The JPA would create an entity similar to the Truckee Meadows Water Authority for the flood project. This entity would then be able to issue general obligation bonds and approve rate increases for area residents.
“I personally favor the JPA,” Flood Project Coordinating Committee chair, Bob Larkin, said. “First of all we have tremendous experience in the community with the JPA (with TMWA). Also, I don’t think that we want to move forward with the largest public works project in the community with a model that we are not familiar with.”
The other option that was on the table was to create a regional flood control district, which would be its own entity and would assume liability for the project. Under the endorsed JPA, the individual cities could take the fall if something were to go awry.
“The advantages for a district are the (decreased individual) liability, legal challenges and the fact that it is a separate entity,” said Greg Salter, Washoe County Deputy District Attorney and legal counsel on the project. “If you use a JPA it is like a partnership… you remain individually liable.”
However, Salter said that one entity being left alone to pay the bills on outstanding bond debt or other entity obligations is a possibility but not a probability.
“(That is) because of the way people put one of these together,” Salter said. “What the participants do is protect themselves by contract.”
This contract would contain an exit clause that would mitigate that possibility.
“The joint power is going to be responsible for issuing up to $400 million in bonds and operating and maintaining an almost $2 billion flood management system,” Salter said, adding that entities should be attentive when the price tag is that high.
In order to make the change to a JPA, the FPCC will have to submit a Bill Draft Request(BDR) to the Legislature. According to flood project director, Naomi Duerr, the language for the BDR is already being established and will appear for the first time at the projects meeting this Friday.
Following the committee’s comments, the BDR will make its way to Carson City on Monday in the hands of Duerr and be presented to the Legislature.
The flood project committee will be asking the Legislature to change Nevada Revised Statute to allow a JPA as a governing body to issue general obligation bonds. Current law only allows such entities to issue revenue backed bonds.
The Legislature will also be asked to expand the definition of a flood control project, matching the legislative language more specifically to what the Flood Control Project Committee wants to do.
However, the JPA governance model does currently allow for flexibility in levying new rates, tolls and charges on area residents. The alternative option to form a flood control district would not have allowed those fees under current law.
The fees are needed to fund northern Nevada’s share of the Truckee River Flood Control Project. Local jurisdictions are responsible for 35 percent of the almost $1.6 billion project. The federal government through the Army Corps of Engineers would pay for the remaining amount.
The flood project is currently being funded by a 1/8-cent sales tax across Washoe County. In addition, residents of the City of Sparks are paying an extra $5.41 on their sewer bills to fund the project.
“It is our impression that if Sparks is comfortable with what they are paying that the rest of the community would accept those rates as well, Duerr told the joint powers. “And that would cover our share.”
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