The Rio Rancho Utilities Commission has directed staff to re-evaluate recycled water rates, a move that would address a request by the potential Chamisa Hills Country Club buyers to set the rate at 20 percent of the potable irrigation rate.
The commission took up the issue at its meeting Tuesday night at City Hall.
City Public Works Director Scott Sensanbaugher recommended a reused water rate set at a percentage of the potable irrigation water rate for all users, without special deals. City staff members also don’t want to force a land-use decision by keeping the rate at a level that won’t allow a business to be profitable, he said.
Sensanbaugher said city staff members had spoken with the group wanting to buy the golf course.
“One of the key parts of that proposal is that we reduce the rate for recycled water,” Sensanbaugher said.
Chamisa Hills Country Club, which includes a 27-hole golf course, has been deteriorating. Local businessmen Robert Gallagher and Jhett Browne recently announced their intention to buy it.
The golf course irrigates with recycled water.
It has been paying 47 cents per 1,000 gallons under a contract with the city that expires in July. Then recycled water rates will go up to $3.28 per 1,000 gallons, or 60 percent of the potable irrigation water rate.
Albuquerque charges $1.76 per 1,000 gallons for reused water.
Sensanbaugher recommended making Rio Rancho’s rate “reasonably” competitive.
Setting the recycled water rate as a percentage of the potable irrigation rate would help provide steady income and predictability, he said.
While only two entities use recycled water now, he expects the city to be able to water parks and medians with it within a year. Because the water utility operates from an enterprise fund, the city has to pay into that fund for water.
Plus, Sensanbaugher said, Rio Rancho Public Schools is interested in recycled water.
Sensanbaugher said the expense of providing recycled water involves operating costs and the cost of putting in the system.
“The reality is, like a car, the capital costs far exceed the operating costs,” Sensanbaugher said.
Sensanbaugher said more users mean the city will be more likely to recoup the capital costs.
“I think I’m open to a re-investigation of this through you guys,” Utilities Commissioner Don Dulac told Sensanbaugher. “But maybe I’d like to see an analysis done regarding, ‘Is the recycled water program still worthwhile if we have the opportunity of injecting every one of these gallons back into the aquifer?’”
Sensanbaugher responded that recycled irrigation water and re-injection are both parts of the city’s recycled water program.
The buyers’ perspective
Gallagher, who lives next to the north golf course, asked the city for a recycled water rate of 20 percent of the potable irrigation water rate, or $1.09 per 1,000 gallons in July.
“We think it’s viable because we can absorb that type of rate and still make the club work,” Gallagher said.
He and Browne initially asked for a special deal with even lower rates. They’ve changed their minds.
“We’re not here asking for a special deal for the country club, don’t want a special deal for the country club,” he said.
No one can afford to rehabilitate and operate the golf course at the current recycled water rate, plus the two scheduled increases that would put the rate around $5 per 1,000 gallons, he said.
Also, Gallagher said time was of the essence because of the need to start work with grass early enough in the growing season.
Utilities Commissioner Moses Winston IV said he wanted to be sure Gallagher and Browne had a plan to make the business work because decreased recycled water rates would be a city investment.
Gallagher said they had a great plan to include the public, incentivize membership and offer great service.