Eldorado water and sanitation mishandled

Lucian Niemeyer and John Hawkins |

5/11/2008 - 5/11/08

The Eldorado Area Water and Sanitation District is a semi-municipal water district formed four years ago to buy and run the utility in the Eldorado area of Santa Fe County.

Prior to its condemnation, the original water company had been offered to the residents for a price of
$2.5 million. Through a long and difficult process fraught with incompetency, the community ended up paying about $12 million, which was financed with bonds at a high rate.

Since the purchase, the Eldorado Area Water and Sanitation District has staffed and run the utility as incompetently as it handled the purchase. The original water company spent $849,000 per year to run the utility. The current management spends $2.1 million a year to run the same company.

Purchase decisions reflect the same ineptitude. Original professional engineering estimates for a new well with connections was approximately $500,000. Decisions to award contracts of close to $1 million were awarded, and we acquired a new well with a major construction defect.

Meanwhile, available to the board were three wells with similar water flows, already installed, which cost and renovation would be a fraction of the original $500,000.

The board, to pay for their incompetency has determined to raise the rates from 35 percent to more than 50 percent to the different rate payers. The standard answer to the "cut costs" question is that "we need more money."

The utility water rates are already the highest in the New Mexico. Subsequently a group of rate payers determined to investigate the water board operations. What this group found was a totally incompetent management structure and a totally inept board of directors. It found that expenses could be reduced by over $500,00 annually paying for all the capital projects needed for years in the future. What it found was an organization that could not perform to deliver water, with good customer relations, at a reasonable price. We also found that a rate increase is not necessary and will only perpetuate the bad management, precisely our fears when discussion was made to take over the water system.

The purchase of the water company from the developer was predicated on the premise that a community-owned water company would provide water at a better rate and with better services then a privately owned for-profit company. The acquiring of the water system by Eldorado Area Water and Sanitation District has proved just the opposite.

Let us hope that the Public Regulation Commission comes to the same conclusion when it meets in May to review the rate increase. In January, there will be an election for four members of the five member Eldorado Area Water and Sanitation District board. We will ask the rate payers to vote in this important election.

Lucian Niemeyer and John Hawkins are residents of Eldorado and ratepayers to the water and sanitation district.