ANNE WATKINS ANNE WATKINS Special Assistant to the State EngineerSpecial Assistant to the State Engineer

STATE-EPA SYMPOSIUM ON ENVIRONMENTAL INNOVATION AND STATE-EPA SYMPOSIUM ON ENVIRONMENTAL INNOVATION AND RESULTSRESULTS1/24/061/24/06

WATER PROJECT PLANNING and FINANCING

for SUSTAINABILITY

WATER RESOURCE WATER RESOURCE MANAGEMENT IN NEW MANAGEMENT IN NEW

MEXICOMEXICO STATE ENGINEER: water rights and adjudication STATE ENGINEER: water rights and adjudication Chairs Water Trust Board and Drought Task ForceChairs Water Trust Board and Drought Task Force

INTERSTATE STREAM COMMISSION: compacts, ESA on compacted INTERSTATE STREAM COMMISSION: compacts, ESA on compacted streams, regional and state water planningstreams, regional and state water planning

ENVIRONMENT DEPT: drinking water, waste water, surface water, ENVIRONMENT DEPT: drinking water, waste water, surface water, construction programsconstruction programs

ENERGY, MINERALS AND NATURAL RESOURCES DEPT: produced ENERGY, MINERALS AND NATURAL RESOURCES DEPT: produced water, game and fishwater, game and fish

FINANCE AND ADMINISTRATION DEPT: capital outlay, some grantsFINANCE AND ADMINISTRATION DEPT: capital outlay, some grants NEW MEXICO FINANCE AUTHORITY: grant and loan programs (incl NEW MEXICO FINANCE AUTHORITY: grant and loan programs (incl

DWRLF)DWRLF) MULTIPLE FORMS OF DRINKING WATER AND WASTE WATER MULTIPLE FORMS OF DRINKING WATER AND WASTE WATER

DELIVERY ENTITIES: local planning and fundingDELIVERY ENTITIES: local planning and funding SEVERAL FORMS OF AGRICULTURAL WATER PURVEYORS: irrigation SEVERAL FORMS OF AGRICULTURAL WATER PURVEYORS: irrigation

water, acequiaswater, acequias OTHER (flood control, watersheds, etc. etc. OTHER (flood control, watersheds, etc. etc. ETC!)ETC!)

THE VISIONTHE VISIONGOVERNOR BILL RICHARDSONGOVERNOR BILL RICHARDSON

“INVEST NEW MEXICO”“INVEST NEW MEXICO” Think locally but act regionally: Think locally but act regionally:

tie infrastructure investments to tie infrastructure investments to STATEWIDE vision and prioritiesSTATEWIDE vision and priorities

Build for the future: 2015-2025 Build for the future: 2015-2025 timeframe and innovations not timeframe and innovations not “dinosaurs”“dinosaurs”

Seek legislative, regulatory and Seek legislative, regulatory and administrative solutions to administrative solutions to market disincentives and under-market disincentives and under-pricingpricing

DEVELOP A COORDINATED, DEVELOP A COORDINATED, STRATEGIC, LONG RANGE STRATEGIC, LONG RANGE APPROACH TO INFRASTRUCTUREAPPROACH TO INFRASTRUCTURE

STRUCTURE FUNDING TO ENSURE STRUCTURE FUNDING TO ENSURE TIMELY PROJECT COMPLETIONTIMELY PROJECT COMPLETION

THE CHALLENGE Drought Strike Team: 70+ emergency calls Drought Strike Team: 70+ emergency calls

in 2003 but only 1 due to droughtin 2003 but only 1 due to drought Drought Task Force Drinking Water Work Drought Task Force Drinking Water Work

Group seeks solutions to avoid Group seeks solutions to avoid emergenciesemergencies

Water Trust Board gets few applications for Water Trust Board gets few applications for large regional water projectslarge regional water projects

Substantial amount of state funding goes Substantial amount of state funding goes to “fix” O&M failuresto “fix” O&M failures

No state mechanism for integrated regional No state mechanism for integrated regional planning or conditioning project fundingplanning or conditioning project funding

THE DIRECTIONTHE DIRECTION

Governor Richardson establishes WATER Governor Richardson establishes WATER INFRASTRUCTURE INVESTMENT TEAM INFRASTRUCTURE INVESTMENT TEAM (WIIT) through Executive Order to (WIIT) through Executive Order to “provide recommendations and advice “provide recommendations and advice regarding a long range for secure and regarding a long range for secure and sustainable water and waste water sustainable water and waste water infrastructure in New Mexico”infrastructure in New Mexico”

