1. ANNE WATKINS Special Assistant to the State Engineer STATE-EPA SYMPOSIUM ON ENVIRONMENTAL INNOVATION AND RESULTS 1/24/06 WATER PROJECT PLANNING and FINANCING for SUSTAINABILITY

2. WATER RESOURCE MANAGEMENT IN NEW MEXICO STATE ENGINEER: water rights and adjudication STATE ENGINEER: water rights and adjudication Chairs Water Trust Board and Drought Task Force INTERSTATE STREAM COMMISSION: compacts, ESA on compacted streams, regional and state water planning INTERSTATE STREAM COMMISSION: compacts, ESA on compacted streams, regional and state water planning ENVIRONMENT DEPT: drinking water, waste water, surface water, construction programs ENVIRONMENT DEPT: drinking water, waste water, surface water, construction programs ENERGY, MINERALS AND NATURAL RESOURCES DEPT: produced water, game and fish ENERGY, MINERALS AND NATURAL RESOURCES DEPT: produced water, game and fish FINANCE AND ADMINISTRATION DEPT: capital outlay, some grants FINANCE AND ADMINISTRATION DEPT: capital outlay, some grants NEW MEXICO FINANCE AUTHORITY: grant and loan programs (incl DWRLF) NEW MEXICO FINANCE AUTHORITY: grant and loan programs (incl DWRLF) MULTIPLE FORMS OF DRINKING WATER AND WASTE WATER DELIVERY ENTITIES: local planning and funding MULTIPLE FORMS OF DRINKING WATER AND WASTE WATER DELIVERY ENTITIES: local planning and funding SEVERAL FORMS OF AGRICULTURAL WATER PURVEYORS: irrigation water, acequias SEVERAL FORMS OF AGRICULTURAL WATER PURVEYORS: irrigation water, acequias OTHER (flood control, watersheds, etc. etc. ETC!) OTHER (flood control, watersheds, etc. etc. ETC!)

3. THE VISION GOVERNOR BILL RICHARDSON “INVEST NEW MEXICO” Think locally but act regionally: tie infrastructure investments to STATEWIDE vision and priorities Think locally but act regionally: tie infrastructure investments to STATEWIDE vision and priorities Build for the future: 2015-2025 timeframe and innovations not “dinosaurs” Build for the future: 2015-2025 timeframe and innovations not “dinosaurs” Seek legislative, regulatory and administrative solutions to market disincentives and under- pricing Seek legislative, regulatory and administrative solutions to market disincentives and under- pricing DEVELOP A COORDINATED, STRATEGIC, LONG RANGE APPROACH TO INFRASTRUCTURE DEVELOP A COORDINATED, STRATEGIC, LONG RANGE APPROACH TO INFRASTRUCTURE STRUCTURE FUNDING TO ENSURE TIMELY PROJECT COMPLETION STRUCTURE FUNDING TO ENSURE TIMELY PROJECT COMPLETION

4. THE CHALLENGE  Drought Strike Team: 70+ emergency calls in 2003 but only 1 due to drought  Drought Task Force Drinking Water Work Group seeks solutions to avoid emergencies  Water Trust Board gets few applications for large regional water projects  Substantial amount of state funding goes to “fix” O&M failures  No state mechanism for integrated regional planning or conditioning project funding

5. THE DIRECTION  Governor Richardson establishes WATER INFRASTRUCTURE INVESTMENT TEAM (WIIT) through Executive Order to “provide recommendations and advice regarding a long range for secure and sustainable water and waste water infrastructure in New Mexico”  E.O. directs WIIT to establish Technical Team to “provide professional and technical advice and support”

6. WIIT  John D’Antonio, State Engineer, Chair  Dave Contarino, Governor’s Chief of Staff  James Jimenez, Secretary, DFA  Ron Curry, Secretary, NMED  Joanna Prukop, Secretary, EMNRD  Steve Flance, Chair, NMFA Board  Kim Rael, N.M. Board of Finance

7. WATER INFRASTRUCTURE TECHNICAL TEAM (TT)  OSE: Anne Watkins, Jim Sizemore  NMED Construction Programs Bureau: Richard Rose, Andy Edmundson  NMED Drinking Water Bureau: Fernando Martinez, Retta Prophet, Rob Pine  NMED Surface Water Bureau: Marcy Leavitt  DFA Capital Projects Unit: Robert Apodaca  DFA Local Govt. Division: Ken Hughes  NMFA: Tom McHugh, Angela Rodarte  RCAC: Blanca Surgeon, Ellen Drew  EMNRD: Craig O’Hare  ENVIRONMENTAL FINANCE CENTER: Heather Himmelberger  NM RURAL WATER ASSOCIATION: Matt Holmes  USDA RUS: Martha Torres

