ALBUQUERQUE (KRQE) - The city-county water authority says it may have to raise rates again to offset an imbalance between its revenue and debt.
That word from the Albuquerque-Bernalillo County Water Utility Authority comes after the financial-services company Standard and Poor's downgraded the authority's bond rating from AAA to AA. S&P said it made the move because to the of the agency's weakened ratio of its cash on hand to its debt.
The lower the S & P rating the harder it is to sell bonds and means the authority will have to pay higher rates to borrow that money.
Albuquerque City Councilor Ken Sanchez, who sits on the board overseeing the water authority, said much of the debt comes from aging infrastructure. The city and county have recently seen a large number of water main breaks.
The utility is also looking at some major upgrades to the sewage treatment plant. Other debt comes from new pipes having to be installed in developing areas of the city.
"We have to keep up with that debt, and how we pay for that debt is through our revenues brought in by the ratepayers." says Sanchez
The ABCWUA has already raised rates twice in the last three years. A 10 percent hike went into effect in 2011 and another hike is set to take effect in 2013. Those hikes translate into about $5.60 on the average monthly water bill.
Sanchez said he believes those hikes will help the utility raise the money it needs to cover current costs, but there will be more water breaks and more infrastructure costs in the future. That likely means more rate hikes.
The board will discuss the next step at an upcoming meeting.
Sanchez said he hopes a rate increase can be delayed for several years, but if the board feels it necessary to push the S & P rating back up immediately, a hike could come sooner.
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