Water authority sets financial plan

A financial plan for the 2022-2023 fiscal year that values remaining construction on the Eastern New Mexico Water Utility Authority’s Ute Lake Water Project at nearly $750 million received approval Thursday from the utility authority’s board of directors.

After a workshop in March, board Chair Mike Morris, who is also mayor of Clovis, said the board learned that the estimate of the cost of the project was greater than was anticipated then, but that the total cost, including loan interest, would be reduced, so, Morris said, “We broke even.”

After the workshop, Morris said, ENMWUA officials learned that the 10% local portion of project costs is eligible for low-interest loans from the New Mexico Drinking Water State Revolving Loan Fund through the state’s Environment Department and the New Mexico Finance Authority, which lowers interest rates to 1%.

At Thursday’s meeting, Eric Harrington, the water authority’s financial adviser with RBC Capital, said that with interest and other costs added, the total cost to be covered would be about $814 million.

The federal government’s 75% share of that cost is about $610 million, the state’s 15% share total is near $122 million, and the 10% local share comes out to around $81 million, Harrington said.

The water utility authority board on Thursday also voted unanimously to authorize the authority’s staff to apply for the drinking water fund grant.

Morris said if the grant goes through, the cost savings will be passed along to the authority’s members, including Clovis, Portales, Texico and Elida.

Clovis’s current share of the local cost is 76.3%, Portales’ is 21.8%, Texico’s is 1.5% and Elida’s is 0.3%.

Morris said that according to the plan, local contributions will have to rise by about 14% per year starting in 2023 to ensure that the local obligations are met, at least until 2031, the year that the project is expected to become operational.

After that, Herrigan noted on Thursday, the amount of payments from federal, state and local contributors is likely to decrease as it is offset by revenue from water sales.

In other action Thursday:

* The board approved ENMWUA vehicle use policies for staff and board members, as well as internal financial policies for the authority.

* John Ryan, the authority’s federal lobbyist, said he was told the commission should seek more federal funds after the authority received $170 million in federal infrastructure funds. There is more available, Ryan said, and he is working with the offices of New Mexico Third District U.S. Rep. Teresa Leger Fernandez and U.S. Sen Martin Heinrich to seek out additional funding.