Nevada Irrigation District adopts 2027 budget with reserve draw and trimmed capex
Nevada Irrigation District, California · Meeting date: October 28, 2026 · Published: October 29, 2026
Nevada Irrigation District’s board unanimously approved a 2027 budget that projects $87 million of new revenue and a $16.2 million capital programme. The plan reflects a delayed January rate increase, reduced capital spending and an anticipated draw on operating reserves.
Key points
- The board approved the 2027 annual budget, including a $16.2 million capital programme covering about 54 projects, primarily in water and hydropower.
- New revenue is projected at about $87 million, up $1.4 million, supported by forecast hydropower revenue and a rate increase taking effect on 1 January 2027.
- The district expects to use about $4 million of Fund 10 operating reserves, principally because rate implementation was moved from July 2026 to January 2027.
- Staff said the capital programme was cut significantly and operating expenditure was reduced by about $1.3 million after the board lowered the proposed rate increase and delayed its start.
- The district will retain higher operating liquidity while drawing down its water capital reserve, ahead of planned debt-financing discussions.
Full report
Nevada Irrigation District has approved its 2027 annual budget with a planned $4 million draw on its principal operating reserve, as the utility adjusts to a delayed and reduced rate increase and cuts back its capital programme.
The board unanimously adopted the budget on 28 October. It forecasts about $87 million in new revenue, excluding $47 million of interfund transfers. Revenue is projected to rise by about $1.4 million, driven principally by expected hydropower revenue and the new rate increase that will take effect on 1 January 2027.
The budget includes a $16.2 million capital programme comprising about 54 projects, mainly across water and hydropower. Staff said the capital plan had been reduced significantly from that contemplated in the rate model after two board decisions: moving rate implementation from 1 July to 1 January, and lowering the proposed rate increase. The district also removed about $1.3 million from the operating budget.
The resulting financial plan still projects an operating deficit. Staff said the district expects to use about $4 million of Fund 10 operating reserves, primarily reflecting the six-month delay in rate implementation. A director said the district needed to move toward a more sustainable position, noting that recurring shortfalls must be funded from reserves unless offset through savings.
The utility is also changing how it presents reserves ahead of prospective borrowing. Rather than transferring funds into the water capital account, staff will retain higher liquidity in the operating funds while reducing the Fund 15 water-capital reserve by about $4 million below its stated reserve target. Staff said this approach is intended to demonstrate sufficient operating liquidity during debt-financing underwriting.
Debt options are expected to return to the board around December. Staff said conventional long-term bond issuance was currently estimated at roughly 5%-5.5%, and that the district was also assessing commercial paper and variable-rate bonds. Although the rate model contemplated substantial debt issuance, staff indicated that economic volatility and the long-term yield curve made it prudent to minimise the initial borrowing amount.
The budget also continues funding of pension obligations through Fund 85, which is projected to end the year with about $9.8 million. Those funds are legally restricted to pension purposes.
This summary was generated by AI based on the source document and may contain errors.
Source: Board of Directors Meeting, Nevada Irrigation District