The Metropolitan Water District of Salt Lake's board approved a $5.6 million budget Monday for calendar year 1989 and plans to spend almost $3.7 million of that on capital improvements.

Topping the water district's list of big-ticket expenditures are a $2.5 million pipeline planned for construction in the city's northwest quadrant and $950,000 for interest and principal payments on Little Dell Dam, now under construction by the Army Corps of Engineers in Parleys Canyon.Revenues from taxes and water sales are expected to fall short of the expenditures planned, mostly because of the pipeline. The district plans to use reserves to make up the expected $345,645 shortfall.