City to Buy Private Water Company

The city of Las Cruces last week filed a court action to buy a nearly 60-year-old, family-owned water utility that serves thousands of customers on the city's outskirts.

The water rights and infrastructure of the Jornada Water Co., which serves about 3,500 hook-ups across a patchwork of developments to the north and south of the city, will transition to the city at the conclusion of the process — significantly expanding the local government's customer base and portfolio of valuable water rights. The hand-over could happen in several months, depending on how fast the case moves through 3rd Judicial District Court.

Officials say the impending, $16.4 million purchase plays into the city's long-range goal of becoming a regional utility provider. Jornada Water Co. is the second such purchase by the city in recent years.

Monday, city councilors will hear a first-reading of a proposed bond issuance that would pay for the utility, according to city documents.

Looking back

The roots of Jornada Water Co. are in an earlier company that formed in 1959 and offered well-drilling services in the local area, said Denny Rogers, president of Jornada Water Co. As subdivisions were being built in what were isolated areas at the time, the well-drilling business — Elephant Butte Pump Co. — served water to the homes. By the early '60s, the business changed its name to Jornada Water Co.

The first neighborhoods served were Hacienda Acres on the East Mesa; Capri Arc in Mesilla Park; Pecan Acres near Carver Road off N.M. Hwy. 478; University Estates off Stern Drive south of Las Cruces; and San Andres Estates north of Mayfield High School.

"People had land and asked to be served by Jornada Water Co.," Rogers said.

In 1982, the Rogers family bought the utility from the previous owners and has operated since then, Rogers said. The family also was in the development business and, most of the subdivisions it built were served by the Jornada Water Co.

"The Jornada system is a series of stand-alone sub-systems that aren't connected in part because a lot their water service was related to subdivision development," said Assistant City Attorney Marcy Driggers, who's overseeing the city's court case to acquire the utility.

The utility's footprint began to expand, but so did the city's. Annexations by the city led to about half of the utility's services area being incorporated into the city's boundaries.

Over the years, Rogers said the family made a concerted effort to develop the utility's infrastructure to city standards or stricter, even though it wasn't obligated to do so.

Driggers said the condition of the water system's infrastructure is good. The only immediate change the city plans to make is to buy about $300,000 worth of equipment to remotely monitor the water levels of tanks and groundwater wells, she said.

"Jornada's system is state-of-the-art," she said.

Rogers said Jornada Water Co. owns rights to use 5,961 acre-feet of water year, according to the company and the city.

Of that, more than 2,400 acre-feet of water are considered "perfected," or put to use, in delivering water to customers, Rogers said. The remainder of the rights are available for future growth. The dates of the water rights vary, but many tie to the '50s and '60s, a relatively old — and therefore legally stronger — water right date.

Of the nearly 6,000 acre-feet of water rights, about 880 acre-feet are tied to the Jornada Sub-Basin, while the remainder are from the Mesilla Basin, located underneath the city of Las Cruces and much of the Mesilla Valley. In the state oversight process, the two aquifers are legally connected one another. But physically, they're distinct from one another, separated by a layer of rock, officials said.

Customer transfer

If the average household size for Doña Ana County — 2.8 people per home, according to the U.S. Census — is factored in, then Jornada Water Co. serves about 9,800 people.

The company's 3,500 water connections will be added to the city's roughly 32,400 existing water hook-ups, amounting to a more-than 10 percent increase in the city's overall customer base.

Asked if rates will increase for the soon-to-be-former Jornada Water Co. customers with the transition, Rogers said water users on the low-end of the usage spectrum will see rate decreases, while those on the high end are likely to see increases with the city's rate schedule.

Rogers estimated about 70 to 80 percent of Jornada Water Co.'s customers are already served by one or more of the city's other utilities services, such as wastewater or natural gas. That should make for a smooth the transition, he said. The company will send out notices to customers, possibly in the next billing cycle, to alert them about the upcoming ownership transfer.

The city is planning to hire the utility's staff, according to the company.

Read full article at: La Cruces Sun-News