The Southern Nevada Water Authority won’t be slowed by sagging revenue from a slumping local economy.
Authority board members on Thursday approved a $695.6 million spending plan for the coming fiscal year, which starts July 1.
That’s an increase of $30 million from the current budget, and it comes despite a $52 million drop in revenue from new customer hookups that authority officials are predicting over the next year.
“That’s the primary short-term problem. We’re not going to collect anywhere near the revenues,” said Dick Wimmer, deputy general manager for the district.
Fifty-seven percent of the authority’s funds for major construction come from so-called connection charges.
Even so, the authority will plow ahead with $308 million worth of new construction in the coming year, thanks to a reserve fund of connection charge revenue that had been coming in far faster than expected before the recent slowdown in the new home construction.
Wimmer said the authority has roughly $400 million in reserve. The reserve fund eventually is expected to climb to as much as $1 billion, and then gradually decline as the authority borrows money for major construction projects and gradually pays off the loans.
The biggest of those projects is the massive pipeline network the authority plans to build to tap groundwater from as far north as Great Basin National Park in White Pine County. Official estimates for the project range from $2 billion to $3.5 billion, but critics of the plan expect the cost to go much higher.
Most of the construction money the authority plans to spend in the coming year will go to build a third intake that will allow the authority to draw water from deeper in Lake Mead.
The budget for next year also includes money for 26 new staff positions. Nine of those slots are being filled by temporary, and expensive, contract workers, and the authority expects to save $600,000 a year by replacing them with permanent employees.
The water authority employes about 380 full-time staff members and another 40 or so who divide their time between the authority and its largest member agency, the Las Vegas Valley Water District.
Since reaching a high-water mark of 51,300 in 2005, new connections to the local water system fell to 37,485 in 2006 and 22,307 in 2007.
The authority’s current budget, which runs through June 30, assumes $159.7 million in connection charge revenue. That figure is expected to fall to $107.5 million by the end of the next fiscal year in mid-2009.