vegas Valley Water District/Big Bend Water District made a comprehensive presentation of the Water District’s $12 MILLION capital improvement requirements for the Township of Laughlin.

The presentation included a billing scenario which was ill received by both the members of the Laughlin Economic Development Corporation and the residents.  Bronson, both in that meeting, and in subsequent meetings and conversations, has encouraged all individuals and entities to submit their suggestions for billing scenarios.  The issue is really one of fairness - who should pay the bulk of expansion; current users or new developments; residential or non-residential.  There needs to be a formula that is fair among all parties.

Understanding How Capital Infrastructure Works

I made the following presentation to the Water District for consideration, analysis and financial impact study.  It was also furnished to the Chairman of the LTAB.

 “Over the past several years, I built an Asia Pacific (APAC) operation currently consisting of 17,000 employees, in ten cites, in six countries, servicing 35 separate companies within a Fortune 300 Company.  The biggest challenge was to put in place a totally redundant IT infrastructure with no single point of failure, which can handle the movement of data and information in a 'real time' mode.  One of the political challenges was that each company had a very opinionated position as to the formula to allocate the costs based upon the uniqueness of each company and their particular point of view.

We had to come up with a rationale of cost allocation that was simple, practical and made common sense.  What we did was analyze the cost increments and place them in three categories:

1. The cost of the 'backbone' - the infrastructure and its maintenance which was for the benefit of all users to ensure non-interrupted service.
2. Unique capital and operational expenditures that were unique to a specific company, or development, over and above the others.
3. Bandwidth usage which was unique to each company.

Putting This Concept to Work In Laughlin

I see the IT challenge akin to what we are facing with the Big Bend Water District capital improvement requirements and funding formula.  A formula is never going to satisfy everyone, but it should embrace a rationale that makes sense and is hard to challenge upon fairness.

1. What are the costs associated with maintaining a redundant water delivery system for the Laughlin Community (water storage, pumping stations, pipeline replacement, and water treatment improvements)? What is allocated and charged across all metered users?
2. What are the direct costs associated with expanding the delivery system to new residential and commercial parcels (new delivery lines, equipment)? What costs are charged to the developer?
3. What are the variable costs, per meter, pertaining to usage?  What costs are charged to the metered user?

As was pointed out by several individuals, the burden placed solely upon the developer will inhibit future growth if those costs are out of line with other regional (California, Arizona and Nevada) venues.

I encourage all individuals to participate in this process.

Pete Gorrie
(Editors Note: Mr. Gorrie is a seasonal resident of Laughlin, and a member and former President of the Laughlin Economic Development Corporation. A veteran of the United States Marine Corps, he has extensive international industrial experience as a senior corporate executive and chief operating officer.)