Friday, January 14, 2000

Albuquerque, NM Tries to
Municipalize Water System

...But Support Fades

By Olivier Uyttebrouck
Journal Staff Writer
Four of Albuquerque's nine councilors expressed opposition this week to the city's plan to buy New Mexico Utilities.
Meanwhile, an official of California-based Southwest Water Co., which owns New Mexico Utilities, said the company is lukewarm about selling the business to Albuquerque.
"If it goes away, we will not be unhappy," said Peter Moerbeek, chief financial officer of Southwest Water Co.
He also said the company is likely to want a higher price for New Mexico Utilities than the $29.5 million negotiated 14 months ago. He declined to estimate a new figure.
Supporters of the purchase say city ownership of New Mexico Utilities would help protect the aquifer and assure the city's water supply by better controlling housing and commercial growth on the West Side.
"It's about managing the aquifer, managing the resource," said Lawrence Rael, the city's chief administrative officer. "We're spending millions and millions to preserve the aquifer and we have a for-profit utility pumping it away."
New Mexico Utilities provides water and sewer service to about 7,000 West Side homes. It grew 17 percent in 1999, adding about 1,000 new households in some of Albuquerque's fastest growing West Side subdivisions, including Ventana Ranch and Paradise Hills.
Several councilors said they don't like the idea of the city buying a private company.
"The government takeover of private utilities didn't work in Moscow, didn't work in East Berlin, isn't working in Havana, and I don't think it will work in Albuquerque," said newly elected Councilor Greg Payne.
Councilors Michael Brasher and Mike McEntee previously fought the deal and remain opposed.
Hess Yntema, also recently elected, said he is "against the city buying private companies." He said he would be inclined to vote against the purchase, but would consider arguments favoring the deal.
Brasher, McEntee and then-Councilor Sam Bregman opposed the deal in November 1998 when councilors voted 6-3 to enter an agreement to buy New Mexico Utilities for $29.5 million. The agreement, which required further negotiation, would settle a condemnation lawsuit filed by the city.
Support for the purchase appears weaker this year as a consequence of the Oct. 5 election. Two of the city's three new councilors, Payne and Yntema, are among the opponents. The third new member, Brad Winter, said this week he isn't familiar with the proposal and doesn't know whether he would support it.
Councilors Alan Armijo, Vince Griego, Adele Hundley and Tim Kline, voted in favor of the deal, along with then-councilors Ruth Adams and Tim Cummins.
Armijo said he still favors the purchase. Griego could not be reached for comment.
Hundley and Kline said they would have to reconsider the deal, which has received little attention from the council in more than a year.
But Hundley said city ownership of New Mexico Utilities would benefit the city.
"People really don't want to think about the time when we don't have water," said Hundley. "My experience is, if you can buy water rights, you don't turn that down."
New Mexico Utilities has state permission to pump up to 10,000 acre feet a year, though it now pumps about 6,000 acre feet.
Rael said City Council support for the purchase would be required, but "the support may not be there."
One hurdle is an agreement between New Mexico Utilities and investors in the proposed Quail Ranch development, formerly known as Black Ranch. Developer John Black wants to turn his family's ranch on the West Mesa into a planned community that could one day house up to 50,000 people.
The agreement obligates New Mexico Utilities to provide the development's water and waste water needs to the extent of the utility's ability to provide water, Moerbeek said. Southwest Water officials want the city and developers to free Southwest Water from any legal obligation to provide water should the city buy the utility, he said.
Developers want Albuquerque to guarantee water and waste water service, but city officials don't want to promise an unlimited supply of water to Quail Ranch, he said.
The city has not reached an agreement with developers, Rael said.