The Utilities Board of Commissioners recently voted 6 to 1 to recommend a budget increase of $3.8 million to be phased-in over three years. Under the proposal, the average residential water customer would pay an additional $2.25 per month the first year, $1.78 more per month the second year, and another $1.97 monthly in year three.
Las Cruces Utilities said it hasn’t raised water rates since 2009 and that the increases will go to salary raises, operating costs and capital improvement projects to replace aging infrastructure.
The utility said the increases are separate from development impact fees, which pay for new infrastructure. A 1995 City Council resolution mandates current water and wastewater customers pay a portion of the residential impact fee, totaling about $1,100 for each new home.
William Beerman, vice-chair of the city’s Capital Improvement Advisory Committee, said the fees harm current residents and shouldn’t go to support home developers.
“If the city is subsidizing developers and homebuilders with contributions from water bills, water bill revenues and also in other ways through providing financing and other assistance to the homebuilders, the city is becoming a partner with the developers and homebuilders and they’re competing with other residents who are trying to sell their own homes,” Beerman said.
Las Cruces Utilities Director Jorge Garcia said while impact fees are an anomaly, it’s not uncommon for current customers to pay for new infrastructure.
“So again, it's not uncommon for the current ratepayers or the rate base to fund capacity expansion of our utility and they recover the cost over time from the new customers that come in from that new development. So, that is very common," Garcia said. "The gentleman does not agree that that should be done at all, but that is fine. We could easily have no impact fees in water, wastewater and those utilities would have to fund its capacity expansion like any other private utility and probably 90 percent of the water, wastewater utilities in the country."
Garcia said there’s no set date to present the proposal to City Council. The Utility Customer Advisory Group is scheduled to review rates for water, wastewater, gas and solid waste over the next two to three years.