"We went gang-busters this year in turf rebates," said water authority spokesman J.C. Davis. "It's a nice problem to have, but you don't want to bust your budget."

The authority set aside $42 million for rebates through June 30, 2009, the largest one-year budget yet for the water conservation program. Already, $19 million in rebates has been paid out and another $18 million is pending, leaving just $5 million for the rest of the fiscal year.

Golf courses and homeowners associations are driving the drain on the rebate program, said Authority Conservation Manager Doug Bennett. "They were doing gigantic projects. It was much more than we were anticipating."

In January, the authority adopted a rebate rate of $1.50 per square-foot for all landscape conversions, regardless of size.

Four months later, the Las Vegas Valley Water District raised its water rates to send what officials called a "pricing signal" and remind consumers about the importance of conservation. Minimal water users were expected to see their bills go up about 17 percent, while high-volume users would see their bills jump more than 30 percent.

Canyon Gate Country Club is eliminating 17 acres of grass from its course, and the rising cost of water has everything to do with it, said golf course superintendent Kent McCutcheon.

The private, 18-hole course near Sahara Avenue and Durango Drive converted 35 acres of turf in 2004, but the recent water-rate increase prompted officials there to look for more grass to shed.

"Our water bill is going to be over $800,000 this year," more than double what it was four years ago, McCutcheon said.

Since the cash-for-grass program was launched in 1999, it has paid out $126 million in rebates and saved nearly 25 billion gallons of water by replacing 120 million square feet of turf with desert landscaping across the Las Vegas Valley.

Bennett said the changes to the rebate rules are minor and only impact large landscape conversions. "Ninety-five percent of our customers will see no difference."

Instead of a flat rate of $1.50 per square foot, the authority will now rebate customers $1.50 for each of the first 5,000 square feet and $1 for each square foot after that.

The total rebate for a single project will be capped at $300,000, which should force golf courses and other commercial properties to break their large projects up over multiple years, Bennett said.

"You won't be able to drive a bulldozer around a golf course and do thirty, forty or fifty acres in a single project."

Pending landscape conversions already approved by the authority will not be affected by the new rules.

Bennett said the change was meant to keep a handful of massive landscape conversions from draining the rebate fund before the end of the fiscal year, which would likely force the authority to temporarily suspend the program until the budget year.

In past years, the authority has added more money to the rebate fund as needed throughout the year. But in these economic times, Bennett said, "augmenting the budget wasn't an option."

Even with the adjustments approved by water authority board members on Thursday, Bennett said the terms of the program are still more generous to large property owners than they were in 2006 and 2007.

But not everyone is happy about the changes.

A few golf course managers complained that the new rules would force large property owners to shell out more of their own money to rip out their turf.

One local landscaper indicated that some property owners actually profited from the program because they got more back in rebates than they paid out for the work.

But complaints like that get little sympathy from Bennett. After all, the rebates were never meant to cover the entire cost of landscape conversions.

"It's an incentive program, not a free ride," he said.

Contact reporter Henry Brean at hbrean@reviewjournal.com or 702-383-0350.