8. PUBLIC WATER SYSTEMS In NEW MEXICO

9. DRINKING WATER PURVEYORS  650 Public Water Systems in N.M. (of 1350 total)  27 w/ 3000+ connections  15 w/ 2000-3000 connections  25 w/ 1000-2000 connections  40 w/ 500-1000 connections  500+ w/ <500 connections

10. POPULATION SERVED  1.1M(61%) served by systems with >3000 connections  315K (18%) served by systems with 500-3000 connections  364K (21%) served by systems with <500 connections 95% of N.M. DRINKING WATER SYSTEMS SERVE <500 PEOPLE!

11. Drinking Water Systems at Risk  Aging infrastructure  Limited Expansion Capacity  Safe Drinking Water Act compliance  Water rights  Water supply availability  Managerial and technical demands  Volunteer boards  Planning capacity  Infrastructure funding

12. THE NEW APPROACH  Set standards for sound business practices, conservation and efficiency  Provide “free and easy” technical support to help water and waste water systems meet those standards  Enforce statutory and regulatory compliance  Provide incentives by prioritizing grants and zero-interest loans to systems that meet the standards

13. THE RECOMMENDATION TEN CRITERIA for SOUND MANAGEMENT and SUSTAINABILITY TEN ADDITIONAL RECOMMENDATIONS

14. CRITERIA #1  FINANCIAL PLAN  5 YEAR  COMPLETE REVENUE PICTURE  COMPLETE O&M BUDGET  PAYMENT INTO CASH RESERVE ACCOUNTS  AUDITABLE FORMAT NOTE: PILOT PROJECT WILL ESTABLISH STANDARD AND DEVELOP IMPLEMENTATION MANUAL! AND DEVELOP IMPLEMENTATION MANUAL!

15. CRITERIA #2  FULLY ALLOCATED RATE STRUCTURE  COMPONENT OF FINANCIAL PLAN  FUNDS FIXED AND VARIABLE O&M COSTS  FUNDS REGULATORY COMPLIANCE  FUNDS CAPITAL IMPROVEMENT FUND  IS TIERED TO ENCOURAGE CONSERVATION

16. CRITERIA #3  ASSET MANAGEMENT PLAN  COMPLETE ASSET REGISTER  DEFINED LEVEL OF SERVICE TO MEET REGULATORY AND CUSTOMER DEMANDS  RISK ANALYSIS FOR ASSETS  O&M AND CIP PLANS  METERING AND MEASURING PLAN NOTE: PILOT PROJECT WILL ESTABLISH STANDARD AND DEVELOP IMPLEMENTATION MANUAL!

17. CRITERIA #4  WATER USE ACCOUNTING SYSTEM  TOOL TO QUANTIFY:  AUTHORIZED BILLED AND UNBILLED USAGE  UNAUTHORIZED USE FOR ELIMINATION  WATER LOSS TO LEAKAGE FOR REPAIRS  WATER USAGE BY CUSTOMER CATEGORIES  QUANTIFIES SUPPLY AND DEMAND PROJECTIONS FOR PLANNING  BASIS FOR CONSERVATION TARGETS AND GOALS  REQUIRES METERING OF ALL USES  TO OPTIMIZE WATER SYSTEM EFFICIENCY NOTE: PILOT PROJECT WILL ESTABLISH STANDARD AND DEVELOP IMPLEMENTATION MANUAL!

18. CRITERIA #5  COMPLIANCE WITH OSE REGULATIONS  SUFFICIENT WATER RIGHTS  PERMITS IN ORDER  REPORTING REQUIREMENTS MET

19. CRITERIA #6  COMPLIANCE WITH SDWA, CWA, NMED REGULATIONS  QUALITY MONITORIING AND REPORTING  CERTIFIED OPERATOR(S)  PERMITS IN ORDER NOTE: 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 operators operators NOTE: 5% of water systems have chronic violations NOTE: 5% of water systems have chronic violations ESTIMATES FROM NMED

