Portales has issues with Ute authority language

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.