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F I S C A L I M P A C T R E P O R T

SPONSOR Ingle

ORIGINAL DATE

LAST UPDATED

1-24-06

HB

SHORT TITLE

PORTALES WASTEWATER TREATMENT

SLUDGE CLEANUP

SB 63

ANALYST Hadwiger

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$250.0

Non-Rec

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Department of Environment (NMED)

SUMMARY

Synopsis of Bill

Senate Bill 63 appropriates $250 thousand from the general fund to the Local Government Divi-

sion of the Department of Finance and Administration in FY07 to remove and dispose of sludge

from the City of Portales wastewater treatment plant.

FISCAL IMPLICATIONS

The appropriation of $250 thousand contained in this bill is a non-recurring expense to the gen-

eral fund. Any unexpended or unencumbered balance remaining at the end of FY07 would revert

to the general fund. The appropriation is classified as non-recurring in anticipation that there is a

one-time need for this project. If the sponsor intends this to be an ongoing subsidy for the Por-

tales wastewater treatment plant, the appropriation would be properly classified as recurring.

SIGNIFICANT ISSUES

NMED noted that sludge removal and disposal is a regular part of operation of a wastewater

treatment facility and the need is predictable. As part of the normal operation and maintenance

of a wastewater facility, the City of Portales should budget for such expenses rather than rely on

state funding. State funds have traditionally been used for capital improvements, not operation

Senate Bill 63 – Page 2

and maintenance. NMED suggested that the state should encourage local governments to estab-

lish revenue streams that support normal operation and maintenance costs without relying on

state assistance.

ADMINISTRATIVE IMPLICATIONS

NMED is the agency with the most extensive expertise in this area, as well as most frequent con-

tact with local water and wastewater agencies. That agency indicates it would be preferable to

appropriate funds to NMED for purposes such as this rather than to DFA.

DH/nt