{"id":2519,"date":"2012-01-24T12:52:59","date_gmt":"2012-01-24T17:52:59","guid":{"rendered":"https:\/\/itstheenvironmentstupid.com\/?p=2519"},"modified":"2012-01-24T13:05:09","modified_gmt":"2012-01-24T18:05:09","slug":"las-vegas-water-ponzi-scheme","status":"publish","type":"post","link":"https:\/\/itstheenvironmentstupid.com\/?p=2519","title":{"rendered":"Las Vegas’ Water Ponzi Scheme"},"content":{"rendered":"

by Patrick Coolican, LAS VEGAS SUN, January 23, 2012<\/em><\/p>\n

\"dreamstime_xs_21593309\"<\/a> Breaking news! There is no free lunch!<\/p>\n

OK, this is actually not news to most of you. But that\u2019s the take-away from the Southern Nevada Water Authority\u2019s<\/a> troubled finances and need to raise water rates to pay its significant obligations.<\/a><\/p>\n

In fiscal year 2005-06, the water authority had revenue of $371 million. In fiscal year 2010-11, revenue dropped to $210 million, a loss of 43 percent, or $160 million.<\/p>\n

How did this happen?<\/p>\n

It\u2019s simple: The water authority took in $188 million in regional connection charges \u2014 what everyone paid to hook up to the pipe \u2014 in 2005-06 but just $10.8 million last year.<\/p>\n

That connection revenue has collapsed because growth has stopped.<\/p>\n

Of course, you might say, why were we relying so heavily on such a volatile revenue stream? After all, did we really think the growth would continue forever?<\/p>\n

There are two answers. The first is that, yes, we did believe the growth would continue forever. Although there were voices of reason \u2014 most of them elsewhere \u2014 there was a common, fanciful belief that Southern Nevada would continue its red-hot, recession-proof growth.<\/p>\n

More important, as Patricia Mulroy, general manager of the water authority, told the Sun\u2019s editorial board this week, \u201cGrowth was to pay for growth.\u201d<\/p>\n

The idea was that people who live here shouldn\u2019t have to pay for the immense costs of building water infrastructure for the onset of new residents.<\/p>\n

So, new investors paid for the original investors. Oops. I mean, new residents paid for the original residents. Like a Ponzi scheme.<\/p>\n

This wasn\u2019t just the policy when it came to paying for water infrastructure, however. Much of our community became addicted to growth in this way. Lucrative Bureau of Land Management<\/a> land auctions helped pay for schools, parks and environmental programs. We needed new residents because they helped push up real estate transfer taxes as well as huge sales tax receipts on construction materials.<\/p>\n

Growth would pay for growth. Pure folly.<\/p>\n

If someone else \u2014 some newbie \u2014 was going to pay the enormous capital costs of building a city, what incentive was there to think hard about how to build a real economy? Or whether unfettered sprawl was really the best option?<\/p>\n

Now the bill has come due and there are no new investor\/residents on the horizon to pay it. We all have a little Bernie Madoff and his victims in us. [Read story on original site]<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The desert city, Las Vegas, was funding its lavish water system entirely by charging new arrivals to hook up to it. Now growth is down by 94 per cent and the Water Authority is wringing its hands.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[17,1,353],"tags":[1634,1637,1633,1635],"_links":{"self":[{"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=\/wp\/v2\/posts\/2519"}],"collection":[{"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2519"}],"version-history":[{"count":5,"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=\/wp\/v2\/posts\/2519\/revisions"}],"predecessor-version":[{"id":2528,"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=\/wp\/v2\/posts\/2519\/revisions\/2528"}],"wp:attachment":[{"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itstheenvironmentstupid.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}