1. Rapid Assessment Process Project Strategic Plan Doña Ana MDWCA Water and Wastewater System Improvements Doña Ana County, NM Presented to: Stakeholders and Project Sponsor Santa Fe, NM February 4, 2003

2.  General Aspects  Environmental and Human Health Indicators  Technical Approach, Objectives and Funding Plan  Public Participation  Sustainable Development  Project Development Schedule  Stakeholder Comments/Discussion Agenda

3. General Aspects Project Location  The Doña Ana MDWCA is located approximately 48 miles north of the U.S./Mexican Border in Doña Ana County. Doña Ana County

4. State of Existing Water Supply and Distribution System  Originally constructed in 1976, with continuous improvements; major improvements were constructed in ’95, ’97, and ’98.  The system includes 5 groundwater wells with a total pumping capacity of over 3.5 MGD, 4 water storage tanks with a combined capacity of 4 MGD, 2 booster stations and over 90 miles of distribution lines. DAMDWCA has approximately 2,900 acre-ft of water rights available.  The distribution system is impacted by bottle-necks caused by undersized lines and has experienced increased TTHM and sulfide levels in some areas due to the lack of looping in the system requiring regular flushing efforts to address the potential health threats. Several areas within the distribution system do no meet fire flow requirements enforced for new systems. General Aspects

5. State of Existing Water Supply and Distribution System  Several individual wells and small systems are present within the DAMDWCA service area, from which potential health threats are unknown.  Documented depletion of the groundwater basin is occurring with no alternative source readily available. General Aspects

6. State of Existing Water Supply and Distribution System  Concerns: Currently, the undersized lines and lack of looping in the distribution system increase potential health threats, do not provide adequate fire flow, and cause O&M problems requiring regular flushing efforts (loss of water). Residents served by individual wells and small systems may be threatened with potential health risks and connection to, at least, domestic water service would eliminate this risk. Groundwater source depletion may be expedited by multiple withdraw sources and an existing alternative is not available. General Aspects

7. State of Existing WW Collection and Conveyance System  Originally constructed in 1998 and owned by Doña Ana County. DAMDWCA operates and maintains the system (DAC/DAMDWCA). WW is conveyed to the CLC WWTP for treatment (CLC/DAC). CLC charges are a primary component of the system user rate.  The collection system has 257 total connections, less than half of the number connections expected to be included with the existing infrastructure and authorized for connection in the CLC/DAC agreement.  The system includes one lift station with average daily flows of 86,400 gpd, currently operating well below its capacity of.18 MGD and a force main connecting to the CLC infrastructure which has a capacity of 1,200 gpm. General Aspects

8. State of Existing WW Collection and Conveyance System  Approximately 2,716 of the existing water connections currently served by DAMDWCA are not served by wastewater collection and are using septic tanks and cesspools. The surrounding communities also do not have community wastewater services and use individual on-site systems.  Concerns: There is a significant existing need for community wastewater services. The existing need within the areas served by the existing infrastructure have delayed hook-ups, potentially for financial reasons. The total existing need of the DAMDWCA service area and larger regional area are in need of wastewater service. Continued treatment with CLC may or may not be cost-effective with the expansion to the total existing need, alternatives should be analyzed. General Aspects

9. Proposed Water and Wastewater System Improvements  Improvements and rehabilitation to the pressure, delivery and storage capacity to provide safe and adequate service throughout the system, eliminating potential health threats.  Develop an alternative water source for the DAMDWCA service area and surrounding water systems to address the regional need. A surface water treatment plant is proposed for consideration and a site has been identified for the facility.  Expand wastewater system to meet the existing needs within the DAMDWCA service area and region.  Evaluate WW treatment alternatives including continued service with the CLC or constructing a new regional WWTP. General Aspects

10. Total Estimated Cost: $22 Million (Based on DAMDWCA estimate)  Wastewater Treatment Plant Facility Plan $59,290  Surface Water Treatment Plant Facility Plan $62,580  Wastewater Collection System Facility Plan $88,300  East Mesa Water System Improvements $1,164,000  Trails End Water System $350,000  San Ysidro Water System $294,000  Surface Water Treatment Plant $6,000,000  Wastewater Treatment Plant $7,320,000  Wastewater Collection System $6,530,000 General Aspects

11.  Population: 9,695 (currently served) 20,000 (regional)  Annual growth rate*: ~3.5%  MHI*: $29,808.00  Unemployment rate*: 5.4%  Legal utility provider  2,973 water accounts  257 sewer accounts  11 employees (7 certified operators)  Billing efficiency: 99 % Project Sponsor Profile:

12. General Aspects  USDA – water and wastewater improvements. Current: $920k grant/$510k loan for water.  CDBG – $26,500 (w/match) Planning Grant, $260,000 (w/match) San Ysidro Water Improvements  NMED – water and wastewater improvements. Current: $240K grant, $600k loans for water.  NM SAP – water and wastewater improvements.  EPA – direct congressional appropriation.  No prior BECC or NADB assistance. Prior Agency Support:

