Portales sets punitive water rates

PORTALES -- The city of Portales has set punitive water rates for commercial and industrial users who consume above a base allocation in an effort to conserve the city’s water resources.

The change came to light at the July 26 meeting when the council addressed a request by a cannabis producer to get a manufacturing/industrial resource service permit to operate a business in Portales.

The applicant requested an average of 15,000 gallons a month as his usage.

According to the new city water rate structure for new commercial and industrial users, any level of use above the base allocation triggers a punitive rate.

The city public works committee recommended approval of a permit for Tyson Lewis, owner of Lucky Keystone Rd. LLC/cannabis production, provided his base allocation or usage be reduced from 15,000 to 9,000 gallons a month.

The new rates, city Public Works Director John DeSha told the council, provides for punitive rates for those producers who exceed their allotted water use or monthly base allocation.

The first 1,000-3,000 gallons above the base allocation costs $250 per 1,000 gallons; 4,000-5,000 gallons above the allocation costs $500 per 1,000 gallons; 6,000 gallons above the allotment cost $1,000 per 1,000 gallons, as stated in the city permit language, DeSha told the council.

The first “exceedance” beyond 10,000 gallons would result in a disruption in service pending a plan for a “correction,” the permit states. A second exceedance of more than 10,000 gallons would result in a discontinuance of service.

Lewis lists on his application his business type is indoor cannabis horticulture.

Lewis spoke to the council about what he called “very excessive and restrictive” rates.

Council member Veronica Cordova explained the committee’s reasoning. She said the committee reduced Lewis’ base allocation to 9,000 gallons a month because that is the high use for residential areas.

Cordova said the city is on water restriction and that is why the committee reduced the base allocation to 9,000 gallons before recommending approval.

Lewis said his request is basically the equivalent usage of a house and a half in a residential area. Also, his business will provide employment to the community.

Under this rate structure, he said he could be paying as much as $45,000 for water. Other parts of New Mexico do not charge these high rates, he said.

“I am just looking for an equal opportunity to run a business,” Lewis said.

Restaurants typically use 3,000 to 7,000 gallons a day, he said. That would cost $300,000 to $400,000 a year, which would be prohibitive. His business is asking for 550 gallons a day.

DeSha said this is the first time the city has instituted the new rates, but it plans to apply them to any future commercial or industrial user that applies for a permit in Portales. The reason for the rate is “strictly” because of the current “crisis with water.”

Eldon Merrick, real estate broker with Buena Vista Realty in Portales, spoke during the public comment period of the meeting.

“We might as well shut down the doors” to new business, he said about the new water rates.

In an interview on Monday, Merrick said he represents the seller of the property Lewis had planned to buy as a site for the business.

The city water rate is so high, “I basically lost this sale,” he said. “As far as selling that building for a restaurant or car wash,” for example, anyone else would have to pay that rate.

He said Lewis had planned to employ 10-15 people in his new business.

The council voted to approve Lewis’ application with the possibility of amending the rate in the future.

Attempts to contact Lewis for an interview were unsuccessful.