Water authority agrees on grant proposals

MELROSE — The Eastern New Mexico Rural Water Authority took steps to secure funding before an April trip to Washington, D.C., to seek authorization for its primary purpose  — the Ute Water Project.

After discussion, and an exploration of repayment options, the authority agreed at its regular meeting Wednesday to a pair of grant/loan agreements with the state’s water trust board totaling $3.52 million.

The money would be used to further a preliminary design required to receive federal funding for the $436 million project, which would pump water from Ute Lake in Quay County to the authority’s eight entities.

The sticking point of the money was the loan agreements. For each of the grants, 20-year loans at .25 percent interest would be required. The first grant, a $1.25 million grant, would require a $125,000 loan (10 percent), while the second, $2.27 million grant, would require $454,280 (20 percent) on a loan.

Combined, the two loan payments would equal up to $30,412 annually between the eight entities of the authority.

Portales Mayor and authority Vice Chairman Orlando Ortega said the interest rate was great, but said his community was tapped out on water project funds and he couldn’t approve anything without approval from his city’s finance authority — a notion shared by Elida Mayor Kay Nuckols and Texico representative Lewis Cooper.

Don Clifton, the director of finance for Clovis —the project’s fiscal agent —suggested the first year’s payment, due June 1 of next year, could come from the $200,000 the members pay as authority dues. Cooper said that would be an adequate compromise for the first year, and the grants were accepted by a unanimous vote.

Project Manager Scott Verhines concluded the meeting by presenting a draft financial plan for the project, which would call for 75 percent federal, 15 percent state and 10 percent local funding.

The plan was agreed to in draft form, and Authority Chairman David Lansford is hopeful each entity can get the plan approved by its councils and commissions before an April 16 meeting.

The following week, members of the authority will be in Washington, D.C., for the introduction of a bill seeking federal authorization of the project.

The plan calls for construction to start in 2014, with water delivery in 2019.