When a business shuts down, you'd never expect it to be over a water bill. But a new pricing structure by the Southern Nevada Water Authority is causing a little bar in Las Vegas to close its doors.
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"I was just flabbergasted," said Brent Howard, president of Larry's Hideaway in Las Vegas, a small country bar in a residential part of Sin City.
The bar has been around for more than 20 years. The bad economy played a role in its closing, but a recent fee by the local water authority, of more than $400 per month, was the straw that broke the camel's back for this bar in the desert oasis.
"I couldn't believe they would charge such money to a small business like that," said Howard.
According to a recent survey by leading water market industry publication American Water Intelligence, Las Vegas ranked in the top 10 nationwide when it came to water fee increases between the months of July 2010 to July 2011, with a combined water and wastewater fee increase of 12%.
The new charges are based on the size of a building's water meter instead of how much water the building actually uses. According to the Southern Nevada Water Authority Website, a non-residential facility with a water or fire meter size between two-to-six inches, could potentially pay a monthly fee anywhere from $115.45 all the way up to $721.57.
"That was basically just aimed at small businesses like Larry's Hideaway," said Howard. "A little bit towards residents and a little bit towards big business."
Due to Nevada's lack of growth in the past seven years, the water authority has seen a drastic drop in revenue from water connection charges for new buildings throughout the area. The hope is that the water fee increases will make up for it.
"In 2005, we connected $190 million in water (connection) charges," said John Entsminger, a senior deputy general manager for the Southern Nevada Water Authority. "In 2010, we hit a low of $3.5 million."
Another option for the local government was to pass off the water fee increases to residents, but the authority opted to charge larger buildings, such as resorts, retail stores or small businesses like Larry's Hideaway, more money instead.
"If we had loaded the charges on to residential, then the residential customers would've thought that was unfair," said Entsminger.
Howard wholeheartedly disagrees.
"They get a $5 increase (in their water bill) and figure they're paying their fair share. It's not their fair share at all," said Howard.
The water fee increases will be in place for the next three years. Larry's Hideaway, which will officially close its doors on June 30, won't be around to pay for them.