Federal and state officials raised questions Wednesday about some eastern New Mexico communities’ ability to pay for their share of the renewable water delivery system proposed by the Eastern New Mexico Rural Water Authority.
The authority has been created to develop a pipeline project to distribute water from Ute Reservoir to communities in Curry, Quay and Roosevelt counties.
U.S. Bureau of Reclamation and the state Interstate Stream Commission comments came during a discussion at an ENMRWA board meeting in Melrose of the project’s conceptual design report being developed by Roswell-based Smith Engineering Co.
Miguel Rocha, a planning team member with the Bureau of Reclamation, told the board that a more rigorous analysis of each participating community’s ability to pay should be included in the report.
“When you look at the project as a whole, on a regional basis, it’s viable. But when you it break down to the individual communities, some can’t afford it,” Rocha said.
He said the ENMRWA-founded study states that $2.6 to $4.9 million for the project will be obtained from commercial water users in the counties, in addition to money from communities’ taxes and water bills. While the study distributes commercial users’ contributions throughout the three counties, most of the commercial users are located in Clovis, Portales and Tucumcari, he said.
The financial problems could occur when small communities struggle to pay their share of the project’s operation and maintenance costs after it goes on line, Rocha said.
For example, Melrose, which has enacted a one-quarter percent gross receipts tax increase to help pay for its costs, would have to raise gross receipts taxes by between 4 and 15 percent to fully cover the costs, even when a percentage of the area’s total commercial capability is added to those payments, he said.
Doug Murray of the Interstate Stream Commission said his agency has reached the same conclusion.
“Melrose would need to raise meter rates by $40 a month over a period of years to cover its share,” he said.
Rocha said there are several options to pursue for additional funding for the project.
“There could be increased federal cost sharing, increased cost sharing by those communities who do have the ability to pay, and the state might decide to kick in some money,” he said.
However, he added, it is unlikely the federal government would pay operation and maintenance costs.
Clovis Mayor David Lansford said there is actually good news in Rocha’s comments, because they justify the board’s request for an “80/10/10” funding mechanism for the project, with 80 percent funding from the federal government, 10 percent from the state and 10 percent from the ENMRWA.
He added that communities also might sell water to a commercial users and apply the proceeds to their costs.
Board member Darrell Bostwick of Melrose said he agrees with Rocha that funding is a problem for many communities.
“I think most communities have some capacity, but I don’t know what each can do. It might not be enough. We’ll have to utilize everything available to us to participate in the project,” he said.
But, he said, if the project fails “eventually we will be without water and we will wind up as a ghost town, like some others.”