No matter which option the city of Española chooses to increase the city's water supply, residents can expect a $13 increase in their monthly utility bills within the next five years.
Engineers have estimated residential rates to increase to about $38 per month by 2012 and $40 by 2020 with the implementation of a groundwater-only system. Residents currently pay an average of about $25 per month on their utility bills, according to engineers' estimates.
Camp, Dresser and McKee Senior Engineer Mark Ryan said the estimates were based on an assumed average of three people per household using about 125 gallons of water per day.
A combination surface water and groundwater facility would send rates to $47 by 2012 and $55 in 2020.
"This analysis indicates an economic advantage to regionalization where a great number of individuals share the fixed costs of the system," the engineering team said in a report presented Monday to the City Council.
In the presentation to the Council, Ryan compared the estimated rates to the communities of Belen and Los Lunas for 2020.
Belen's average monthly water bill was listed as $45 and Los Lunas' came in at $59 compared with Española's two alternatives which were estimated at $40 and $55.
Mayor Pro Tem Alice Lucero dismissed the comparisons to the other cities during the council's workshop meeting and said she wasn't sure Española's residents could absorb a major increase in rates.
"This isn't Los Lunas or Belen," Lucero said.
Rate estimates were not provided for the time after 2020, which is when regional partners are expected to join the system.
With either option, operation and maintenance costs will primarily be paid by citizens via their water bills, Cordova said.
Increases in water utility bills should be nothing new for residents. Between July 2006 and April 2007 utility bills were increased by about 16 percent, Water Utility Department Billing Manager Sandra Bustos said.
A 2 percent utility increase will also go before the city's Finance Board at its next, as of yet, unscheduled meeting, city Water Services Director Marvin Martinez said.
The increase would help cover rising operation and maintenance costs, Martinez said.
"We have to do it," Martinez said. "Everything has skyrocketed. We used to fill up a truck with fuel for about $40 to $50, now it costs us about $80 or $90."
However, it is unclear when the increase would go into effect. The Finance Board is an ad hoc committee that could make a recommendation to the full City Council, Deputy City Clerk Lucas Gauthier said.
The fee would be applied to both customer's current water service fee as well as their wastewater fee, Martinez said.
The rate increases are called for in the city's utility ordinance, which was passed in 2001. The ordinance states that the Council should annually review the rates to ensure they are in line with operating and maintenance costs as well as the consumer price index. The index is a statistic created by the federal Bureau of Labor Statistics that tracks monthly data on changes in the prices paid by consumers for a selection of goods and services.
This ordinance was passed a year before city voters approved a one-eighth gross receipts tax specifically targeted to cover costs for the city's water system and keep down rates.
Despite the passage of this tax increase, city officials said the tax would not prevent increases called for in the 2001 ordinance.
Residential water rates were set at $3.16 per 1,000 gallons and wastewater rates at $4.70 per 1,000 gallons when the Council passed the utility ordinance in 2001.
Cordova said the gross receipts tax approved in 2002 was passed in order to keep down rates by defraying the amount of money the city needed to borrow for water projects.
"We have the potential to borrow about $6 million in bonds off of the amount of our gross receipts tax," Cordova said. "My goal is that we don't have to borrow the whole $6 million. The more money we can get from other sources, the less we have to borrow."
Martinez said when the gross receipts tax was passed the city had about 13 water and wastewater projects waiting to be completed and that the tax was passed in order to aid those projects.
"(The tax) was passed to fund our bigger projects," Martinez said.
Many of those projects, including a proposed surface water treatment facility, remain uncompleted and rates have continued to increase.
Since 2004, the city has raised rates by a total of about 50 percent, Martinez said.
"(The Department of Finance Authority) came down on us," Martinez said. "We had to raise our rates to keep up with our costs."
The city council voted in 2005 to implement increases on water and sewer rates for 2005, 2006 and 2007, each year increasing rates by 16 or 17 percent.
"They never implemented it, though," City Clerk Veronica Martinez said. "No one ever plugged them in and applied them. (The Council) discovered it in about August last year and decided to raise rates."
Rates went up by 34 percent in 2006 as a way to make up for forgetting to actually charge residents the amount the council had voted on in 2005. The 2006 city elections brought five new members onto the Council and a new mayor.