Ruidoso sees substantial progress in reducing water leaks

• Nearly 75 million fewer gallons of water processed as leaks are eliminated

The village is moving ahead on the sale of $1.5 million more bonds designated for water system improvements.

But after the vote approving the ordinance that authorized the sale, Ruidoso Councilor John Cornelius posed a key question. After spending millions of dollars on tracking down and eliminating water line leaks and replacing old lines, “how are we doing?” he asked.

The answer was pretty well.

Ruidoso water rights/conservation specialist Eric Boyda said he prepared an audit of water put into the system and water sold for 2017 versus 2016, and “we put 74.89 million gallons less into our distribution system,” he said. “That’s without any reduction in water sales. It’s attributable to the projects (Water distribution director) Adam Sanchez has chosen for water line replacement. It’s like most of this water was from system leaks.

“It’s a little bit more than 10 percent of the water we normally put into our system, so that’s a savings in water. If you relate that to the amount of water we lease or have applications to lease, that’s about 67 percent of our water leases, so we are making some pretty substantial progress and hopefully, we won’t have to lease water in next five to 10 years.”

Water sales are a little bit higher, despite putting in 75 million gallons less, he said.

“Adam has really focused in on the areas in the worst shape and that’s why we had such an immediate drop,” Boyda said. The decrease also probably is tied to new automated meters installed on residential and commercial accounts, he said.

Asked if the village is nearing an end to projects related to leaks, Boyda said the end “is way out.”

“It will be an ongoing thing, but we are on track.”

Delays mostly are tied to compliance with state and federal regulations, he said.

Village Finance Director Judy Starkovich said the general obligation bond sale will be the fourth since March 2014. Voters next March will be asked to authorize another $3 million in bonds by continuing the same property, she said.

Mark Valenzuela, financial advisor to the village, said in preparation for council approval of the bond ordinance, he sent out proposals to local banks and potential investors. He received quotes from three banks and from the New Mexico Finance Authority, which offered the best price at 1.94 percent for a 10-year transaction.

That means over the 10-year period, the village would pay $117,000 in interest for a total payoff of $1.617 million for borrowing $1.5 million.

“That’s very strong and positive for the community,” Valenzuela said. “All of the four deals we have done financing for have been under 2 percent, which I think is strong. The bond rating of the community is double A- and for a community this size in New Mexico, it is one of the highest in the state.

Katherine Creagan with the Modrall Sperling law firm said this is the second installment approved by the 2016 election. Sold to the New Mexico Finance Authority, the bonds could not be paid off ahead of time, in part because of the shorter maturity, she said.

In March 2014, voters approved a 1.5 mill levy of property taxes, also called ad valorem taxes, to be restricted to improvements to the water system. On mill equates to $1 for each $1,000 of taxable property value. In New Mexico, taxable value runs at about one-third of market value.

The revenue source carries a debt capacity of $3 million of general obligation bonds every two years. The mill levy was renewed by voters in March 2016, providing for an additional $3 million and will be up for renewal again in March 2018.