The Las Vegas Valley’s wholesale water supplier and its largest water utility expect to outspend their revenue by tens of millions of dollars in the coming year, but the man in charge of both agencies insists there is nothing to worry about.
What looks like red ink is actually bond money being spent down to pay for expensive infrastructure projects, said John Entsminger, general manager for the Southern Nevada Water Authority and the Las Vegas Valley Water District.
Authority board members unanimously approved a new $619.8 million budget with a $75.5 million deficit on Thursday. Clark County Commissioners unanimously approved the district’s $532.1 million budget and a $100 million deficit on Monday.
The two votes came without any discussion by the board or comments from the public.
Entsminger said the deficits exist on paper only. Both agencies are in the midst of bond-funded construction work, including a $650 million low-lake-level pumping station at Lake Mead that the authority expects to complete next year.
“We’re showing more going out than we have coming in … but that’s all according to our long-term capital plan,” Entsminger told the authority board before Thursday’s vote.
The authority sold $520 million in construction bonds in 2015 to help pay for projects including the pumping station, which will allow the community to continue draw water from Lake Mead even if the surface of the reservoir drops another 200 feet.
The district’s last big bond sale came in June, when the utility sold $100 million in construction bonds to start funding a 10-year, $616 million capital improvement plan adopted in 2017.
Construction projects will make up $140.1 million of the authority’s spending and $133.4 million of the district’s spending for the fiscal year starting July 1. That represents a quarter of the district’s total budget and includes $19.2 million to replace water pipelines beneath Las Vegas Boulevard, $15.8 million to swap out other water mains and service lines, and $11 million for a new reservoir and pumping station in the northwest valley.
The district’s new budget is 11 percent larger than the current one, mostly because of the utility’s plans to increase construction spending by 29 percent.
The authority plans to decrease its overall spending by about 6 percent in the coming year, thanks is large part to a 27 percent drop in construction spending as the Lake Mead pumping station nears completion.
“We’re getting pretty close to being done,” Entsminger said.