Questa considers raising water rates to reduce loan burden

By Cody Hooks
chooks@taosnews.com
Posted 4/11/19

When the Questa water system went down in 2016, the village had some money in reserves but also had to take out an emergency loan.In order potentially to have the loan …

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Questa considers raising water rates to reduce loan burden

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When the Questa water system went down in 2016, the village had some money in reserves but also had to take out an emergency loan.

In order potentially to have the loan forgiven, and provide long-term stability for the water system, the village council commissioned a study about the most efficient way to raise rates on water customers while not subjecting the community to ballooning charges.

The system supplies water to 689 residential and 76 commercial customers, with revenue from 2017 totaling $235,978. That revenue just covers the operating expenses for the system, according to Questa Village Administrator Nicholas Maestas.

Raising rates would not only help the village make a case to have the $71,792 loan forgiven, but would also provide a cushion for future emergencies, upgrades to the water system and the hiring of another water operator, according to the report.

The village has paid $7,198 toward the emergency loan so far.

"The [New Mexico State Board of Finance] asked us to look at rates" specifically for loan forgiveness, said Mayor Mark Gallegos. But, he added, the village is "due to prove better quality service."

The study, completed by the University of New Mexico's Southwest Environmental Finance Center, was presented at the March 12 village council meeting. The report included six different scenarios for raising rates.

One option is no change to rates, while others included increasing the monthly base charges, increasing the overage rates, or mixing several of the options to offset the "sticker shock" to consumers.

"This is something we need to take a serious look at," said councilor Louise Gallegos.

"The village should look at rates annually and to look at the operational needs. Sometimes we don't raise rates, but sometimes we have to to meet the rising costs," said Village Councilor Brent Jaramillo, who was not at the March meeting.

By early April, the village had not scheduled either a work-study session or a formal vote on the matter.

A different pool of money, specifically from the Department of Housing and Urban Development's Community Development Block Grant, will go toward water line improvements along Cabresto Road.

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