20. CRITERIA #7  ADEQUATE GOVERNANCE STRUCTURE  ARTICLES, BY-LAWS ON FILE  BOARD ELECTIONS REGULAR AND MEMBERS TRAINED  COMPLIANCE WITH OPEN MEETINGS, PUBLIC RECORDS, AND AUDIT ACTS  INTERNAL CONTROL POLICIES AND PROCEDURES  BILLING, NEW SERVICE, FAILURE TO PAY, AND OTHER POLICIES IN PLACE  BUSINESS MANAGEMENT TOOLS PART OF DOING BUSINESS

21. CRITERIA #8  PLANNING FOR INFRASTRUCTURE AND OPERATIONS  FULL INFRASTRUCTURE SCOPING  PROJECT ELEMENT P.E.R. FOR BEST TECHNICAL AND ENGINEERING APPROACH  INTEGRATED APPROACH TO WATER AND WASTE WATER SERVICE  O&M PLAN TO INSURE INFRASTRUCTURE LOGEVITY REQUIRED

22. CRITERIA #9  REGIONAL COLLABORATION  FOR EFFICIENT MANAGEMENT OF SHARED RESOURCE  FOR SHARED PROTECTION OF SOURCE WATER QUALITY  FOR ECONOMIES OF SCALE  FOR “FULL WATER CYCLE PLANNING” FOR AREA

23. CRITERIA #10  ENERGY EFFICIENCY STRATEGY  TO DECREASE OPERATIONAL COSTS  TO DESIGN EFFICIENT INFRASTRUCTURE  INCLUDES CONSERVATION

24. REGIONALIZATION DEFINED COLLABORATION AMONG GEOGRAPHICALLY PROXIMATE WATER SYSTEMS WHICH SHARE THE SAME WATER RESOURCE FOR THE PURPOSE OF: ● IMPROVING EFFICIENCY OF MANAGEMENT, ADMINISTRATION AND OPERATIONS ●REALIZING ECONOMIES OF SCALE FOR TREATMENT, ADMINISTRATION, AND MANGEMENT ●SIZING SYSTEMS TO SUPPORT NEW TECHNOLOGIES (DESAL, ASR, REUSE) (DESAL, ASR, REUSE) ● “TOTAL WATER CYCLE” APPROACH THAT INTEGRATES DRINKING WATER and WASTE WATER ●OPTIMIZING INFRASTRUCTURE DEVELOPMENT THROUGH COMPREHENSIVE INTEGRATED PLANNING AND FUNDING ● IMPROVE FINANCING EFFICIENCIES and ATTRACT PRIVATE SECTOR INVESTMENT

25. REGIONAL COLLABORATION OPTIONS: * plan together * emergency-only working relationship * share inventory/equipment * share operator * share administrative tasks (ex: billing) * share management * interconnect physical system for backup * share water rights/resources w/out system connection * interconnect systems but operate individually * dissolve current systems, form new entity

26. REGIONALIZATION VISION Convene ALL water purveyors and users: public and private, drinking and agricultural, acequias, conservancy and irrigation, industrial and commercial Convene ALL water purveyors and users: public and private, drinking and agricultural, acequias, conservancy and irrigation, industrial and commercial Involve local governments: municipality, county, special districts Involve local governments: municipality, county, special districts Include nations, tribes, pueblos Include 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— AND EVERYONE HAS A ROLE!

27. RECOMMENDATIONS 1. SET STANDARDS! 2. REVISE STATUTES! 3. FREE TECHNICAL ASSISTANCE! 4. PACKAGE FUNDING AS GRANT/LOAN COMBO! 5. IMPROVE PROJECT PLANNING—EMPHASIZE REGIONALIZATION! 6. ESTABLISH STATE PLANNING ENTITY! 7. METER ALL USES! 8. MANDATE SEPTIC MANAGEMENT AND/OR WASTE WATER TREATMENT! 9. REQUIRE CONSTRUCTION OVERSIGHT! 10. CREATE COMMUNITY COLLEGE TRAINING PROGRAMS!

28. TEN CRITERIA and TEN RECOMMENDATIONS

29. GOALS  PROTECT PUBLIC HEALTH  SUPPORT ECONOMIC DEVELOPMENT & VITALITY  PROTECT WATER QUALITY  STRATEGIC DEVELOPMENT OF 21 ST CENTURY WATER/WASTE WATER INFRASTRUCTURE  MANAGE ASSETS  PROMOTE CONSERVATION AND EFFICIENCY  FISCAL AND HYDROLOGIC SUSTAINABILITY INVEST WISELY AND STRATEGICALLY!!!

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