Marlette water system may avoid revenue shortfall

Lawmakers were told Tuesday the heavy snowpack on the east slope of the Sierra should save the Marlette Lake Water System from a severe revenue shortfall this coming year.

But the joint Senate Finance, Assembly Ways and Means subcommittee was told it needs to review the system’s operations to ensure the water system remains solvent.

The discussion came as the Legislature faced its second major deadline this session. Tuesday was the final day for passage of non-exempt legislation from the house where it originated. To meet that deadline all afternoon committee meetings were canceled and only the money committees and Assembly government affairs met during the morning.

The subcommittee was told Marlette operates by selling water to Carson City and Storey County but Carson City isn’t currently buying water from Marlette. Because of that, the system’s water sales fell more than $100,000 from actual sales of $325,485 in FY 2018. The governor’s recommended budget projects just $150,000 in raw water sales each year of the coming budget cycle.

As a result, the governor’s recommended budget contains $279,231 over the biennium in General Fund cash to make up the projected shortfall.

But staff advised with the large snowpack on the east slope of the Sierra, Carson is again interested in purchasing raw water. The new projections say water sales should increase from $150,000 a year to $325,460 in fiscal 2020 and $246,051 in FY 2021. If those sales happen, that General Fund appropriation will likely not be necessary to keep the system solvent.

But in order to hedge its bets a bit, the subcommittee agreed to put $100 in General Fund cash each year into the Marlette budget. Legally, that gives the water system managers access to the Interim Finance Committee contingency fund in case those sales don’t materialize.

The system’s operating budget is recommended at just more than $1 million each year of the biennium.

In addition to that, the Capital Improvement Projects budget contains $13.78 million to finance rehabilitation of the Marlette Lake Dam and other improvements to the system.

Marlette was purchased by the state in 1963. It provides some of Carson City’s water and all of Virginia City’s water.