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Gov. may have to fight for Rio Rancho well project

Rio Rancho officials hope New Mexico legislators will back a proposal by Gov. Susana Martinez's administration to spend money to replace old drinking water wells.(Courtesy of City of Rio Rancho)

Rio Rancho officials hope New Mexico legislators will back a proposal by Gov. Susana Martinez’s administration to spend money to replace old drinking water wells.(Courtesy of city of Rio Rancho)

Rio Rancho needs nearly $4 million to replace a pair of old failed water wells. Gov. Susana Martinez wants state government to pick up the tab.

The city’s leaders came calling on the governor’s staff in November, days after a Martinez press release and news conference announced her hope to make water a top priority in the 2014-15 fiscal year. Martinez proposed spending $112 million in state capital spending money on water projects around the state, 60 percent of the state capital money available from severance tax bonds in the 2014-15 fiscal year.

Rep. Tim Lewis, R-Rio Rancho, arranged the meeting between Rio Rancho city officials and the governor’s staff to talk about their needs. “I thought this would be a perfect fit,” Lewis said in an interview.

With an estimated $1 billion needed over the next two decades to upgrade New Mexico’s water and wastewater systems, according to an American Society of Civil Engineers study, the Martinez administration views the $112 million as a down payment on what will need to be sustained effort in years to come. But what legislators complain is a murky process through which the administration’s projects for funding are being chosen, and conflict with other legislative priorities for the money, means the initiative faces contentious discussions in the current New Mexico legislative session.

The idea of spending money on water projects around the state has gotten a generally positive response from legislators, who say they are increasingly hearing from communities looking for help meeting their water needs.

“Eighty percent of my requests are water requests,” said Sen. Sue Wilson Beffort, R-Sandia Park.

Nontraditional approach

Water projects like this old Rio Rancho well that needs replacement are the subject of a Santa Fe debate over how to best spend state money. (Courtesy of city of Rio Rancho)

Water projects like this old Rio Rancho well that needs replacement are the subject of a Santa Fe debate over how to best spend state money. (Courtesy of city of Rio Rancho)

But as the proposal moves through this year’s legislative session, the devil will be in the details. The proposal clashes with legislative practice, which by tradition gives legislators control over two thirds of the capital budget and the governor the other one third. To make the effort work, the administration will have to persuade legislators to share money that is jealously guarded by legislators trying to meet a range of needs in their districts.

“Capital outlay is driven by legislators,” said Rep. Brian Egolf, D-Santa Fe. “It’s the only way for dozens of small communities in New Mexico to meet their needs.”

Some legislators also have questioned how the initiative fits in with existing state water funding programs, given a recent legislative staff report raising questions about fragmentation, duplication and unspent money in existing water programs. Without dealing with those problems, there is a risk legislators will return in a year to find projects uncompleted and money unspent, said John Arthur Smith, chairman of the Senate Finance Committee.

“If we don’t have an effective delivery system,” Smith said at a hearing last week, “we’re going to come back next year and have a pileup of additional dollars.”

The administration has singled out Maxwell, Magdalena and Vaughn, all towns that suffered water shortages during last year’s drought, as the kind of places that need the state’s help.

In addition to water supply shortfalls, according to Environment Secretary-designate Ryan Flynn, there are 39 mostly rural water systems that are currently under state administrative orders for violating legal contamination standards. As an example, Flynn and his staff have singled out small mutual domestic water systems outside EspaƱola that currently have high levels of naturally occurring uranium that require a costly new treatment system that is beyond the communities’ financial reach.

“A lot of the problems are happening in small communities,” Flynn said. But larger, more urban and affluent communities are also lining up for the money, with Rio Rancho, Las Cruces and Albuquerque all mentioned by the Martinez administration as possible funding priorities.

Waiting for details

Frustrated legislators say they have been waiting for more detail on which projects the governor wants to fund with the $112 million. They complain that Martinez sprang the idea at her November news conference, rather than via a discussion with legislators about how to best spend the state’s capital money.

“It kind of came through a press release, instead of a bipartisan, both-branch discussion,” said Sen. Peter Wirth, D-Santa Fe, during a constituent town hall meeting in early January.

Martinez and her staff in recent weeks have held public events in a number of communities around New Mexico announcing one project at a time, including EspaƱola, Chama, Socorro, Las Cruces and Santa Teresa. But the administration has not identified how they want to allocate the majority of the money.

“We’re all waiting for the list,” said Senate majority whip Tim Keller, D-Albuquerque.

Keller and his colleagues are likely to be disappointed. Rather than starting with a list, the administration is working with individual legislators to identify projects, based in part on data collected in recent years by the state Environment Department, the Office of State Engineer and other agencies that deal with water, Flynn said in an interview.

“A list needs to come from collaboration between the executive and the Legislature,” Flynn told members of the Senate Finance Committee on Thursday.

“It’s a political process,” Flynn acknowledged in an interview.

Tangled process

The process by which New Mexico spends its current water dollars is a tangled one. There are seven different spending programs with sometimes overlapping and sometimes competing bureaucracies set up to administer some $81 million a year, according to a November legislative committee report. “They’re fragmented and lack coordination,” LFC analyst Jeff Canney told the Senate Finance Committee.”

“This is just gross inefficiency in government,” complained Sen. William Burt, R-Alamogordo, during a Senate Finance Committee meeting, in response to Canney’s report.

Critics point to unspent balances in a number of water financing accounts, including more than $50 million currently unspent in the state’s Wastewater Facility Construction Loan Fund. Administration officials, however,note that most of that unspent money is already allocated, merely waiting final paperwork from the communities for which it is destined.

Another $37 million in the state’s Drinking Water State Revolving Fund remains unspent, according to a report from the Legislative Finance Committee. The fund offers loans, and once they are paid back the money is then available for other communities. Communities prefer grants because they do not have to be paid back, the LFC report concluded.

One reason existing money goes unspent, according to Flynn, is that small communities lack the expertise to do the planning, accounting and engineering work needed to apply for the money. He hopes the governor’s capital spending requests could in help communities deal with those problems.

Senate Majority Leader Michael Sanchez, D-Belen, questioned pumping new money into a system that already has difficulty spending the money it has. Sanchez said he plans to introduce legislation to consolidate state water capital spending under a single government agency.

Administration officials agree with the need to improve the existing system for allocating money.

“There should be a better way to do that,” State Engineer Scott Verhines told the Finance Committee.

But problems with the existing system should not prevent increasing the money available to deal with the growing water issues facing communities, administration officials say.

“Clean, safe supplies of drinking water are a basic human right for all New Mexicans,” Flynn said.