Opinion ID: 1145452
Heading Depth: 1
Heading Rank: 7

Heading: Funding the Agreement

Text: Under the Joint Powers Agreement, the only entity responsible for payment to the BOR for water rights is San Juan County. The County will make payments from a special, segregated fund comprised of the proceeds of ad valorem property taxes. The County submitted to referendum the question of whether it should enter into the contracts and pledge revenues for payment of the water rights. The measure passed by majority vote. The Association argues that NMSA 1978, Section 72-4-8 (Repl.Pamp. 1985) restricts the County to using only water revenue bonds to fund the project. The Commission claims that Section 72-4-8 applies only to the funding of water supply systems and not to the acquisition of water rights. The Association asserts that there is no meaningful distinction between a water system and water rights and that accordingly, the Commission and San Juan County must follow the statutorily prescribed method in Section 72-4-8 for funding the contracts. The legislature, however, appears to have intended a distinction between water rights and water systems because it authorized the acquisition of water rights in NMSA 1978, Section 72-4-2 (Repl. Pamp. 1985) [1] and authorized the acquisition of water systems in NMSA 1978, Section 72-4-3 (Repl.Pamp. 1985). Section 72-4-8 applies only to the funding of water systems, and it does not restrict the funding for the acquisition of water rights in the same manner. Thus, we believe that the district court was correct in holding that the County may use ad valorem taxes to fund the contracts. The procurement of water in an arid state such as New Mexico is of unique importance. A legislative distinction, for purposes of financing, between water rights and water supply systems gives needed flexibility to county governments in their quest for providing adequate water resources for their citizens. Water revenue bonds as provided for in Section 72-4-8 are repaid by charging customers for the use of the infrastructure that constitutes the water supply system. Water rights, however, may have to be purchased for future needs. In this circumstance, there would be no immediate revenue from customers to pay for the water rights. Section 72-4-2 provides for much discretion in financing the purchase of this water. The Association also claims that the County's funding mechanism runs afoul of the Bateman Act, NMSA 1978, Section 6-6-11 & Sections 6-6-13 to -18 (Repl.Pamp. 1992). The Act was intended to require municipalities and counties to live within their annual incomes. City of Hobbs v. State ex rel. Reynolds, 82 N.M. 102, 104, 476 P.2d 500, 502 (1970). The Bateman Act has no application, however, to special funds created for special purposes. Id. The Joint Powers Agreement here was intended to create a special fund generated by a specific mill levy to pay for the acquisition of water rights, and thus it does not violate the Bateman Act.