The Rio Rancho Governing Body will hold a final vote Thursday on a $63.4 million water and wastewater bond ordinance that unanimously cleared its first reading last month, setting the stage for the city to move quickly on a sweeping infrastructure investment plan.
If approved on second reading at the 6 p.m. meeting, the city could sell and close the bonds within 120 days — putting money to work on water lines, well reconstruction, wastewater treatment and recycled water facilities that city planners say are critical to keeping pace with Rio Rancho’s growth.
The ordinance authorizes up to $63.42 million in bonds structured in two parts.
The first is $25 million in “new money” — fresh borrowing dedicated entirely to utility construction and improvements. The second is up to $38.42 million in refunding bonds, which would refinance targeted maturities of the city’s 2015 Series Utility Revenue Refunding Bonds and three New Mexico Finance Authority loans dating to 2016. The refunding bonds would only be issued if market conditions produce a present value savings of at least 3 percent above issuance costs. Based on market data from January 2026, the city estimates the refinancing could save approximately $1.95 million net.
The $25 million in new bonds is expected to carry an all-in interest rate of around 3.6 percent — well below the 12 percent statutory maximum — with a final maturity no later than May 15, 2057. The ordinance also caps the underwriter’s discount at 1 percent of the principal amount in a negotiated sale.
The $25 million issuance is the opening move in what the city calls “bond cycling” — a long-term financing strategy modeled on how Rio Rancho already manages its general obligation bonds. The city plans to issue two separate $25 million utility revenue bond packages over the next five years to provide a steady, predictable stream of construction funding.
The strategy is designed to address the city’s 2026–2030 Infrastructure Capital Improvement Plan, a five-year roadmap adopted by the Governing Body that identifies approximately $233 million in water, wastewater and recycled water needs.
The $25 million in new bond proceeds would be applied across three areas: $122.1 million in total water projects — including new and reconstructed wells, water lines, storage tanks and water rights acquisition; $105.8 million in wastewater projects — including sewer lines, lift stations and treatment facility upgrades; and $5 million for recycled water infrastructure, including a new aquifer injection well and advanced water treatment facility.
The injection well and recycled water investment is aimed at recharging the underground aquifer that the city draws from, providing a long-term buffer against drought conditions.
This ordinance amends an earlier measure — Ordinance No. 26, Enactment No. 25-21 — that the Governing Body approved Oct. 9, 2025. The amendment extends the timeline for the bond issuance into fiscal year 2026 and adds the refunding component.
Because the bonds are backed solely by the utility system’s net revenues — not the city’s general fund or property tax base — Rio Rancho residents will not see an impact on their general taxes. Repayment comes entirely from what water and wastewater customers pay each month.
To meet its debt and increased operating costs obligations and fund capital projects, the Governing Body previously approved annual 3 percent increases to water and wastewater rates for fiscal years 2026 through 2030. The first adjustment, approved in March 2025, went into effect on July 1, 2025, for FY 26, with future adjustments scheduled for July 1 annually. A dedicated Water Rights Acquisition Fee — a monthly charge established in 2010 — will also increase 3 percent annually during that period.
For a residential customer on a standard 5/8-inch meter, the base monthly water service charge will climb from $13.17 in 2026 to $14.83 by 2030. The base wastewater charge will rise from $15.26 to $17.18 over the same period, with per-gallon volume charges increasing proportionally.
The capital plan covers a range of projects residents will feel directly. Drinking water safety upgrades include improvements to treatment processes that remove naturally occurring arsenic from groundwater, keeping the city’s supply in compliance with federal standards. A recent system review confirmed Rio Rancho’s distribution lines contain no lead.
Aging and corroding water and sewer lines throughout the city are also targeted for replacement, reducing the risk of breaks and spills. Expanded water storage capacity supports fire suppression — a factor in the city’s current Class 2 fire protection rating from the Insurance Services Office, one of the highest designations possible, which can lower homeowners’ insurance premiums.
City officials have framed the rate increases as a structured, predictable investment: modest annual adjustments now in exchange for infrastructure that avoids more costly emergency repairs and service failures as the city’s population continues to grow.
Authority to finalize bond terms — including exact interest rates, maturity dates and redemption features — would be delegated to the mayor, city manager and director of financial services under the ordinance.
How to get involved
Thursday’s vote is the last formal public opportunity to weigh in before the ordinance takes effect.
Attend in person. The meeting begins at 6 p.m. Thursday at Council Chambers, Rio Rancho City Hall. Residents wishing to speak must register with the city clerk no later than 5:45 p.m. — 15 minutes before the scheduled start time.
Submit written comments. Written input submitted to the city clerk before 4 p.m. Thursday will be entered into the official record before the meeting begins. Contact the city clerk’s office at 505-891-5004.
Join virtually. The meeting will be streamed live at rrnm.gov and accessible via Zoom. To join by phone, dial +1 720-707-2699. Virtual attendees wishing to speak should contact the city clerk in advance.
Why Thursday matters. If the ordinance passes its second reading Thursday, the city is authorized to proceed immediately. Bonds are expected to be sold and closed within 120 days, meaning construction financing could be in place by summer.
Residents requiring disability accommodations to attend or participate should contact the city clerk at least 48 hours in advance at 505-891-5004