13. General Aspects  In January 2002, the Northern Doña Ana Water Treatment Plant Study Task IV was funded by the Environmental Protection Agency (EPA). The study pertained to Water Use Requirements, Surface Water Design and Recommended Surface Water System Improvements and was prepared by Molzen-Corbin and Associates for the Lower Río Grande Water Users Organization (LRGWUO).  Boyle Engineering Co. and Parsons Engineering Science, Inc. completed the Final El Paso-Las Cruces Regional Sustainable Water Project in March 2000 for the New Mexico – Texas Water Commission. The Environmental Impact Statement for El Paso-Las Cruces Sustainable Water Project has been completed. Prior Studies:

14. General Aspects  In 1995, a 40-Year Water Plan for the DAMDWCA was approved by the New Mexico State Engineers Office (SEO).  In July 1989, Molzen-Corbin and Associates, P.A., on behalf of the Village of Doña Ana, completed a Wastewater Feasibility Study Final Report.  The Rural Community Assistance Corporation completed a financial analysis for the DAMDWCA in 2002. Prior Studies:

15. Human Health Indicators  Deficiencies of the existing water system in terms of fire protection, pressure, delivery and storage pose a potential threat to the health and safety of the residents served by the DAMDWCA.  By providing service to the existing need, currently using individual means, several potential health risks can be reduced.  Improvements to the wastewater systems of the area will help eliminate potential health risks that can be derived from groundwater contamination from potential sources such as septic systems and cesspools. Environmental and Human Health Indicators

16. Environmental Indicators  The collection system’s capacity is limited based on the number of connections and treatment capacity negotiated within Doña Ana County’s JPA with the CLC. The existing system does not meet the existing needs of the DAMDWCA service area and its surrounding areas. The residents not served by the community system, utilize individual on-site treatment means, which may have a significant environmental impact on the groundwater quality of the area.  Exposed wastewater accumulated at the cesspools areas and deficient septic tank systems may be potential contamination sources. Environmental and Human Health Indicators

17. Environmental Indicators  Depending on the DAMDWCA alternatives for expansion and improvements to the wastewater treatment, collection systems and water supply, additional environmental benefits may be appreciated with potential reuse applications. Environmental and Human Health Indicators

18. Compliance with Environmental Norms & Regulations Including Violations  The DAMDWCA has received one notice of violation from the NMED regarding sample contamination, which has already been resolved (it was credited to testing error).  Additional monitoring of nitrate has been required by local regulatory agencies for all systems where septic tanks are present Environmental and Human Health Indicators

19. Project Objectives  The objective of the project is to expand the water and wastewater service systems to meet the needs of the regional community including the establishment of regional water management efforts, address threats to depleting water resources, and to meet/exceed local regulatory requirements. Technical Approach, Objectives and Funding Plan

20. Technical Approach  Technical Assistance is needed to develop the following documents:  Preliminary Engineering Report and EID for Water and WW facilities.  Financial Analysis.  Rate Study.  Public Participation Program.  Engineering Design for the proposed water and wastewater system improvements. Technical Approach, Objectives and Funding Plan

21. Technical Assistance Tasks TaskSource PER and EIDBECC/NMFA/ CDBG/EPA/SAP Financial AnalysisBECC Public Participation ProgramBECC Project Certification DocumentBECC Final DesignBECC/Other Technical Approach, Objectives and Funding Plan

22. Acquired Funding SourceTypeAmount CDBG Colonias (w/match)Grant$ 260,000 CDBG Planning (w/match)Grant$ 31,500 NM SAPGrant$ 420,000 EPA (Federal appropriation)Grant$1,164,000 NMED-RIPLoan$ 500,000 NMFA (authorized/not implemented) Loan $3,478,750 Total Available Funds$5,854,250 Technical Approach, Objectives and Funding Plan

23. Identified Potential Funding Sources  USDA/Rural Utility Services (RUS)  Funds tailored for incorporated rural areas with populations of less than 10,000  New Mexico Legislative Appropriations  Multiple use – dependent on language presented in bill.  New Mexico Environment Department (NMED)  Rural Infrastructure Program loans, typically administer NM SAP  New Mexico Finance Authority (NMFA)  Water and WW Grants Program, DWSRF, Project and Equipment loans Technical Approach, Objectives and Funding Plan

24. Identified Potential Funding Sources  NM Water Trust Board  Annual authorized funding to address critical water projects  Federal Appropriations (55/45 match requirement)  North American Development Bank (NADB)  BEIF and IDP  Border Environment Cooperation Commission (BECC)  PDAP program Technical Approach, Objectives and Funding Plan

