Portales has issues with Ute authority language

By Kevin Wilson: Freedom New Mexico

MELROSE — The Ute Water Project trickled closer to reality Thursday
with local entities reaching agreement on several key issues.

But representatives of communities planning to be part of the $432
million project want at least one more study session to iron out their
differences on proposed state legislation that would move the Eastern
New Mexico Rural Water Authority into water utility status.

The authority — which now seeks appropriation money for the Ute
Water Project since it gained federal authorization in March — did not
schedule a date for another study session.

Melrose representative Wendel Bostwick said such a session would be
best held before the authority’s June 17 meeting in Portales.

The city of Portales has issues with the proposed legislation and is seeking changes to the language.

Project Manager Scott Verhines said utility status would allow the
authority to acquire better rates on bonds to raise money to pay for
the pipeline project.

It would also, Verhines said, enforce a stronger unity than the
authority’s current joint powers agreement setup, which includes no
penalties if an entity pulls out of the authority.

Current members are Clovis, Portales, Texico, Melrose, Elida, Grady and Curry and Roosevelt counties.

Portales Mayor Orlando Ortega said his concerns are with the
legislation’s inclusion of sewer and wastewater systems and vagueness
in language. Ortega believes it would allow an authority a significant
amount of leverage on water systems the city owns.

Ortega also stressed a need for oversight.

Joe Thompson, who handles state lobbying efforts for the project,
said he was “embarrassed” and “mortified” at some of the language in
the legislation. Thompson said he would be glad to sit down with counsel
and redraft the legislation to address Portales’ concerns.

“I believe we will be able to clean up the legislation to the
satisfaction of all members,” Thompson said. “I don’t believe we’ll be
able to pass anything without unanimous consent (from authority
members).”

Any hearing on the proposed legislation would require an exception
from Gov. Bill Richardson to come up in next year’s 30-day Legislature.

Ortega also requested an updated cost estimate of the project, which
would eventually pipe water from the Ute Reservoir in Quay County to
the authority’s eight entities.

The project is estimated at $432 million but Ortega noted that estimate was acquired in 2005.

The bulk if the bill, 75 percent of the cost, is being paid for with federal stimulus money.

The remaining costs would be split with the state paying 15 percent and local entities kicking in 10 percent.

Greg Gates, an engineer with CH2MHill of Albuquerque, said the latest cost estimate should be available in July.

In other business

• The authority approved a new program management contract with GC
Engineering of Albuquerque, which was the only company to submit a bid.

The contract is for one year, with three additional option years.

The contract starts at $610,316.44 for management duties, including
a $207,350 salary for Verhines and $54,375 for Project Engineer Greg
Gates. Other expenses covered are campaigning efforts and finance
consultation with RBC Capital.

Verhines said other expenses, including travel/per diem and
administrative assistant fees are only billed if GC incurs them during
its course of duties. Verhines said GC did not bill the authority for
the $58,000 budgeted for administrative assistants last year because
they never hired anybody, but will likely hire help this year.

• John Ryan, who handles federal efforts for the authority, said
federal stimulus dollars will not be going to the water project as of
right now. Moreover, Ryan said, none of the projects approved along
with the Ute Water Project in March’s omnibus land management bill drew
stimulus funds because projects were mostly identified in February.

Ryan said Sen.Jeff Bingaman, D-N.M., chair of the Senate Energy and
Natural Resources, has expressed disappointment that $1 billion in
stimulus money sent to the Bureau of Reclamation went towards New
Mexico projects. Ryan said the intent is to rectify those errors when
the time comes to build the 2009-10 budget, with appropriations set to
begin in October.

Project Manager Scott Verhines said while the Ute Water Project got
no stimulus funds for its intake structure project, everybody they
talked to in Washington, D.C. advised they move forward with the intake
structure, which would be a distribution system located next to the Ute
Reservoir.

“We are still hopeful if a project falls off the map for whatever
reason,” Verhines said, “we are hoping to find our way to the top of
the list (of alternate projects).”

• Joe Thompson, who handles state campaign efforts, said the state’s
water trust board was friendly to the Ute Water Project at its most
recent meeting.

He said the authority requested $4.5 million for the upcoming year
from the board. It received a $3.825 million recommendation, but got
$400,000 additional from other projects that had obstacles.

“It was evident the state engineer has taken an extreme interest in
our project,” Thompson said. “People are really tuned in to what we’re
trying to do.”

The money, Thompson said, would likely be on a grant-loan agreement,
with 10 percent of the money to be loaned over a 20-year period with
.25 percent interest.

• The next meeting is tentatively scheduled for 3 p.m. June 17 at Portales City Hall.