Mulroy calls new Lake Mead intake system is critical

Southern Nevada Water Authority chief Pat Mulroy said the economic downturn is having a "stunning impact" on her agency, but there is one very expensive project that cannot afford a delay.

Mulroy said the authority is in a race against time to complete a new intake system to draw water from deep in Lake Mead.

Roughly 90 percent of the valley's drinking water is drawn from the lake through the two existing intakes, but the reservoir's surface could shrink below the level of one of those pipes by 2013.

"So continuing and finishing this third intake is of critical importance to the community."

Mulroy's comments came Thursday as water authority board members signed off on a $674.7 million spending plan for the fiscal year that starts July 1. That's $21 million less than the current $695.6 million budget approved last May.

The new budget includes $267.5 million for major construction projects, $170 million of which is for the third intake.

Later in Thursday's meeting, the board awarded a $42.3 million contract to Henderson-based KW Pipeline for a portion of the project.

So far, workers at the site on a peninsula on the southwestern shore of the lake have excavated a vertical shaft 300 feet into the ground. From there, they will dig a concrete-lined tunnel 20 feet in diameter and almost three miles long underneath the bed of the reservoir.

The latest cost estimate for the entire project is $817 million. The largest share of that money is expected to come from sales tax revenue and connection charges collected by the authority as new homes and businesses hook up to the valley's water system.

Connection charge revenue in particular has all but dried up as a result of the collapse in the local housing market. In 2006, the authority collected $188.5 million in connection charges. That figure is expected to fall to $24.5 million during the coming fiscal year.

The authority, which serves as the valley's wholesale water supplier, plans to spend more on debt service ($178.1 million) than it does on delivering treated drinking water to its member utilities ($116.5 million).

Almost $94 million has already been slashed from the current budget. In the coming year, the authority will cut another $9 million in operational costs and $13.3 million from efforts to clean up and improve the Las Vegas Wash.

About $261.5 million in construction projects will be deferred, including system expansions that won't be needed until the population begins to rise again significantly.

On the payroll side, the authority will maintain its current number of vacant positions and issue no cost of living raises. The agency also plans to eliminate contract workers and interns and institute a voluntary furlough program that will enable employees to take unpaid time off.

Contact reporter Henry Brean at hbrean@reviewjournal.com or 702-383-0350.