Study Shows Buckman Diversion Project Will Give Area Economy Big Boost

The New Mexican 

Construction of the Buckman Direct Diversion project will pump about $287 million into the area’s economy, according to a study released Wednesday.

Lee Reynis, with The University of New Mexico Bureau of Business and Economic Research, analyzed spending for the massive project to draw surface water from the Rio Grande.

“We are expecting this project to have a major stimulatory effect on the economy,” Reynis told the elected officials who are overseeing the project on Thursday.

The study estimated the project’s effect on the four-county region that includes Santa Fe, Bernalillo, Sandoval and Rio Arriba.

The diversion is a joint city/county effort that aims to deliver up to 3 billion gallons of drinking water each year to Santa Fe-area households and businesses. It will use water imported into New Mexico from Colorado via the San Juan and Chama rivers.

Construction began at a site along the Rio Grande in September, and project managers say it’s about 18 percent complete, still on target to be online by the spring of 2011.

Design and completion of the diversion and its 26 miles of pipelines along with pump stations and a treatment plant is estimated to cost $216 million. The city and county will sell bonds to pay for their share of the project. The study methodology takes into account the negative impacts of the taxes and fees, Reynis said.

The study estimates the project’s impact on employment on the region, which is neck-deep in a recession. Reynis said work at Buckman “goes a long way toward filling the hole that we expect over the next year” with respect to job losses.

Among study findings:

• The spending impact from the project – both direct and indirect – is expected to be $287 million to the region during the four-year construction period.

• The contract with CH2M Hill and Western Summit will add some 500 construction jobs per year from 2008 to 2011, with most of them coming this year.

• More than $3 million will be paid in gross-receipts to Santa Fe County, $9 million to the state.

• The area will see $1 million in taxes from spending by employees.

• Once the diversion is operating, 26 full-time employees will be hired, each with a base wage of more than $41,000 per year.

“While the project will provide an immediate economic stimulus to one of the hardest hit areas in the state, these short-term effects are likely to be eclipsed by the more important and longer-term economic benefits of creating a reliable, sustainable water supply,” the report said.