25. Project Sponsor Financial Potential Revenues and Expenditures Summary (millions) 1999 2000 2001 Revenues$0.72 $0.77 $0.77 Expenses$1.73 $0.69 $0.81 Net Available from Operations ($0.01) $0.08 ($0.04) *2002 Net Available is approximately $0.2 Existing Debt:$1.6MAnnual Debt Service: $0.1 Water WW Avg. Monthly Residential Bill:$25.22$23.35 (DAMDWCA approved rate increase for 2003.) Technical Approach, Objectives and Funding Plan

26. Agency Perspectives – October 31, 2002 meeting  Initial perspectives from the State of New Mexico through legislative appropriations, NMED loan programs, NMFA grant and loan programs, New Mexico Water Trust Board, and the USDA/RD Rural Utility Services grant and loan programs showed significant potential for participation in project funding.  Specifically, the issue of wastewater system ownership was discussed and USDA/NMED. Both agencies provided feedback that this could be accomplished. Technical Approach, Objectives and Funding Plan

27. Agency Perspectives - NADB  An initial analysis of the proposed project in regards to BEIF eligibility criteria provides a sense that the project will be eligible for this program.  An affordability analysis will be completed to determine any participation with BEIF grants including construction, hook-up and transition support.  Loan assistance can be available for construction and potential support may be provided by the IDP for completion of a rate study and other institutional capacity building needs. Technical Approach, Objectives and Funding Plan

28. Institutional Capacity Building  The project sponsor identified such needs as hiring/training operators and the development of public participation programs as institutional needs.  The Frank M. Tejeda Center has conducted an Institutional Capacity Needs Assessment with the Doña Ana MDWCA. Technical Approach, Objectives and Funding Plan

29. Institutional Capacity Building  In specific, observations were made pertaining to:  Current Operating Violations – Action Plan being implemented/resolved.  On-going Projects and Planning – Several on-going projects and major planning efforts, MDWCA requests assistance with grant compliance.  Existing Planning – 40-yr water plan, return flow document, 5-yr CIP, 10-yr strategy  Project Development and Funds Management – Assistance requested. Technical Approach, Objectives and Funding Plan

30. Institutional Capacity Building  In specific, observations were made pertaining to:  Outsourcing – MDWCA provides all operation services (less WWTP).  Operational Capacity – 7 Certified operators. Additional certified operators and/or increased levels of certifications will be needed. Operator training recommended-OSHA/HAZMAT.  Management Capabilities – Assistance requested.  Governance – Needs in continued communication for general technical issues, financial issues, regulatory issues and public relations. Technical Approach, Objectives and Funding Plan

31. Potential Obstacles  Ownership and improvement agreements will need to be negotiated before any improvements are initiated by DAMDWCA.  Depending on the WWTP recommended alternative, agreements will need to be negotiated and/or WWTP site selected. WWTP site selection is always considered a difficult effort and will require significant public outreach.  Surface Water Treatment is a new initiative in the area and will require much discussion with impacted entities. Discussions have been well established on this issue and an MOU is in process of being executed. Technical Approach, Objectives and Funding Plan

32. Potential Obstacles  Additional rate increases will need to be addressed with adequate public participation efforts.  Initially, concern was emphasized for potential delays in addressing water system improvements because of the existing dispute with CLC for service area. BECC was advised that a resolution has been developed and a Settlement Agreement is in process of being finalized. Technical Approach, Objectives and Funding Plan

33. Identification of Main Stakeholders  DAMDWCA and its members  Surrounding Water Systems – Leasburg MDWCA, Picacho MDWCA, Jornada Water, Ft. Seldon Water, St. Johns Mobile Home Park, others  New Mexico Environment Department  New Mexico Finance Authority  North American Development Bank  Frank M. Tejeda Center  Border Environment Cooperation Commission  United States Department of Agriculture  Environmental Protection Agencies  Local and Regional Organizations – CLC, DAC, EBID, IBWC, El Paso Public Participation

34. Local Politics  The DAMDWCA is governed by 5 board members. Current officials have shown their support for the project by approving required resolutions and rate increases and actively participating in project meetings. Other elected officials have also shown interest and support for the proposed projects. Public Participation

35. Minimum Criteria Requirements  The DAMDWCA made a commitment to comply to all applicable minimum requirements for the project in compliance with the BECC’s sustainable development criteria. Based on the status of existing planning and capacity assessment conducted by the Tejeda Center, a strategy to meet the applicable requirements has been included in Attachment H of the Strategic Plan.  12 of 14 minimum requirements will apply to the project of which DAMDWCA currently complies with 5. Sustainable Development

36. Project Development Schedule Task NameDurationStartFinish Application Process181 days08/22/0105/01/02 Rapid Assessment Process119 days08/30/0202/19/03 Technical Assistance Process39 days02/05/0303/31/03 Project Development Process (TA, Public Participation, NEPA) 487 days02/19/0312/30/04 Final Design Process*303 days11/04/0312/30/04 NADB Rate Study67 days05/10/0408/10/04 BECC Certification Process39 days10/13/0412/04 *Task duration is included in Project Development Process duration.

37. Stakeholder Comments/Discussion Thank you for your participation and valuable input.