Tuesday, September 24, 2013

Don't Be Fooled by the Watergrab Sticker Price

For years, Southern Nevada Water Authority (SNWA) has been telling you that the Watergrab will “only” cost $3,500,000,000. But, when legally bound to tell the truth; SNWA (in writing) told the Nevada State Engineer $15,000,000,000. And even then, SNWA left out cost overruns and the huge cost of energy to pump water across the State of Nevada!

This is what as known as creative accounting. Think of it like buying a car. The true cost of the car is much higher than the sticker price. $3,500,000,000 is the sticker price. $7,500,000,000 is the is the price with all the added features. $15,000,000,000 is the price with finance costs. $20,000,000,000 is the price with cost overruns (typically SNWA projects have had 30% cost overruns). And then, of course; there are still maintenance and fuel costs.

What does this mean to you?

The math is simple: 20 billion dollars spread out over 2 million people (the population of Southern Nevada SNWA customers) equals $10,000 for every man, woman, and child – before we talk about maintenance and operation costs.

For a family of 4 that means $40,000 – spread out in payments over approximately 40 years – about $1,000 a year – or almost $100 a month. Add the electric bill for pumping the water up to 300 miles, and a family of four will probably pay over $100 a month more for the Watergrab for the rest of the adults' lives.

But wait... you already have plenty of water... Just check your tap. Last year the Bureau of Reclamation posted that Nevada only used 237 thousand acre feet of Colorado River water (net). Nevada's allotment is 300 thousand acre feet. Which means, at Southern Nevada's present population, there is plenty of water – even if there were imposed restrictions.

Which means: the Watergrab is for growth.
Now you may still believe in the exponential growth Ponzi scheme, but are you willing to pay $100 dollars a month for water for other people?

And what if Southern Nevada ceases to grow? We saw what happened to Las Vegas when the financial crisis hit. We know that present banking regulations aren't enough to avoid another banking crisis. We know that the price of gas will continue to rise (because deeper water drilling, dirtier tar sands, and more difficult fracking are just getting more expensive). There is a real risk that Las Vegas could grow for a while and then contract – which would leave Southern Nevada residents with a huge bill for a boondoggle.

So, what's Southern Nevada to do? Save Central Nevada's water for when you really need it. Until then, get developers etc. to foot the bill themselves for desalination facilities off the coast of California in exchange for a bigger allotment of the Colorado River.

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