Water Rates and Chamisa Hills Country Club

This article is from the Rio Rancho Observer:

CHCC buyer wants lower water rates
Sunday, August 11, 2013
By ARGEN DUNCAN Observer staff writer
RR Observer

The prospective new owner of Chamisa Hills Country Club is asking the city for a contract lowering the rates for recycled water used to irrigate the golf course. The rates are scheduled to increase dramatically next summer.

According to a written proposal dated July 22 and submitted to City Manager Keith Riesberg, Michael Schumacher, who is in a due-diligence period before buying the course, suggested a two-tier contract rate for bulk use of recycled water. The contract would begin July 1, 2014, and last 10 years.

Schumacher proposes a rate of $1.38 per 1,000 gallons for the first 230 million gallons per year, which he said is consistent with the average water use for Southwestern golf courses the size of Chamisa Hills. For use above 230 million gallons a year, Schumacher suggested a rate of $2.51 per 1,000 gallons.

Chamisa Hills currently has an agreement with the city in which it pays 47 cents per 1,000 gallons for reused water. Once that agreement expires on July 1, 2014, the course would pay $3.28 per 1,000 gallons, and the rate would rise to $4.54 by 2017.

Schumacher has a goal of using not quite 230 million gallons a year to maintain the course, compared to the current 273 million gallons.

Also, the rate would be subject to annual increases or decreases based on inflation.

*The objective is to establish a bulk reclaimed water rate which is competitive to the market, balanced, encouraging of water conservation, positive to economic development and fair to all constituents,* Schumacher wrote in his proposal.

The proposal must win approval from the city Utilities Commission and then the Governing Body to take effect.

According to Schumacher*s proposal, the average regional peak-season rate for non-potable water is $1.38 per 1,000 gallons. The Albuquerque price is $1.08 per 1,000 gallons.

Schumacher said his proposed rate would encourage water conservation, allow the golf course to compete with Albuquerque courses, provide a chance for continued economic development and allow his company, BIZDOC Inc., to buy Chamisa Hills and be successful.

*The course*s water cost going forward, assuming we hit targeted water conservation gallons, is about $317,000 per year, as compared to the southwestern U.S. average cost of water per year (for a 27-hole course) of $160,500 * or almost double the average water cost,* Schumacher wrote.

In the proposal, he said he has a budget of about $6.5 million to buy and renovate the country club, including the golf course, club house and tennis courts. He said economic impact could include benefits to the values of nearby homes, gross receipts taxes, property taxes and the payroll for 60 employees.

City Councilors Mark Scott, whose district includes the golf course area, and Chuck Wilkins declined to comment on the proposal, saying they didn*t want to influence the decision of the utilities commissioners.

*They need to make their own decision and then bring it back to the governing body, to me,* Scott said.

However, he did say the golf course has value to Rio Rancho, its economy and surrounding properties. Scott hopes the public, businesses and community leaders will offer input on the matter.

*The more community involvement we get, the better product we have,* he said.

Thursday afternoon, Mayor Tom Swisstack said he hadn*t seen the proposal yet and so declined to comment.