By Mary Alice Murphy

Members of the Grant County Water Commission are seeking funding for the regional water plan, which will develop a well field near the Grant County Airport to benefit, first of all, the town of Hurley, which has no water rights, and then extend the water transmission lines through the Mining District to Silver City.

The first potential funder, Rick Sebenoler of the Austin, Texas, office of the U.S. Economic Development Administration, spoke through a conference call, initiated by Priscilla Lucero, Southwest New Mexico Council of Governments executive director.

Lucero explained the project and broached the subject of whether the EDA could be a potential funder.

"The project would include water storage to ensure a viable water supply for communities and to provide for economic development," Lucero said. "The engineering for Phase 1 has been completed. We have received some Colonias Infrastructure Fund money, and have applications in with other funders. The main purpose of Phase 1 is to provide water to Hurley, which has no water rights of its own. Freeport McMoRan Copper & Gold Inc. has provided water to the town for many years, but has put Hurley on a limited contract, with only a few years remaining for the company to provide water to the town.

"With the funding received, it leaves about $10 million needed to bring the water to Hurley," she continued. "The goal of the commissioners is to provide water to Hurley, the other communities and the county."

Alex Brown, Silver City town manager and chairman of the water commission, added that Silver City had applied and received recharge credits to reuse the water discharging from its wastewater treatment plant.

"The state approved 747 acre-feet of water in recharge credits," Brown said. "We will contribute that amount to the Mining District to provide water. Phase 1 consists of well field development and a transmission line to Hurley into the town's water storage. Phase 2 will be a booster station in Hurley to send the water uphill to Bayard, Santa Clara and Silver City. Each community will maintain its own water distribution system."

Lucero noted the water source is located next to the Grant County Airport industrial park.

"The main reason why Silver City is involved is that we don't need the water," Brown said. "We are supporting it as the shopping hub for the communities, and because buildable space is at the airport."

Sebenoler said the EDA is a small federal agency, with few employees and "we don't have the deep pockets of some other agencies. We have about $20-30 million for our five-state area. Our mandate is toward job creation and job retention. If lack of water is an issue where jobs will be lost or to draw in private investors that need the water, we can maybe help. The water issue is a nationwide crisis. Every community has a broken down or inoperative water system."

He made suggestions to the group that is consider outside funding and community bonds, which are already under consideration by the water commission. Sebenoler also touted a sustainable energy connection, and the necessity to get "big-time political support."

Lucero explained the USDA was in the room. "We have communities that have tapped into the USDA Rural Utilities Services. In the region we have done a lot with sustainable energy."

Brown echoed that sentiment by saying the town had used ARRA funding to create an Office of Sustainability. "We entered into a power purchase agreement with a private entity and bought energy at 6.2 cent a kilowatt hour for a blended rate of 12 cents a kwh to provide solar energy to our wastewater treatment plant. We are also looking at a solar array to run the well for this project. Sen. Tom Udall is a big supporter of this project. Congressman Steve Pearce is behind it. We need to talk to Sen. Martin Heinrich, and our state legislative representatives are behind it."

Clyde Hudson, USDA Rural Development area director, gave an overview of what the USDA does.

"Are you seeking funding from us as individual agencies?" Hudson asked.

"That was (NM USDA Director) Terry's (Brunner) suggestion," Lucero said.

"I know that Phase 1 is planned, so that the project can serve more than just Hurley," Hudson said. "The transmission line from the well field is of a size to serve all the communities. We can fund water and wastewater projects through Colonias. Santa Clara, Hurley and Bayard qualify as colonias. Congress sets aside money for colonias, about $8 million to $9 million to New Mexico, the same as to Texas. The funding can be 100 percent grant, and our regular funding is 25 percent grant, 75 percent loan.

"We need the preliminary engineering report and the environmental report for the application," Hudson said. "I understand Hurley needs water, because I know your history. You have an immediate need to find a water source. You other communities need to show your need for the water for current residents and future growth."

He explained that under the regular program, the three communities of the Mining District are eligible for up to a 75 percent grant and 25 percent loan. The grant is used to reduce the rates to a reasonable loan up to 40 years at a current 2 1/8 interest rate, which changes quarterly. "You can qualify for that rate at approval or at closing. We urge you to continue working with the Colonias Infrastructure Fund."

Lucero said CIF had funded the planning for the project and the PER.

"We want to leverage $5 million, $7 million, $8 million within reason," Hudson said.

"We have received $2.5 million from the Arizona Water Settlements Act New Mexico Unit Fund," Brown said.

Hudson noted the USDA's 306C program can also provide funding to individual homes that cannot afford to hook up to a water system or wastewater system. "We can make grants to low-income homeowners on their side of the meter."

Bayard Mayor Charles Kelly asked if it would be better for the individual communities to apply for funding or as the water commission.

"The agency encourages regional collaboration," Hudson said. "There has to be review from your own counsel on how best to proceed. You have to work out the issues amongst you."

Brown noted that Silver City does not qualify. "What if five eligible entities form a JPA, including Hurley, Bayard, Santa Clara, Hanover and North Hurley?"

"Each is eligible," Hudson said.

"We will be turning this water over to this entity," Brown said.

Hudson noted that the USDA does not fund test wells, but "we do fund wells."

Brown said a water model of the whole area had been done.

Gary Berg of Engineers Inc. said the first test well had found water. "We didn't go as deep with the first test, but with the second we'll be able to pin the bottom of the water when we hit bedrock."

Lucero asked what the most viable time to apply for funding would be.

"We'd love to have it in the fall," Hudson said. "What happens is if we don't spend all our funding by the first Friday in April, it is given to other states. It behooves us to spend our money as fast as possible. We want to start funding projects in the fall, after October 1."

Brown said the town is working on a water conservation plan. "If we can prove this will conserve water, we get a credit to take 3.2 percent interest down to 1 percent."

"We can't buy down on loan interest," Hudson said. "Hopefully, we can use leveraged funding from the state with Colonias funding."

Lucero said she thinks Colonias will have an application cycle in October or November and maybe two cycles a year."

"We would love to move that up," Hudson said. "We have delays in our getting applications."

Lucero asked if other states are utilizing their colonias funding. Hudson replied that this year: "Yes, California and Arizona are using their available funding."

"An application for $10 million doesn't scare us off," Hudson said.

Hurley Mayor Ed Encinas asked if the five groups decided to do a JPA, "would the loan payment be based on population?"

"It would be based on water usage among the members," Hudson said.

Lucero also presented a FundIt application, which goes to to all state agencies. "I am forwarding this application. On June 16, the agencies will meet and you can present this project to the whole group."

To a question about the Colonias funding awards, she said the meeting would take place at 1 p.m. June 4 in Socorro.

The next Grant County Water Commission will meet at 3 p.m. Wednesday, June 17, at the Hurley Town Hall.