Water Trust Board briefs committee; Eastern New Mexico pipeline advances with federal, state and local funding

A joint briefing to the Legislative Finance Committee covered the Water Trust Board’s current award cycle, the finance authority’s new technical‑assistance program for small systems, and construction progress on the Eastern New Mexico Rural Water System (the “Ute” pipeline).

Marquita Russell, Finance Authority staff, told the committee the Water Trust Board recommended funding 60 projects this cycle totaling roughly $146 million and that a second award cycle in August could add another $30–$35 million; some large municipal requests remain pending executive‑order compliance. She also described last year’s House Bill 211 changes that permitted wastewater projects and created a technical‑assistance carve‑out to help regionalization and small‑system planning.

On the pipeline, Mike Morris, mayor of Clovis and chair of the Eastern New Mexico Water Utility Authority board, said the system is designed to deliver a maximum of 16,415 acre‑feet annually from Ute Reservoir to member communities once complete. The project is a federal‑state‑local partnership with a historically negotiated cost share (U.S. Bureau of Reclamation roughly 75%; State of New Mexico 15%; local members 10%). Morris told the committee the authority has received roughly $577 million in capital funding so far, has about 130 miles of pipeline under design or construction, and expects the project to be substantially complete by 2031.

Key Water Trust Board items presented and discussed: - Policy and readiness: House Bill 211 (prior session) expanded eligibility to include wastewater and explicitly authorized use of Water Project Fund dollars for technical assistance and capacity development; the finance authority is finalizing implementing rules and will accept wastewater applications in the coming cycle. - Cost‑overrun set‑asides and appropriations: the Water Trust Board previously set aside multi‑year amounts for cost overruns (e.g., roughly $2.3 million in 2021, $5.1 million in 2022 and $6.7 million in 2024) and the legislature provided $18 million last year for construction shortfalls on previously authorized projects; many projects authorized in recent years have not yet started construction, so additional overruns are expected. - Application volume and next steps: the Board recommended 60 projects for this cycle; about $146,000,603 was recommended for awards now, with additional pending applications totaling about $68 million where readiness conditions were not yet met; a second award cycle in August was expected to allocate more available severance tax bond and general fund dollars.

Morris and ENMWUA administrator Orlando Ortega described the Ute pipeline progress and funding posture in more detail: - Project scope and purpose: the Eastern New Mexico Rural Water System is federally authorized (2009 omnibus authorization) and the state enacted enabling legislation in 2010 to create the Eastern New Mexico Water Utility Authority; the system will provide surface water as part of a regional portfolio to reduce reliance on the Ogallala aquifer. - Size and shares: the authority’s allocation totals a maximum of 16,415 acre‑feet; Clovis’ allocation (including Cannon AFB) is 12,532 acre‑feet with Cannon’s share about 2,150 acre‑feet. Morris emphasized the project’s national‑security implications for Cannon AFB mission readiness. - Financing, timeline and construction status: the project’s cited financing model is roughly 75% federal, 15% state and 10% local; the authority received a significant IIJA‑era federal infusion (about $177.4 million in FY22) and has been described by USBR as “shovel ready,” which has helped the project secure additional federal attention. Morris reported approximately $577 million in capital funding received so far and an internal total project estimate of about $950 million (the Bureau of Reclamation later repriced a ceiling at $1.4 billion). The authority reported multiple construction segments complete, five major segments actively under construction and about 26 budgeted construction projects in the pipeline.

Committee questions focused on executive‑order readiness for municipal applicants, the technical‑assistance program for small systems, the Water Trust Board’s prioritization criteria, and local concerns about Ute Reservoir levels. Senator Trujillo and others asked about telemetry and leak detection on the pipeline; ENMWUA staff confirmed modern monitoring and a centralized control center were part of the design. Senator Woods asked about pending litigation: Morris acknowledged a lawsuit filed by the village of Logan, Quay County and private landowners seeking to halt some construction; Morris said the authority filed a motion to dismiss, no temporary restraining order is in place, and planned construction (Raw Water 1A) was expected to proceed to bid.

Discussion vs. decision: the presentation was informational. No Water Trust awards were voted at the committee meeting (Water Trust Board and Finance Authority processes determine awards). The committee asked staff to continue coordination with Water Trust Board, the Finance Authority and local governments to ensure readiness criteria and technical assistance smooth project delivery.

Ending: committee members praised the Finance Authority’s planning and recommended the Board’s planning and readiness requirements as a model for other capital appropriation processes. Russell said the finance authority will finalize rules and contracting for technical assistance this summer and return to the committee with additional updates as projects move toward contracts and construction.