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Editorial: Investment in Water System Is Crucial

People can’t live without water. It’s that basic.

So there is no more basic an infrastructure need in any city than its water system.

Albuquerqueans are adapting to this desert climate by learning to conserve water, with metro area consumers admirably cutting per capita water use 40 percent since 1994 — reaching a key goal of 150 gallons per day 13 years earlier than expected.

While that good effort helps stretch our supply, equipment still wears out over time and needs replacement.

That’s why officials from the Albuquerque Bernalillo County Water Utility Authority predict more rate increases on the horizon, even though a recently approved rate hike boosted revenue this year by 10 percent and a similar increase will take effect in 2014. The authority is an enterprise fund that relies on fees for service, rather than taxes.

The metro area utility says the two increases won’t cover the $250 million it will need to spend upgrading its sewage treatment plant, and a recent study showed a $36 million per year shortfall in money needed to cover the costs of routine replacement of decaying pipes, aging pumps and other infrastructure.


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What the scheduled rate increases will do is help shore up the water authority’s finances. Standard & Poor’s recently downgraded the authority’s bond rating from AAA to AA+, citing concerns about cash flow in relation to debt service. The utility recently incurred $500 million in debt to build a system that uses San Juan-Chama water from the Rio Grande — finally taking advantage of a wise investment in water supply initiated in 1963.

But investors use the ratings as a guide when deciding whose bonds to buy. Lower ratings generally mean the utility would pay a higher interest rate, but water authority chief Mark Sanchez says he doesn’t expect this downgrade to have much of an effect on ratepayers. It is important, however, to hold the line here. Further downgrades mean more interest expense.

Albuquerque generally ranks around the middle of the pack when water rates for New Mexico cities are compared. Santa Feans are used to paying more than twice as much as water authority customers.

But with an ailing sewer plant and decaying pipes, Albuquerque area water users should take note: The days of dirt cheap water may soon be over.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.