Water authority passes two-year update to its financial plan

The Eastern New Mexico Water Utility Authority (ENMWUA) board of directors passed a two-year update to its financial plan that leaves existing plans mostly unchanged.

The plan outlines how federal, state and local funds will be collected and spent for the construction of the Eastern New Mexico Rural Water System, the ENMWUA’s $814-million project that is expected to bring water from Ute Lake near Logan, treat it, then pipe it to ENMWUA member communities.

The member communities include Clovis, including Cannon Air Force Base, Texico, Portales, and Elida.

The financial plan shows how local shares of the cost are expected to rise as the project nears completion until water sales can replace federal and state contributions to pay off capital costs, Eric Harrigan, the authority’s financial adviser with RBC Capital on Wednesday told the board.

The local contribution is expected to jump by 13.6% in 2023 from 2022’s contributions of $3.1 million. The 2023 local contribution is expected to be more than $3.4 million in 2023, Harrigan said, using charts that make up the financial plan.

The local share is expected to rise by 13.6% per year until 2028, when it is expected to level off at less than $4.6 million per year and remain at that level through 2036, according to the cash-flow chart in the plan. Water sales from the completed project are expected to begin in 2031 and climb from $11 million annually to $32.4 million by 2055, by which time revenues will be sufficient to sustain the project without additional aid.

In the meantime, the local contributions are set to start declining in 2037 and taper off through 2048, when water sales revenues alone will cover debt payments and operating expenses.

The federal share of project costs, which make up 75% of construction costs will be paid out through 2025, according to the chart, in annual payments that will decline from $190.5 million in 2022 to $135,291,048 in 2025.

The state’s 15% share will also be paid off by 2025, the chart shows, in annual payments that will decline from 38.1 million in 2022 to $27,9 million in 2025.

The ENMWUA board on Tuesday also approved an annual review of its easement acquisition plan. The plan outlines how temporary and permanent easements will be used to fulfill the needs of 130 miles of pipeline that will cross up to 450 different private property parcels.

Compensation to property owners for easements varies according to pipeline size and depth, market prices for property and whether the property will be used temporarily, as for a staging area, or permanently, as a permanent pipeline.

The board on Wednesday also approved eight easement agreements with property owners along the route of a pipeline that will carry finished, potable water between Cannon AFB and Portales.

Jim Honea, project manager for Jacobs Engineering, told the board a portion of that pipeline is nearly finished with construction, and that permitting is complete for the unfinished portion of the pipeline and will be submitted for review.

Honea also updated the board on progress in planning for pipelines that will carry untreated water from Ute Lake up the Caprock to a treatment plant, as well as for pipelines that will carry the treated water to member communities.

The board also set Wednesday for an Industry Day for contractors and subcontractors who may be interested in upcoming projects of the Eastern New Mexico Rural Water System. More information was expected to be sent out as the location and agenda were finalized.