Rio Communities City Council votes to establish water system

RIO COMMUNITIES — They never thought it would be easy to form their own municipality 12 years ago, but they did. Now, the Rio Communities governing body is taking steps to establish its own water and wastewater system.

The decision comes after New Mexico Water Service Company, the private company that provides sewer and water service to Rio Communities and other areas in Valencia County, petitioned the state to increase new sewer connection fees by tens of thousands of dollars.

NMWSC filed an application with the New Mexico Public Regulations Commission in January and again in April to increase its new sewer connection fees for the first time in more than 20 years.

At a special city council meeting on Monday, May 5, the council voted unanimously to petition the PRC to let the city become an intervenor in the case.

During the special meeting, Cynthia Apodaca, NMWSC general manager, told the local governing body the new connection fees would effect projects the company knows are “imminent, but it doesn’t effect any projects in Rio Communities.”

Apodaca also assured the councilors the new connection fees wouldn’t apply to the new Maverick gas station being built at the intersection of Rio Communities Boulevard and Manzano Expressway unless the developer requested a larger connection.

“I understand there is already a service connection for the old car lot,” Apodaca said. “The short answer is, Maverick won’t have to pay the new fee.”

Download PDF

This is the second time this year the company has requested a connection fee increase.

On Jan. 16, NMWSC filed an increase request, asking the new fee take effect the same day. The case was suspended by the New Mexico Public Regulation Commission on Feb. 14 and ultimately rejected without prejudice — meaning NMWSC could file the request again — on March 7.

According to documents on the PRC’s online case portal, the utility company resubmitted its application for a fee revision on Friday, April 18.

The PRC rejected the January application for three reasons — because the new fee was proposed to take effect on the date the request was filed, the notice did not include direct testimony or supporting exhibits and because NMWSC failed to send a copy of the notice to ratepayers and be published, as per PRC rules.

Both applications were for new connection fees — rates, charges or fees for existing sewer customers will remain the same.

As of Tuesday, May 6, a public hearing for NMWSC’s application — case No. 25-00035-UT — has not been added to the commission’s online hearing calendar.

Sewer connection fees for NMWSC are based on the meter size, which ranges from 5/8 of an inch to 8 inches. The current fee for a 5/8 inch meter is $866, with a proposed increase to $11,688, a 1,250 percent increase. The next size up, 3/4 of an inch, would go from $1,329 to $17,532. The largest meter, 8 inches, is currently subject to a $70,880 connection fee. A proposed 1,219 percent increase would put it at $935,040.

Local real estate developer Nick Blea was shocked when he heard the proposed connection fees, saying he is strongly opposed to the sharp increase for new sewer connections proposed by NMWSC.

“Especially for services where infrastructure is already in place. To put in a connection for $866, OK, but for almost $12,000? My God,” Blea said. “And what about someone looking at resale, who wants to get off septic?”

During the April 28 city council meeting, Rio Communities City Manager Marty Moore told councilors there are about 500 homes in the city that use septic systems, rather than the NMWSC sewer system.

In October, Blea and his business partners broke ground on the 67-house Vista del Monte subdivision near Nancy Lopez and Lee Trevino boulevards, southeast of the Tierra del Sol Golf Club in Rio Communities.

“With the cost of building houses right now over $225 a square foot, to add another $11,000 you won’t see houses less than $300,000, closer to $400,000,” he said. “This is going to stifle developers ... in the near future. What’s the alternative? Not to connect?”

According to its application, the company serves about 2,744 wastewater customers and has 240 pending requests by three different developers for new residential connections to the Rio del Oro Wastewater Treatment Plant.

An assessment of the plant by Water Works Engineers recommended $2.8 million in improvements to the plant for those pending connection requests, resulting in the new charge of $11,688 per connection.

The Water Works assessment also recommended an additional $2.8 million in improvements for existing customers and $5.8 million for projected development through 2030.

Due to a specific PRC rule — Rule 19 — Moore said the company can charge new customers the proposed connection fee increase while it waits for the Public Regulations Commission to make its final decision.

Moore recommended the city work to establish its own water and wastewater system, saying a number of developers and builders, who have expressed interest and already bought land in the city, are being cautious, holding off starting to build due to the costs NMWSC is imposing for hookups.

“With those kinds of issues in mind, what is the city going to do about it?” Moore asked. “New Mexico Water Service Company is a private company ... and its under a franchise agreement (with the city), but it’s not exclusive.”

Moore said in the city of Elephant Butte, where NMWSC has a water system, about one-third of customers are with the city-formed utility and wastewater treatment facility. In talking with the New Mexico Finance Authority, the city manager was advised to acquire a grant for planning and design for a water and/or wastewater infrastructure.

“I highly, highly, highly recommend that we do this,” he said. “If we sit and wait ... we will be held hostage by a private company, that has shown publicly it is unwilling to bend.”

At the May 5 special meeting, Moore walked that sentiment back somewhat, saying NMWSC has signaled a willingness to bring its corporate partners into discussions with the city.

Moore said forming its own system would benefit the city on both an economic and housing development standpoint.

“We think, as a city, we need to do something. It would help us greatly to put some pressure if we’re at a point where we’re going into negotiations with the company,” Moore said.

The city manager said while NMWSC has been good to work with over the years, the city needs to plan for the future and put the business side and quality of life of residents first. He said a new system might also draw more residents and businesses into Rio Communities.

“This would take a lot of time and effort, and there has been a lot of soul searching on the part of your city manager to bring this to you today,” he said. “I think we need to do something about this. We need to draw a line in the sand and think about our future.”

Moore said he and staff will start searching for state grant opportunities, saying the project would come to fruition with a lot of effort, acquiring water rights, and a lot of money.

At the same time, he encourages the governing body and residents to voice their concerns to the members of the PRC, and make sure they go on record with NMWSC’s request to increase connection fees.

Rio Communities Councilor Art Apodaca said he believes NM Water Service Co.’s decision will “kill many economic development opportunities.”

“This is a real serious issue for the city, especially this unreasonable increase,” Apodaca said. “We have to have a seat at the table — more than as an interested party, but as a municipality.”

Apodaca also suggested the city keep the local legislators informed and encourage them to work together to bring a reasonable solution.

Councilor Tom Nelson said he is willing to meet with NM Water and the PRC, saying the issue was “near and dear to me.”

“I think the whole council should draft a letter detailing our opposition (to the fee increase),” Nelson said. “This letter needs to be done sooner than later. We need to look at our own wastewater and water treatment plant.”

Councilor Matthew Marquez said he’s been warning people about this for a year and a half, even while campaigning for office.

“I don’t want us to send a message that we’re just doing our own water,” Marquez said. “I don’t want them to think we’re bluffing. I hope we can push forward as a city.”

“It’s no bluff,” Moore said.

Rio Communities Mayor Joshua Ramsell said it’s important to have the newly-proposed water and wastewater system on the city’s new Infrastructure Capital Improvement Plan, which is a list of priorities the municipality sends to the New Mexico Legislature for funding.

“As residents, we want clean, healthy water,” Ramsell said. “Obviously, it is critical to life, especially in the desert. This is our ability to grow, and it’s very important.”

The council unanimously approved a motion Monday, April 28, to pursue funding opportunities for planning and design of water and wastewater infrastructure in the city of Rio Communities.