DISTRICT BUDGET

The District is required by law to operate with a balanced budget. The draft budget for the upcoming fiscal year is presented to the community in an open meeting in May of every year. After public input has been reviewed and appropriate changes have been made to the draft budget, it is approved by the Board and submitted to the New Mexico Department of Finance & Administration for their review and approval.

Revenues
The District's operations are financed by a variety of revenue sources: 

  • Water sales: There is a minimum “base” fee charged each month for water service, whether any water is consumed or not. There is a “commodity” charge for water sold. Late Fees and other fees provide a small amount of additional revenue.

  • New system user service fees: This is a fee charged to home builders or developers for provision of services related to connection of a new dwelling or commercial property to the District utility.

  • Taxes on properties within the District: The NM Water & Sanitation Act empowers Water & Sanitation District to collect up to 10 mils ($1 per thousand) in property taxes on the net assessed value of real property within the District. The District set the current rate of 4.246 mils in 2015.

  • Gross receipt taxes (pass-through to State): NM gross receipts tax of 5% is charged on all water sales, base and service fees. All gross receipts taxes are remitted directly to NM Taxation and Revenue Department.

  • Interest income: All of the District’s bank accounts and accounts with the NM State Treasurer are interest-earning accounts.

  • Water Rights fees: These are collected in lieu of the transference of water rights as part of any contract for new system service. Water rights fees are restricted by District policy and may only be used for subsequent purchase of water rights.


Expenses
The District budget for expenses includes operating expenses, debt repayment, contribution to reserves, and taxes (gross receipts and water conservation taxes). Over 40% of the District budget is comprised of debt service and fixed expenses.

Cash reserve accounts

The District is required to maintain cash reserves for repayment of revenue bond debt. District policy, as recommended by DFA, is to maintain a restricted cash reserve for repayment of GO bond debt. These funds are restricted and may not be used to fund operating expenses. In addition, to ensure that cash is available to meet ongoing and emergency needs, the District maintains an operating expense reserve fund and an emergency reserve fund.

 

Funding for Capital Projects

EAWSD requires significant capital for infrastructure improvement and repairs. These projects are currently funded through the District capital reserve (from any surplus operating revenues) and NM legislative grants. Additional grant opportunities and low-interest loan opportunities from State and Federal agencies are being investigated and evaluated as funding resources for capital projects.