E.O. directs WIIT to establish Technical E.O. directs WIIT to establish Technical Team to “provide professional and Team to “provide professional and technical advice and support”technical advice and support”

WIITWIIT John D’Antonio, State Engineer, ChairJohn D’Antonio, State Engineer, Chair Dave Contarino, Governor’s Chief of StaffDave Contarino, Governor’s Chief of Staff James Jimenez, Secretary, DFAJames Jimenez, Secretary, DFA Ron Curry, Secretary, NMEDRon Curry, Secretary, NMED Joanna Prukop, Secretary, EMNRDJoanna Prukop, Secretary, EMNRD Steve Flance, Chair, NMFA BoardSteve Flance, Chair, NMFA Board Kim Rael, N.M. Board of FinanceKim Rael, N.M. Board of Finance

WATER WATER INFRASTRUCTURE INFRASTRUCTURE

TECHNICAL TEAM (TT)TECHNICAL TEAM (TT) OSE: Anne Watkins, Jim SizemoreOSE: Anne Watkins, Jim Sizemore NMED Construction Programs Bureau: Richard NMED Construction Programs Bureau: Richard

Rose, Andy Rose, Andy EdmundsonEdmundson NMED Drinking Water Bureau: Fernando Martinez, NMED Drinking Water Bureau: Fernando Martinez,

Retta Retta Prophet, Rob PineProphet, Rob Pine NMED Surface Water Bureau: Marcy LeavittNMED Surface Water Bureau: Marcy Leavitt DFA Capital Projects Unit: Robert ApodacaDFA Capital Projects Unit: Robert Apodaca DFA Local Govt. Division: Ken HughesDFA Local Govt. Division: Ken Hughes NMFA: Tom McHugh, Angela RodarteNMFA: Tom McHugh, Angela Rodarte RCAC: Blanca Surgeon, Ellen DrewRCAC: Blanca Surgeon, Ellen Drew EMNRD: Craig O’HareEMNRD: Craig O’Hare ENVIRONMENTAL FINANCE CENTER: Heather ENVIRONMENTAL FINANCE CENTER: Heather

HimmelbergerHimmelberger NM RURAL WATER ASSOCIATION: Matt HolmesNM RURAL WATER ASSOCIATION: Matt Holmes USDA RUS: Martha TorresUSDA RUS: Martha Torres

PUBLICWATER SYSTEMSInNEW MEXICO

DRINKING WATER DRINKING WATER PURVEYORSPURVEYORS

650 Public Water Systems in N.M. (of 650 Public Water Systems in N.M. (of 1350 total)1350 total) 27 w/ 3000+ connections27 w/ 3000+ connections 15 w/ 2000-3000 connections15 w/ 2000-3000 connections 25 w/ 1000-2000 connections25 w/ 1000-2000 connections 40 w/ 500-1000 connections40 w/ 500-1000 connections 500+ w/ <500 connections500+ w/ <500 connections

POPULATION SERVEDPOPULATION SERVED 1.1M1.1M (61%) served by systems with (61%) served by systems with

>3000 connections>3000 connections

315K 315K (18%) served by systems with(18%) served by systems with500-3000 connections500-3000 connections

364K 364K (21%) served by systems with (21%) served by systems with<500 connections<500 connections

95% of N.M. DRINKING WATER 95% of N.M. DRINKING WATER SYSTEMS SERVE <500 PEOPLE!SYSTEMS SERVE <500 PEOPLE!

Drinking Water Systems Drinking Water Systems at Riskat Risk

Aging infrastructureAging infrastructure Limited Expansion CapacityLimited Expansion Capacity Safe Drinking Water Act complianceSafe Drinking Water Act compliance Water rightsWater rights Water supply availabilityWater supply availability Managerial and technical demandsManagerial and technical demands Volunteer boardsVolunteer boards Planning capacityPlanning capacity Infrastructure fundingInfrastructure funding

THE NEW APPROACHTHE NEW APPROACH Set standards for sound business Set standards for sound business

practices, conservation and efficiencypractices, conservation and efficiency Provide “free and easy” technical Provide “free and easy” technical

support to help water and waste water support to help water and waste water systems meet those standardssystems meet those standards

Enforce statutory and regulatory Enforce statutory and regulatory compliancecompliance

Provide incentives by prioritizing grants Provide incentives by prioritizing grants and zero-interest loans to systems that and zero-interest loans to systems that meet the standardsmeet the standards

THE RECOMMENDATION

TEN CRITERIA for SOUND MANAGEMENT and

SUSTAINABILITY

TEN ADDITIONAL

RECOMMENDATIONS

CRITERIA #1CRITERIA #1 FINANCIAL PLANFINANCIAL PLAN

5 YEAR5 YEAR COMPLETE REVENUE PICTURECOMPLETE REVENUE PICTURE COMPLETE O&M BUDGET COMPLETE O&M BUDGET PAYMENT INTO CASH RESERVE ACCOUNTSPAYMENT INTO CASH RESERVE ACCOUNTS AUDITABLE FORMATAUDITABLE FORMAT

NOTE: PILOT PROJECT WILL ESTABLISH NOTE: PILOT PROJECT WILL ESTABLISH STANDARDSTANDARD

AND DEVELOP IMPLEMENTATION MANUAL!AND DEVELOP IMPLEMENTATION MANUAL!

