The Bernalillo County Commission will consider adopting an ordinance at its June 25 meeting that will institute a fee on utility companies that use county right-of-way to run water, sewer, electric and communications lines.
District 5 Commissioner Wayne Johnson, though, said he will not be voting for the new law.
“This is the county instituting a usage fee which is really the imposition of a tax,” Johnson said.
State law allows counties “to impose charges for reasonable actual expenses” to utility companies using county right-of-way. In October 2012, the Bernalillo County Commission passed a resolution stating that the county could not charge a utility a franchise fee to use the right-of-way and established a set fee of $250 for the county to conduct design reviews on new projects. The county also has a fee structure to cover the cost of damage to roads and other county property through the construction process, as well as maintenance.
The new ordinance, if passed, would repeal that resolution and institute a charge of 3 percent of the utility company’s gross revenue. That would be expected to raise about $6 million for the county every year.
According to supporting documents from county staff, use of utility easements costs the county nearly $7 million each year. Those expenses include about $3.4 million paid out for road repairs due to utility cuts shortening road life, $2 million for expenses associated with capital projects, $1.3 million for operational expenses and other miscellaneous costs.
The ordinance would not only affect large utility companies such as PNM, CenturyLink and Gas Company of New Mexico, but small neighborhood-based utilities as well.
Phil Pickman, a board member of the Woodland Subdivision Sewer Cooperative Association, said rates would have to increase by nearly $20 a year for each of the association’s 73 members to cover the cost of the fee. Members already pay $360 a year to the association to maintain the small sewer system. With the ordinance, the county would be taking more money for the maintenance of the right-of-way than the actual cost, he said.
“The right-of-way is something we’ve already paid for,” Pickman said.
Entranosa Water and Wastewater Association, which has about 2,300 members in Bernalillo County, also is opposed to the ordinance. John Jones, chief operations officer for Entranosa, said he doesn’t have a problem with the ordinance in general, saying the county has a right to “define responsibilities” in the use of utility easements.
However, he said, the implementation of the fees is contrary to what state law allows.
“State law says the county is entitled to recover reasonable actual costs,” Jones said, “but this is a tax.”
He added that in the years that he’s run Entranosa, the county has never been able to come up with an accurate accounting of the costs to the county when utility companies use the right-of-way.
Johnson said he expects the commission to approve the ordinance over his objections. If that happens, he said he expects utility companies will file a lawsuit over the law.
If so, and the law stands up under the scrutiny of the courts, Johnson said the costs will be passed on to utility members and customers.
“Utilities would be right to fight this,” Johnson said. “We don’t have the legal ability to pass this tax.”