Curry County representatives to the Eastern New Mexico Rural Water Authority said Wednesday smaller communities in the county cannot afford the Ute Lake water project without financial help from Clovis.
The project involves building an 87-mile-long pipeline from Ute Lake near Logan to Portales.
Five county representatives — Clovis Mayor David Lansford, Curry County Commissioner Pete Hulder, Melrose City Councilor Darrell Bostwick, Texico Fire Chief Lewis Cooper and Grady Mayor Wesley Shafer — said Wednesday to make the project affordable communities may have to adopt a system of “cost leveling.” They described that as a method by which some of the smaller communities’ cost is shared by all.
Clovis’ share of the project cost, at $5.3 million, is almost half of the $11.1 million total. To pay for it, the city could raise its average individual water rates 74 percent, from $41 per month to $72 per month. City officials have said the city can afford its share of the project and could reduce the amount of the rate hike by a gross receipts tax increase.
But, the expense to small towns has raised concern at recent NMRWA board meetings and at the Aug. 13 meeting members said communities in each county should discuss cost-saving methods among themselves.
The project’s annual cost to Melrose, for example, is $296,906. To cover the expense, Melrose would have to raise its average individual user water rates from $18 to $83 per month. Melrose could lessen that increase by raising property or gross receipts taxes. But a one mil property tax increase would generate only $4,557 a year and one-quarter of a percent gross receipts tax increase would generate only $3,960 a year.
Without cost leveling, Grady could see rates rise from $33 to $96 per month. Texico residents might see their rates increase from $50 to $85 per month. Texico also could raise gross receipts and/or property taxes, but the raises would generate only relatively small amounts, officials said.
Lansford said the political costs of raising taxes in the small communities would probably not be balanced by the small amounts of financial return.
“I don’t think I’d like to go to Melrose and tell them we’re going to raise water rates and gross receipts taxes and property taxes. I think we’re looking at fee increases for all of us. To subsidize that with gross receipts or property taxes (in the small towns) is not reasonable,” he said.
To make the small towns’ water rate increases affordable, the representatives said, some form of “cost leveling” is required. Under one strategy, raising Clovis’s water rate increase by $1 would lower the smaller communities’ increases between 290 and 113 percent. In another, all the communities’ rates would rise by about $32.
Lansford said in March the city of Clovis will ask voters to approve a one-quarter of a percent gross receipts tax increase. The increase would generate about $1.3 million, $600,000 of which would be used for the Ute Water Project. That amount would reduce Curry County’s project expenses by 12 percent and could help reduce the expenses of all the county’s communities, he said.
Although the various strategies are complicated, some form of cost leveling is necessary, the officials said.
“I don’t see how we’re going to get away from cost leveling,” Lansford said. “Without it, Grady and Melrose are …
“Out,” said Shafer, interrupting Lansford in mid-sentence.