CRITERIA #2CRITERIA #2

FULLY ALLOCATED RATE STRUCTUREFULLY ALLOCATED RATE STRUCTURE

COMPONENT OF FINANCIAL PLANCOMPONENT OF FINANCIAL PLAN FUNDS FIXED AND VARIABLE O&M COSTS FUNDS FIXED AND VARIABLE O&M COSTS FUNDS REGULATORY COMPLIANCEFUNDS REGULATORY COMPLIANCE FUNDS CAPITAL IMPROVEMENT FUND FUNDS CAPITAL IMPROVEMENT FUND IS TIERED TO ENCOURAGE CONSERVATIONIS TIERED TO ENCOURAGE CONSERVATION

CRITERIA #3CRITERIA #3 ASSET MANAGEMENT PLANASSET MANAGEMENT PLAN

COMPLETE ASSET REGISTERCOMPLETE ASSET REGISTER DEFINED LEVEL OF SERVICE TO MEET DEFINED LEVEL OF SERVICE TO MEET

REGULATORY AND CUSTOMER DEMANDSREGULATORY AND CUSTOMER DEMANDS RISK ANALYSIS FOR ASSETSRISK ANALYSIS FOR ASSETS O&M AND CIP PLANSO&M AND CIP PLANS METERING AND MEASURING PLANMETERING AND MEASURING PLAN

NOTE: PILOT PROJECT WILL ESTABLISH NOTE: PILOT PROJECT WILL ESTABLISH STANDARD STANDARD

AND DEVELOP IMPLEMENTATION MANUAL!AND DEVELOP IMPLEMENTATION MANUAL!

CRITERIA #4CRITERIA #4 WATER USE ACCOUNTING SYSTEMWATER USE ACCOUNTING SYSTEM

TOOL TO QUANTIFY: TOOL TO QUANTIFY: AUTHORIZED BILLED AND UNBILLED USAGEAUTHORIZED BILLED AND UNBILLED USAGE UNAUTHORIZED USE FOR ELIMINATIONUNAUTHORIZED USE FOR ELIMINATION WATER LOSS TO LEAKAGE FOR REPAIRSWATER LOSS TO LEAKAGE FOR REPAIRS WATER USAGE BY CUSTOMER CATEGORIESWATER USAGE BY CUSTOMER CATEGORIES

QUANTIFIES SUPPLY AND DEMAND PROJECTIONS FOR QUANTIFIES SUPPLY AND DEMAND PROJECTIONS FOR PLANNINGPLANNING

BASIS FOR CONSERVATION TARGETS AND GOALSBASIS FOR CONSERVATION TARGETS AND GOALS REQUIRES METERING OF ALL USESREQUIRES METERING OF ALL USES TO OPTIMIZE WATER SYSTEM EFFICIENCYTO OPTIMIZE WATER SYSTEM EFFICIENCY

NOTE: PILOT PROJECT WILL ESTABLISH NOTE: PILOT PROJECT WILL ESTABLISH STANDARD STANDARD

AND DEVELOP IMPLEMENTATION MANUAL!AND DEVELOP IMPLEMENTATION MANUAL!

CRITERIA #5CRITERIA #5

COMPLIANCE WITH OSE REGULATIONSCOMPLIANCE WITH OSE REGULATIONS

SUFFICIENT WATER RIGHTSSUFFICIENT WATER RIGHTS PERMITS IN ORDERPERMITS IN ORDER REPORTING REQUIREMENTS METREPORTING REQUIREMENTS MET

CRITERIA #6CRITERIA #6

COMPLIANCE WITH SDWA, CWA, NMED COMPLIANCE WITH SDWA, CWA, NMED REGULATIONSREGULATIONS QUALITY MONITORIING AND REPORTINGQUALITY MONITORIING AND REPORTING CERTIFIED OPERATOR(S)CERTIFIED OPERATOR(S) PERMITS IN ORDERPERMITS IN ORDER

