Virgin Valley Water District began its fiscal year 2019 budget process at a special meeting March 6. The review was a first pass at putting together a robust budget of nearly $12 million that will guide district operations for 12 months beginning July 1.
District finance manager Wes Smith opened discussion of district revenues forecasts with the encouraging news that the district had surpassed his projections of revenue in the current year, so he has raised his operating revenue projections for FY2019 to $9 million. He attributes the bump to more new construction permits and hookups as well as water user rate increases previously voted by the board.
He noted that renegotiation of district bond interest rates will yield a 70 cent reduction for each water user on their monthly debt service surcharge. He also noted that on March 1 the district paid off a 2008 bond. Other current VVWD debt will not be completely retired until 2033.
Water revenues do not completely pay for next year’s planned expenditures, however. Cash on hand from several district accounts will be used to balance the budget. Approximately $6.2 million held in money market, settlement account, capital replacement reserves, and SDC reserves will supplement operating revenues and non-operating revenue sources such as intergovernmental revenues and lease revenues.
General manager Kevin Brown presented an overview of items he sees as major decisions for the coming year. He led discussions on two major issues related to district staffing and salaries as well as a list of major capital outlay projects that account for the bulk of district spending.
Brown recommended a 5 percent across-the-board pay increase for all staff. His own salary would be included in that increase because the board had delayed discussion of his future pay during his performance review in December 2017. He justified the proposed increase as a move to bring VVWD salaries in line with other public and private employers and retain VVWD’s experienced personnel.
Staff had gone a number of years without pay increases during the recession before being awarded a 5 percent pay increase last year. In voting 5-0 in favor of adding another five percent increase, the board chose to spend the money, while making clear that their action should not construed as a “traditional” annual pay increase.
At the board’s request, Brown compiled a job description for an engineer position that he presented to the board for possible inclusion in the upcoming budget. The person hired for that position would take on a number of responsibilities and costs currently contracted to outside engineering firms. Brown suggested a starting salary of $75,000. Board member Travis Anderson, himself an engineer, advocated for seeking a certified civil engineer with several years of experience including advanced engineering software operation. The board concurred and voted unanimously 5-0 to allow an opening to be advertised in May for a job start in July.
The question of hiring part time workers in the coming year arose, with director Rich Bowler advocating for hiring young people in an apprentice capacity to build work skills that lead to good jobs. Brown responded that an apprentice-type approach to covering entry-level and semi-skilled work will be under consideration.
The board looked at projected costs for capital outlay in FY2019 that will include drilling a new well, $2 million; building the northwest water tank and transmissions lines to serve expanded user population, $3 million; completion of water transmission lines, $850,000; well outfitting and building an arsenic treatment plant for well 1A, totaling $1.7 million; outfitting well 27A, $950,000, and other well rehabilitation and transmission line work.
Treatment supervisor Phil Abbott walked the board through needed system improvements, including $50,00 for meters and vaults that will help track leaks and water loss. Both solar and electric power sources will be considered for tracking equipment.
In addition to water system construction, the proposed budget includes a $455,000 line item to purchase a VAC truck that will be used to excavate dirt and water during pipeline repairs. Brown urged the purchase as both a maintenance timesaver and a safety measure for workers. This would be a new piece of equipment for the district. Board members urged comparing cost of purchasing a new or used vehicle before purchase decision is made for the VAC truck and two replacement pickups budgeted at $80,000.
The board agreed with Brown and staff concerning the acquisition of computer equipment, and $50,000 in software and operating platform to improve district levels of security and performance.
Brown inserted a proposed line item to pay for engineering the future expansion and rehab of the VVWD headquarters building. With the hiring of an engineer and need for larger conference and office space, the district is outgrowing its 25-year old building. The bulk of expenditure for that proposed expansion would fall in FY2020 and FY2021.
The next FY2019 budget meeting will be held April 3, with the final budget due to the State by May 31.