Legislative panel OKs $35M bond for TRIC pipeline
The legislative Interim Finance Committee on Wednesday approved $35 million in state backed bonds to construct a pipeline that will supply water to the Tahoe Reno Industrial Center.
The bonds will be paid back by assessments on those companies including Tesla, Switch and Google over the next 25 years. Going through the state gets the bonds a much better interest rate than Storey County would be able to get.
Paul Anderson, director of the Governor’s Office of Economic Development, said the project will not only provide TRIC the water major corporations including Tesla, Google and Switch need but clean up the water in the Truckee River by pulling 4,000 acre feet of nitrogen laden effluent out of the Reno/Sparks water treatment facility each year.
Sen. Ben Kieckhefer, R-Reno, said that will clean the Truckee’s waters enough to postpone the need to build a new treatment plant up to 20 years, a project that would cost about $50 million and hit Reno and Sparks residents with significantly higher water bills. He said the problem isn’t the lack of water, “it’s what gets put back in the river.”
Consultant Jeremy Aguero told lawmakers the $35 million in bond money is just part of a project that could eventually total $157 million. The bonds will pay to construct 13 miles of pipeline to move the effluent from the sewer plant in Sparks to a reservoir on TRIC property. From there, the water will be processed by different user corporations to whatever level of purity their specific needs require.
Aguero said the state is only backing the bonds for that pipeline, that all the rest of the infrastructure including up to $37 million in onsite improvements and up to $85 million in advanced water treatments will come from those corporations.
Assemblywoman Robin Titus, R-Wellington, questioned whether those companies will actually make those improvements, “so we’re not building a pipeline to nowhere.”
Aguero said those companies are “ready, willing and able to construct these improvements.”
A major issue raised was over the removal of 4,000 acre-feet of water from the downstream flow of the Truckee River. Lawmakers were told that will be made up by 1,500 acre feet of water rights already owned by TRIC and 2,500 acre feet of water owned by the Nevada Department of Transportation.
Assemblywoman Maggie Carlton, D-Las Vegas, asked if the NDOT water would still belong to the state and consultant Pat Mulroy told her, “absolutely.” She said those waters “have to stay in the river for the benefit of everybody including the (Pyramid Paiute) tribe.”
She said the Truckee waters are managed by a federal water master who will make sure the interests of all users including the tribe are protected.
Several members asked how well the state was protected from having to pick up the cost of the bonds. Marty Johnson, the financial consultant, said assessments through the Special Assessment District created to manage the water system would collect the money from those half-dozen corporations every six months and, if they don’t pay, their property would be foreclosed on. If the assessments fall short, he said a Tax Increment Area created for the project would collect property, modified business and sales tax revenues over and above the base amounts now going to state and local entities to cover the bond payments. If those fell short, he said the tab would fall on Storey County’s General Fund.
Only if that too failed to cover costs would the state General Fund be on the hook, which he said is highly unlikely.
“Shifting the risk from the state to the private entities, I think, that’s a key component,” said Anderson, also assuring lawmakers the state was safe.
The vote to create the Special Assessment District was unanimous but several members of IFC objected to the creation of the Tax Increment Area that would divert some public tax funding to the project.
Assemblywoman Teresa Benitez Thompson questioned the need for economic development projects like this pointing out the economy, especially in the north, has improved dramatically over the past few years.
The unanimous approvals Wednesday came despite state leaders promising to tighten up requirements for Nevada’s tax abatements and incentives for future companies.