Voting begins Wednesday for city gross receipts tax question

By Dave Gragg

Early voting begins Wednesday for a quarter-cent gross receipts tax in Tucumcari, the proceeds of which will go to pay for a water pipeline from Ute Lake.
When the Tucumcari City Commission called for the May 20 election, the resolution they passed said the money would be used solely for the “acquisition, construction and maintenance of a Ute Lake water treatment and delivery system.”
The tax would raise about $216,000 a year by tacking on an additional 25 cents to every $100 spent, said City Manager Richard Primrose.
Opponents of the tax have said the city should worry more about economic development than water, since the city has water for the foreseeable future, but little economic prospects.
Primrose countered by saying, “This is our future and I think for future economic development (water) is one of the major advantages we’ve got.”
“Industry will go to water,” he said.
Primrose said the city could not count on its water supply, especially because of the current drought.
Water flows from Conchas Lake to area farmers and ranches via the earthen ditches of the Arch Hurley Irrigation District. Many believe water seeps from the canals into the city’s water supply, keeping the well fields charged.
The drought has limited the amount of water that comes down the canals, and a proposal to line the canals and stop the seepage could put the city’s well fields in jeopardy, Primrose said.
“Without the recharge through the canals, we can’t necessarily rely on those wells to be around for ever,” he said.
That’s why the pipeline project is critical, he said. But Tucumcari must come up with a way to pay for it.
All pipeline cost estimates have assumed municipalities would pay for their share of the pipeline by selling all of the water they have reserved and passing the cost on to the consumers.
But Tucumcari has reserved 6,000 acre feet of water — nearly four times as much water as it actually uses.
Tucumcari Mayor Calvin Litchfield has said without the tax, the city would have to triple or quadruple its water rates.
The quarter-cent tax would be preferable since nearly 40 percent of the gross receipts revenues come from tourists, Primrose said.
A third option is to lease the water the city wouldn’t use — nearly 4,300 acre-feet — to another entity within the Eastern New Mexico Rural Water Authority.
Primrose said he did not know if such a lease agreement alone would be enough to pay the city’s portion of the pipeline construction costs.
On April 16, the members of the water authority voted to hire a director to lead the process of planning, designing, funding and building a pipeline from Ute Lake to its 12 member communities.
Tentative estimates put the authority’s budget at $200,000, of which Tucumcari would be responsible for $50,000. That includes the director’s salary other expenses — not the pipeline’s construction.
The new tax would allow Tucumcari to pay its share as well as begin saving for the actual construction costs without raising water rates, Primrose said.
City commissioners will begin looking over next fiscal year’s budget at a meeting Thursday night. Primrose said city staff is already beginning to try to include an extra $50,000 in that budget, just in case the tax does not pass.
If it does pass, the money would go into a savings account separate from the city’s general fund.
“The commissioners wanted to make extremely sure it can’t be touched … not commingled with anything else,” Primrose said.