By Daniel J. Chacón, The Santa Fe New Mexican
A state fund that has helped finance dozens of water infrastructure projects around New Mexico since it was created nearly two decades ago is drying up.
The State Investment Council has been sounding the alarm for years, warning the so-called Water Trust Fund, which it manages, could be depleted within 15 years without an additional infusion of capital or a restructuring of its distribution requirements of $4 million a year.
“This fund is on a terminal path,” Charles Wollmann, the council’s director of communications, legislative and client relations, said Thursday. “It is going to die unless there are additional appropriations or it would have to slash its annual distribution.”
A windfall to the tune of a quarter of a billion dollars may be on the way.
Amid record revenue projections for state government, Senate Majority Leader Peter Wirth, D-Santa Fe, is sponsoring a bill that would appropriate $250 million from the general fund to the Water Trust Fund. His proposal cleared the Senate Conservation Committee on an 8-0 vote Thursday.
Asked whether there is a better long-term solution for the permanent fund, such as a tax or a fee, Wirth said after the hearing that while different revenue streams can always be considered, this year the state has a chance to do something with its large surplus.
“I do think finding a permanent recurring stream makes sense long term, but right now what’s being proposed is a one-time shot,” he added.
Jesse Roach, the city of Santa Fe’s Water Division director, said the city applies for money from the fund every year. Three of the city’s biggest water projects, including the rehabilitation of Nichols Reservoir and the Canyon Road Water Treatment Plant, have been recommended for award, he said.
“Altogether, that’s $7.8 million of grants and low-interest loans that would make those projects more feasible for us,” he said.
Roach called the fund “one of the more reliable sources of funding” the city can tap into.
“I think we’re not alone in being in a place where aging infrastructure is something that we’re concerned about and so being able to access those funds helps us continue to manage our assets and assure that we can supply water to meet the needs of our citizens,” he said.
Wirth said the fund was created with an initial appropriation of $40 million. The next year, in 2007, it received a legislative contribution of $15 million. Since then, no additional contributions have been made, he said.
“The current value of the fund is down to $41.26 million, so the investments haven’t been covering the distribution” of $4 million annually, Wirth said. “So this is a moment to use some of that nonrecurring money that we have to really make a statement about the importance of water.”
Sen. Antoinette Sedillo Lopez, D-Albuquerque, thanked Wirth for sponsoring the bill.
“I think water is going to be the biggest challenge facing New Mexico in the next decades,” she said.
Representatives from the Middle Rio Grande Conservancy District, the New Mexico Chamber of Commerce and Middle Rio Grande Water Advocates spoke in support of the bill, as did a lobbyist for the pueblos of Isleta, Ohkay Owingeh, Santa Clara, San Felipe and Zuni.
Wirth told his colleagues language in the state Constitution allows lawmakers to pass legislation to “potentially” use money from the fund for other water purposes.
“Essentially this effort would put a significant amount of new money into this fund and also allow us as a Legislature to potentially figure out other ways to use this fund for water moving forward,” he said.
Wirth said he is going to work hard “to get whatever we can into this fund.
“We’ve got this money,” he said. “Let’s use it in ways that are going to help us down the road. I just think when it comes to where we are as a state, this would send a very important signal about water and what we need to do on the water front.”
Follow Daniel J. Chacón on Twitter @danieljchacon.