The Las Cruces City Council on Oct. 6 approved city staff's applications for three Water Trust Board projects and authorized New Mexico Finance Authority loan documents tied to drinking-water improvements, including a loan application for a $15 million Drinking Water State Revolving Fund project to support lead service line replacement.

Council approved Resolution 26-050 allowing staff to submit three Water Trust Board funding applications and voted to authorize ordinance action to accept Drinking Water State Revolving Fund (DWSRF) financing if awarded. The items passed by council vote as presented.

Grant applications described by Gabriela Pretz, the city's grant manager, include:

- SCADA upgrade (West Mesa): $427,420 requested to replace obsolete remote terminal units at seven sites; match will be set by the Water Trust Board at award time (estimated match range unknown until awards are made).

- Well 66 and related pipeline: $2,558,800 requested to equip well 66 with a vertical turbine pump, well house, gas engine, appurtenances and to construct well head piping and a transmission line; match portion will be determined by the Water Trust Board at award time.

- Highway 292 Wastewater Force Main: $1,526,600 requested to replace roughly 5,700 linear feet of existing ductile iron pipe with 18-inch PVC; this is the first year wastewater projects were allowed in the Water Trust Board cycle.

Pretz said the total requested from the Water Trust Board across the three projects is about $4.5 million; the board determines the required local match (historically between roughly 10% and 40% depending on the applicant's financial capacity). She emphasized that the match level is not finalized until the board announces awards.

Separately, the council adopted ordinance authorizing the city to enter a loan and subsidy agreement through the New Mexico Finance Authority for the Drinking Water State Revolving Fund. City staff and bond counsel said the loan package would support a lead service line replacement program and related activities:

- Par amount requested: $15,000,000 (term sheet language in the meeting packet described a maximum repayment principal amount of $3,750,000 and a maximum principal forgiveness amount in the package as shown to council); maturity no later than May 1, 2047; interest not to exceed 0.25% per the draft terms.

Catherine McKinney, bond counsel, told the council the term "disadvantaged" or "severely disadvantaged" that appears on the financing term sheet affects the city's ultimate grant/loan blend and is part of the finance authority's affordability assessment. She said that the funder evaluates many factors to determine how much loan vs. subsidy a community receives.

Council discussion focused on ratepayer impacts and project oversight. Councilor Curran asked whether the loan would cause immediate rate increases; Dominique Rodriguez, assistant utilities director, said debt would be amortized and its cost repaid over time rather than as an up-front rate charge. Rodriguez said the loan structure spreads payments over multiple years, typically 20 to 30 years, to limit near-term rate shock.

Resident Lynn Moore raised a series of detailed questions about the city's lead-service-line inventory and the possibility of inconsistent counts in prior documents; she asked how many lead lines the city assumed when requesting $15 million and whether funds could be spent on inventory or planning without actual line replacements. Catherine McKinney said she did not know the project's detailed budget line items but that the finance authority would review project scopes; utilities director Adrienne Whitmer said the request assumed a worst-case scenario for budgeting and that the city has up to 10 years to complete SRF-funded projects.

Whitmer also said the city would seek written access agreements for private properties where field inspections are necessary and indicated that, if owners refused entry, staff would return to the council for direction; she confirmed the inspector general would be allowed to review project work and that the project timeline allows multiple years to complete planning and construction.

On the Water Trust Board grants, Pretz noted the board sets matching percentages at award time. She said the board's matching requirement can vary and that staff will return to council to accept awards and bring final match amounts for council approval.

Council approved both the Water Trust Board application resolution and the SRF loan authorization (ordinance 3097). A separate ordinance (3098) authorizing a Water Trust Board grant/loan agreement for upgrades to the 2 million-gallon Telstra tank was also approved; the Telstra tank funding package included a zero-interest principal repayment amount of up to $300,000 and related grant/loan components per the board's terms.

What to expect next: if Water Trust Board or DWSRF awards are made, staff will return to council with final award terms and any required local match or loan acceptance documents. Utilities staff said they will continue project planning and begin the inventory and design work needed to comply with state and federal requirements for lead service-line replacement.

Speaker directory and technical notes are drawn directly from the meeting transcript. Direct quotes are verbatim where indicated in the meeting record.