Fluoride Action Network

Utility doesn’t plan rate increases for water services

Source: Albuquerque Journal | April 18th, 2016 | By Ollie Reed Jr, Staff Writer

For the first time in four years, no rate increases are planned for water authority customers even though the utility’s proposed fiscal year 2017 operating budget is $10 million more than it was last fiscal year.

Included in the Albuquerque Bernalillo County Water Utility Authority budget is $250,000 for the installation of equipment – pending water authority governing board approval – needed to put supplemental fluoride into drinking water, a controversial practice the utility ceased in 2011.

The budget, which would go into effect July 1, is subject to review by the water authority board at its Wednesday meeting and is scheduled for a final vote May 18.

Figures released by the Albuquerque Bernalillo County Water Utility Authority show an operating budget of $212 million, compared with $202 million in fiscal year 2016. Capital spending for infrastructure renewal and replacement is budgeted at $67 million, compared with $59 million the previous year.

This would be the first year out of the last four that water rates have not increased. Stan Allred, the utility’s chief financial officer, said that’s because previous rate hikes are paying off.

“We are generating the revenue we anticipated generating,” he said.

In 2013, the water authority board approved three planned increases – one in 2013, one in 2015 and one in 2017 – designed to provide funds needed to replace or repair aging infrastructure. In May 2014, the board approved an additional rate increase to offset a revenue shortfall caused by a 9 percent reduction in water usage. As a result, the average domestic water bill increased by $3 to $5 in 2013, 2014 and 2015. The average home bill is now $46 in the winter and $54 during the summer.

But Allred said it will not be necessary to add to that this year, even though the utility’s customers set an all-time low water-use record of 127 gallons per person per day in 2015.

“Basically, the rate increases have worked,” he said. “We are looking really good.”

The fluoridation equipment would be installed at the San Juan-Chama Drinking Water Plant only if the water authority board voted to resume adding fluoride to drinking water. Fluoride in water supplies is believed by many dentists to provide nutrients for strong, healthy teeth. But opponents say the introduction of fluoride into public water supplies violates rights and causes health problems.

In April 2014, the water authority board considered restarting the fluoridation program but agreed instead to take up the issue once the Centers for Disease Control issued recommendations on optimal fluoride levels in water. Those recommendations have been released.

If the board approves adding fluoride, the water utility says it will comply during fiscal year 2017 and will adhere as closely as possible to federal recommendations for fluoride levels.

Allred said the budget reflects the water authority’s ongoing commitment to increase reinvestment in its physical assets. The biggest jump in spending will be at the Southside Water Reclamation Plant, the site of an accidental discharge of 6 million gallons of sewage into the Rio Grande in February 2015. That happened when power went out at the plant and a backup system failed to function.

The fiscal year 2017 budget sets aside $26 million for work at the reclamation plant, which is in the middle of a decadelong rehabilitation project.

Allred said $350,000-plus in capital spending will go to the cost of designing a 10-acre solar-panel array at the utility’s drinking water plant.

He said the solar array will come online some time during the 2017 fiscal year and will save the utility about $350,000 a year in electrical-power costs.

There is no money in the budget for the costs the water authority expects to incur in replacing pipelines to make way for the city’s proposed rapid transit bus system. Late last year, the utility said it anticipated those costs to be at least $4.2 million and maybe as much as $30 million.

Allred said the figure discussed most recently is $10 million and the water authority would have to go to the bond market for those funds.