Santa Fe officials outline FY26 public utilities budget, warn of large wastewater capital needs and proposed rate action

Interim Public Utilities Director Jesse Roach on Wednesday presented the proposed fiscal 2026 operating budget for Santa Fe’s Public Utilities Department and told the city’s finance committee the department has sufficient operating revenues today but faces large capital needs — especially at the Paseo Real wastewater treatment plant — that will require additional financing and likely rate increases.

Roach said the department has more than 260 funded positions and predicts roughly $84,000,000 in total revenues across its enterprise funds (water, wastewater and environmental services) for FY26. "The difference between the operating budget and the revenues is used to fund CIP," Roach said, adding that those capital needs drive the revenue requirements for the utilities. He added that the water division alone holds about $1 billion in physical assets and that an appropriate long-term replacement program would imply roughly $10–13 million a year in capital spending to keep assets current.

Why it matters: Committee members pressed staff for details because the utilities face multi‑decade deferred maintenance and a looming decision on how to finance hundreds of millions of dollars of work. Roach and division directors said operating reserves and one‑time grants or low‑interest loans can address some projects, but the scale of wastewater plant needs makes rate action, loan funding or bonding unavoidable without additional outside funding.

Key details

- Revenues and operations: Roach said predicted FY26 revenues by fund include more than $41,000,000 for water, about $21,000,000 for wastewater and $22,000,000 for environmental services, and that recent audited operating spending ran lower than the full budget because of vacancies and typical underspending. He cautioned that those revenues are not sufficient to fully fund long‑term…