The Virgin Valley Water District (VVWD) is nearing completion of a budget for fiscal year 2016-2017 that includes several major projects that were at times controversial amongst the board members.
At the April 7 special budget meeting, the board reviewed budget recommendations for the final budget hearing on May 17.
The board unanimously has included construction of a second line across the Virgin River, a new tank and line to the Sun City area and water system pressure improvements for both the Bella Horizon subdivision and Sun City. The second line across the Virgin River was controversial and a vote to fund the project failed three times before passing in March, when directors Sandra Ramaker and Bubba Smith changed their vote to support the line.
Also included are major maintenance projects such as the repair of the Airport water tank and spending over $1,000,000 on replacing pipes.
Total expenditures for the new fiscal year in the tentative budget would be $17,621,846 an increase of over $1,106,567 over the 2015-2016 budget. The proposed budget would require the district to use monies in various savings and designated funding accounts to balance the budget.
District manager Kevin Brown showed the board a long-range plan for bringing the district into the “black” so that the use of cash reserves would be eliminated by 2019. With the proposed budget, the district will still have over $7,000,000 in cash reserves. According to Brown, several factors will allow the district to stop using reserve funds including the recent rate increase and paying off bonds.
Although not directly part of the budget discussions for this fiscal year, Wolf Creek Golf Club general manager Darren Stanek addressed the board about the club’s concerns over the district raising fees for water shares leased by Wolf Creek. The leased shares expire in 2019, and the board has discussed raising the fees in previous meetings.
“There is confusion that a golf course can just raise rates,” said Stanek. Wolf Creek raised rack rates for the first time since 2007 and according to Stanek “We’ve seen about 800 less rounds.”
The board took no action but assured Stanek that the issue would be fully discussed before the expiration of the water share leases in 2019.
Board accountant Wesley Smith then reviewed the proposed budget section by section for board and public comment.
Kathy Bussman, controller for Wolf Creek Golf Club, asked Smith if the district simply used the last years’ budget and added a percentage or if the budget was based on “actual expenditures.” Smith replied that the budget was “zero based and not simply a percentage increase.” Smith added that the State of Nevada requires budget documents that show a comparison of expenditures between fiscal years and that can give the impression that they are simply using last fiscal year numbers.
Smith also briefed the board on insurance options for the next fiscal year. The district, as does the City of Mesquite, currently insures through Pool Pact which is an insurance program made up of local governments statewide. The district and the city have had issues over claims and both entities have provided notice to Pool Pact that they may not renew for the 2016-2017 fiscal year.
Mesquite resident John Williams suggested that the board prepare “various scenarios” and get in writing “how a claim would be handled by prospective insurers.” Willams said the board should “exercise due diligence” before selecting an insurer.
The board was given a detailed comparison by Mesquite insurance agent Bill Mitchell comparing Pool Pact with Traverlers Insurance. The board was told by Smith they would have to make a decision by their May meeting, and the premium would be added to the budget for the final hearing.
At the request of board member Barbara Ellestad, manager Brown presented a memo that outlined a job description and compared costs for full-time legal counsel used by other local governments. Board Chair Nephi Julien told the public that the reason for the memo was to compare what the district was spending on outside counsel to what other jurisdictions are paying for full-time counsel. “We want to explore the option of moving to an in-house attorney,” said Julien. “This is not a reflection on any of the previous attorneys we have had in the last twenty years, but a discussion if there is a need to have someone focused 100 percent on our issues,” Julien added.
Last year the district spent over $165,000 on legal fees and the proposed budget for next fiscal year is the same. “We need to look and see if for that same amount of money we can have somebody that works just for us,” said Julien.
Board member Bubba Smith noted that “When we went to full-time accounting it made a huge difference.”
Ellestad suggested that the job description also include the attorney having responsibility for human resource work. “I think that is one of the big ones if we change insurance providers and we lose some of the HR support we get from Pool Pact.” Brown said that the current budget had funds for human resource consulting and those monies could be used instead for an attorney position.
The board decided to continue the discussion as part of the insurance issue at their meeting in May, and leave the proposed legal budget at $169,000 until they resolve the insurance carrier.
Ellestad then turned to staff salary increases, “I want to make sure the public understands what we have done on salaries. At the last budget meeting we unanimously voted for a five percent pay raise for all employees except manager Brown.” Brown was given a 7.5 percent increase at a previous meeting. Board member Bubba Smith noted that he was not at the budget meeting for the staff salary increase discussion but he believed “it was a very good decision.”
Manager Brown added that the last salary increase was in 2012.
The proposed budget will be filed with the state on April 15 for review, and a final budget will go to the state no later than May 31.