NOTE: 20% of water systems have quality violationsNOTE: 20% of water systems have quality violations NOTE: 40% of water systems do not have certified NOTE: 40% of water systems do not have certified operatorsoperators NOTE: 5% of water systems have chronic violationsNOTE: 5% of water systems have chronic violations

ESTIMATES FROM NMEDESTIMATES FROM NMED

CRITERIA #7CRITERIA #7 ADEQUATE GOVERNANCE STRUCTUREADEQUATE GOVERNANCE STRUCTURE

ARTICLES, BY-LAWS ON FILEARTICLES, BY-LAWS ON FILE BOARD ELECTIONS REGULAR AND MEMBERS BOARD ELECTIONS REGULAR AND MEMBERS

TRAINEDTRAINED COMPLIANCE WITH OPEN MEETINGS, PUBLIC COMPLIANCE WITH OPEN MEETINGS, PUBLIC

RECORDS, AND AUDIT ACTSRECORDS, AND AUDIT ACTS INTERNAL CONTROL POLICIES AND INTERNAL CONTROL POLICIES AND

PROCEDURESPROCEDURES BILLING, NEW SERVICE, FAILURE TO PAY, BILLING, NEW SERVICE, FAILURE TO PAY,

AND OTHER POLICIES IN PLACEAND OTHER POLICIES IN PLACE BUSINESS MANAGEMENT TOOLS PART OF BUSINESS MANAGEMENT TOOLS PART OF

DOING BUSINESSDOING BUSINESS

CRITERIA #8CRITERIA #8 PLANNING FOR INFRASTRUCTURE AND PLANNING FOR INFRASTRUCTURE AND

OPERATIONSOPERATIONS

FULL INFRASTRUCTURE SCOPINGFULL INFRASTRUCTURE SCOPING PROJECT ELEMENT P.E.R. FOR BEST PROJECT ELEMENT P.E.R. FOR BEST

TECHNICAL AND ENGINEERING APPROACHTECHNICAL AND ENGINEERING APPROACH INTEGRATED APPROACH TO WATER AND INTEGRATED APPROACH TO WATER AND

WASTE WASTE WATER SERVICEWATER SERVICE O&M PLAN TO INSURE INFRASTRUCTURE O&M PLAN TO INSURE INFRASTRUCTURE

LOGEVITY REQUIREDLOGEVITY REQUIRED

CRITERIA #9CRITERIA #9 REGIONAL COLLABORATIONREGIONAL COLLABORATION

FOR EFFICIENT MANAGEMENT OF FOR EFFICIENT MANAGEMENT OF SHARED RESOURCESHARED RESOURCE

FOR SHARED PROTECTION OF SOURCE FOR SHARED PROTECTION OF SOURCE WATER QUALITYWATER QUALITY

FOR ECONOMIES OF SCALEFOR ECONOMIES OF SCALE FOR “FULL WATER CYCLE PLANNING” FOR “FULL WATER CYCLE PLANNING”

FOR AREAFOR AREA

CRITERIA #10CRITERIA #10

ENERGY EFFICIENCY STRATEGYENERGY EFFICIENCY STRATEGY

TO DECREASE OPERATIONAL COSTSTO DECREASE OPERATIONAL COSTS TO DESIGN EFFICIENT INFRASTRUCTURETO DESIGN EFFICIENT INFRASTRUCTURE INCLUDES CONSERVATIONINCLUDES CONSERVATION

REGIONALIZATION DEFINEDREGIONALIZATION DEFINEDCOLLABORATION COLLABORATION AMONG GEOGRAPHICALLY PROXIMATE AMONG GEOGRAPHICALLY PROXIMATE

WATER SYSTEMS WHICH SHARE THE SAME WATER RESOURCE WATER SYSTEMS WHICH SHARE THE SAME WATER RESOURCE FOR THE PURPOSE OF:FOR THE PURPOSE OF:

● ● IMPROVING EFFICIENCY OF MANAGEMENT, IMPROVING EFFICIENCY OF MANAGEMENT, ADMINISTRATION AND OPERATIONSADMINISTRATION AND OPERATIONS

●●REALIZING ECONOMIES OF SCALE FOR TREATMENT, REALIZING ECONOMIES OF SCALE FOR TREATMENT, ADMINISTRATION, AND MANGEMENTADMINISTRATION, AND MANGEMENT

●●SIZING SYSTEMS TO SUPPORT NEW TECHNOLOGIESSIZING SYSTEMS TO SUPPORT NEW TECHNOLOGIES (DESAL, ASR, REUSE)(DESAL, ASR, REUSE)

