By VERNON ROBISON
The Progress
The Virgin Valley Water District Board delved deeply into a complex preliminary budget document during a meeting held Tuesday morning, March 5.
The board spent nearly three hours going through every line item of the district’s proposed budget for fiscal year 2025, which begins on July 1.
This was the beginning of a series of budget reviews that will culminate in the approval of a final budget in May.
The board took some formal actions in the course of the meeting to give direction to staff on how to move forward with certain items in finalizing the budget.
VVWD General Manager Kevin Brown began the presentation by reviewing some of the fiscal year 2024 accomplishments and highlights.
These included a master plan update, modifications to the district’s rate and fee structure, the completion of the 2 million-gallon Scenic Storage Tank and a host of other smaller capital projects and system improvements.
Brown then gave a brief summary of the budget numbers being looked at for 2025.
These preliminary numbers assumed a slight increase in revenues for water sales due to a recent rate increase as well as measured growth expected.
Also built into the budget was the assumption of a slight decrease in other fees and charges due to a slower growth rate compared to fiscal year 2024, anticipation of continued success in water conservation efforts and a reduction in lease rates for irrigation shares.
With all of that being considered, the 2025 budgeted operating revenue was projected at about $11 million, up around $400,000 from fiscal year 2024’s budgeted revenue, Brown said.
VVWD Chief Financial Officer Wes Smith then launched into the details of the 2025 tentative budget.
Smith explained that total revenues, which include both operating (water sales) and non-operating (all other sources) revenues, are expected to total $20.6 million in fiscal year 2025. Meanwhile total operating expenses are projected at $33 million.
“If everything happens the way we are expecting we will spend $12 million more than we bring in,” Smith said.
But Smith emphasized that $20 million of the expenditures are capital improvement projects for which the district has long been saving.
“We can do all of this because, over the last few years, we have set aside $28 million in cash reserve to cover those capital projects that are needed,” Smith said. “So this is all anticipated. We set aside that money with the understanding that we have these projects coming in.”
Even if all of the capital improvements expected were completed and paid for in 2025, there would still be $15 million left in the district’s cash reserves, Smith said.
As Smith continued through each line item of the budget, there were a couple of points where board action was needed to determine how certain items would be updated.
One of these was in the determination of the 2025 lease cost for shares of Mesquite Irrigation Company (MIC) and Bunkerville Irrigation Company (BIC) water owned by VVWD. Smith explained that any updates to these lease rates would not impact lease agreements that are already in place. The new lease rates would also be effective on October 1 of this year, which is the beginning of the irrigation water year, Smith added.
VVWD hydrologist Aaron Bunker explained that the lease rates have traditionally increased by around 3 percent each year. Doing that, lease rates on a MIC share would increase to $1,293.37 per year. BIC shares would go up to $1573.33.
Board chair Ben Davis made a motion to adopt this change and the board approved the motion with a unanimous vote.
Another board action took place when Smith came to the category of staff salaries. Smith explained that the board had approved an item last year that established a 2.5 percent cost of living increase for salaries. But he pointed out that the consumer price index in the western region had escalated by 3.6 percent.
Smith said that the preliminary budget before the board only showed the 2.5 percent increase as per previous board action.
Board members reflected on an action taken last year to bring salaries in line with inflation after many years of little or no COLA increases being made. This had led to a 15 percent salary increase across the board last year.
“We don’t want to get in a situation where we have to do catch up again,” said Davis. “We can’t fall behind like that again. It isn’t fair to employees and it isn’t fair to anybody. I think we at least need to go to Consumer Price Index (CPI).”
Board member Randy Laub made a motion to increase salaries by 3.62 percent across the board in keeping with the CPI. The motion was approved with a unanimous vote.
