Looking to balance a $22 million budget for 2010, Nevada Irrigation District officials are anticipating a hiring freeze, operational cuts and a water rate hike.

At a Wednesday NID board meeting, directors gave initial approval to Finance Director Marie Owens' plan for $3.4 million in cuts in order to balance the $22 million budget.

An estimated $1 million of that shortfall would come from not filling 14 open positions. Owens proposed another $1.4 million in cuts to projects, travel and supplies and included almost $300,000 in consulting fees. The board is scheduled to take a final vote on the budget Dec. 9.

The package includes an average rate hike of 2.65 percent, Owens said.

The rate hikes are only expected to bring in between $350,000 to $550,000 in new revenues in 2010, well short of what was needed to balance the budget before the cuts.

The district is trying to position itself where operating costs are covered by water charges and taxes, but is only half way to that goal, according to Assistant General Manager Tim Crough. Owens said the district has had to dip into its reserves to the tune of $15 million over the past few years in order to cover costs, a practice he said needs to stop.

The water district is looking at issuing $30 million in bonds for projects in the near future and that debt service can only be paid by property tax revenues, Owens said. That in turn will make those funds unavailable for operations.

While Owens projected a balanced budget for next year and 2011, she warned that the district could be $7.3 million short in two years, if the trend continues.

“You have to raise rates, defer capital projects and cut costs more,” to make it up, Owens said.

To contact Senior Staff Writer Dave Moller, e-mail dmoller@theunion.com or call 477-4237.