● “● “TOTAL WATER CYCLE” APPROACH THAT INTEGRATES TOTAL WATER CYCLE” APPROACH THAT INTEGRATES DRINKING WATER and WASTE WATERDRINKING WATER and WASTE WATER●●OPTIMIZING INFRASTRUCTURE DEVELOPMENT OPTIMIZING INFRASTRUCTURE DEVELOPMENT

THROUGH COMPREHENSIVE INTEGRATED THROUGH COMPREHENSIVE INTEGRATED PLANNING PLANNING AND FUNDINGAND FUNDING

● ● IMPROVE FINANCING EFFICIENCIES and ATTRACTIMPROVE FINANCING EFFICIENCIES and ATTRACTPRIVATE SECTOR INVESTMENTPRIVATE SECTOR INVESTMENT

REGIONAL COLLABORATION REGIONAL COLLABORATION OPTIONS:OPTIONS:

* * plan togetherplan together

* emergency-only working relationship* emergency-only working relationship

* share inventory/equipment* share inventory/equipment

* share operator* share operator

* share administrative tasks (ex: billing)* share administrative tasks (ex: billing)

* share management* share management

* interconnect physical system for backup* interconnect physical system for backup

* share water rights/resources w/out system * share water rights/resources w/out system connectionconnection

* interconnect systems but operate individually* interconnect systems but operate individually

* * dissolve current systems, form new entitydissolve current systems, form new entity

REGIONALIZATION VISIONREGIONALIZATION VISION Convene ALL water purveyors and users: public and Convene ALL water purveyors and users: public and

private, drinking and agricultural, acequias, private, drinking and agricultural, acequias, conservancy and irrigation, industrial and conservancy and irrigation, industrial and commercialcommercial

Involve local governments: municipality, county, Involve local governments: municipality, county, special districtsspecial districts

Include nations, tribes, pueblosInclude nations, tribes, pueblos Include agency partners (state, federal)Include agency partners (state, federal) Include water-related entities (ex: SWCDs)Include water-related entities (ex: SWCDs)

WATER IS EVERYONE’S ISSUE—WATER IS EVERYONE’S ISSUE—AND EVERYONE HAS A ROLE!AND EVERYONE HAS A ROLE!

RECOMMENDATIONSRECOMMENDATIONS1.1. SET STANDARDS!SET STANDARDS!2.2. REVISE STATUTES!REVISE STATUTES!3.3. FREE TECHNICAL ASSISTANCE!FREE TECHNICAL ASSISTANCE!4.4. PACKAGE FUNDING AS GRANT/LOAN COMBO!PACKAGE FUNDING AS GRANT/LOAN COMBO!5.5. IMPROVE PROJECT PLANNING—EMPHASIZE IMPROVE PROJECT PLANNING—EMPHASIZE

REGIONALIZATION!REGIONALIZATION!6.6. ESTABLISH STATE PLANNING ENTITY!ESTABLISH STATE PLANNING ENTITY!7.7. METER ALL USES!METER ALL USES!8.8. MANDATE SEPTIC MANAGEMENT AND/OR MANDATE SEPTIC MANAGEMENT AND/OR

WASTE WATER TREATMENT!WASTE WATER TREATMENT!9.9. REQUIRE CONSTRUCTION OVERSIGHT!REQUIRE CONSTRUCTION OVERSIGHT!10.10. CREATE COMMUNITY COLLEGE TRAINING CREATE COMMUNITY COLLEGE TRAINING

PROGRAMS!PROGRAMS!

TEN CRITERIA TEN CRITERIA andand

TEN RECOMMENDATIONSTEN RECOMMENDATIONS

GOALSGOALS

PROTECT PUBLIC HEALTHPROTECT PUBLIC HEALTH SUPPORT ECONOMIC DEVELOPMENT & SUPPORT ECONOMIC DEVELOPMENT &

VITALITYVITALITY PROTECT WATER QUALITY PROTECT WATER QUALITY STRATEGIC DEVELOPMENT OF 21STRATEGIC DEVELOPMENT OF 21STST CENTURY CENTURY

WATER/WASTE WATER INFRASTRUCTUREWATER/WASTE WATER INFRASTRUCTURE MANAGE ASSETS MANAGE ASSETS PROMOTE CONSERVATION AND EFFICIENCYPROMOTE CONSERVATION AND EFFICIENCY FISCAL AND HYDROLOGIC SUSTAINABILITYFISCAL AND HYDROLOGIC SUSTAINABILITY

INVEST WISELY AND INVEST WISELY AND STRATEGICALLY!!!STRATEGICALLY!!!

““We cannot solve our We cannot solve our problems with the problems with the same thinking we same thinking we used when we used when we created them.”created them.”