- Associated Press - Saturday, May 16, 2015

JAL, N.M. (AP) - A southeastern New Mexico city may raise water rates if it gets $11 million loans and grants from the federal government.

Jal should know by the end of the month if it will receive an $11.3 million loan/grant from the USDA’s Rural Development Department. Jal needs to get about $6 million in federal grant money to replace every water line in the city, officials said. In addition, Jal residents will have to increase their water rates to help cover the $5 million loan, which will be paid back at 2.75 percent interest over 40 years, Jal City Manager Bob Gallagher said.

“The $11.3 million will replace all water lines within the city limits, including water trunk lines and every lateral line to every home and every business,” Gallagher said. “We anticipate a final decision on our application before the end of the month.”

Jal City Council had the first reading of a proposed water rate increase at its May 11 meeting, and a final decision will be made June 8.

The rate hike will add $8 to the average customer’s bill beginning July 1 and will add an additional $5 on July 1, 2016 and another $5 on July 1, 2017.

“We worked very hard to keep the rate down as low as possible, knowing that a significant number of Jal residents are elderly or on fixed income,” Gallagher said.

The application to USDA will help the city replace every water line in the community from the trunk lines to the laterals that run to each water meter, the Hobbs News-Sun reported (https://goo.gl/grwKra). Lines from the meters to the individual homes are the responsibility of the property owner.

Many of the city’s water lines are more than 50 years old and a recent study of the town’s water system estimated that more 40 percent of the water the city pumps from its wells is unaccounted for, likely lost through leaking lines.

The move comes as towns and cities across New Mexico face aging water infrastructure and the need to raise rates to get federal grants and loans. However, residents have been resistant to rate increase, leaving aging systems intact.

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Information from: Hobbs News-Sun, https://www.hobbsnews.com


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