All Washed Up

Laundry owner says city policies about water for business will leave him dry

Luna Laundry could be the poster child for the kind of business Santa Fe needs. Yet its story might end up the kind of anecdote that economic development analysts use to talk about failure.

In ten years, the commercial laundry has gone from one part-time employee to 36 full-time employees plus 11 part-time workers. And, since owner Scott Ciener uses top-of-the-line washing machines and a recycling system, every set of hotel sheets or hospital towels washed there has a net effect of lower water use in the city and/or keeping local money local.

With over 200 clients including hotels that cater to the city's tourism industry, recently, Ciener picked up the service for Christus St. Vincent hospital and all its clinics. That added at least 3,000 pounds of laundry to his daily load and kept money in Santa Fe's economy that was previously going to Albuquerque.

The new client is the last straw, though. Ciener needs a bigger building. He wants to stay in Santa Fe. Yet he says the city's rules about the cost of water for business are driving him—and the jobs he provides—out of bounds.

"There is some benefit to the powers that be keeping Santa Fe small and quaint, but at the same time, you have to support jobs and you have to support the businesses that are there," he says. "And what the city is telling me—not with the words of the politicians or the staff, because what they all say with their words are, 'We want you to stay'—their actions are, 'Get out.'"

It's not the first time Ciener has threatened to leave Santa Fe because of the water utility. In 2007, he ran into trouble after the city changed its rates into a tiered system that charged businesses increasingly higher prices as they used more water. The next year, city officials made an exception so that he and other operations like car washes and an ice plant could purchase higher volumes of water at the lower "Tier 1" rates.

City officials don't seem too interested in his plight this time. He's approached three councilors and the mayor and even hired a lawyer who formerly worked at City Hall.

Nick Schiavo, the director of the city's Utilities Department, tells SFR that after reviewing the water use and bills for Luna Laundry in recent years, he sees a sweetheart deal that already comes at a cost to other water users.

The city's special rates saved the business about $23,000 in 2010 for an average use of about 130,000 gallons per month. Now that the business has expanded and is using more than 300,000 gallons per month, other ratepayers are subsidizing it by more than $51,000 every year, Schiavo says.

"Today, if he wanted to move or even build a brand new facility, he would probably have to go back before City Council to see if they would give him this great deal again, to buy everything at Tier 1, and he would certainly have to bring water rights associated with the number of acre-feet per year that he is going to use, and he would have to pay his utility expansion charge, meter fee and other charges."

The city's rules about water service require significant investments that are aimed at making sure there's enough for all homes and business.

Every new business has to get a water budget approved by the city that determines how much water will be used at the spot every year. Then, the business must purchase an equivalent amount of water rights from the city or purchase them elsewhere and transfer them to the city, a cost of about $16,000 per acre-foot.

The same rules apply to a business that plans to close one location and open in another. Water, the city says, stays with the property, not the user.

By Ciener's calculations, he needs up to 500,000 gallons per month, and it will cost $500,000 just to turn water on at another facility. If he goes to Rio Rancho or Pojoaque, he says, that cost would be much less. While he's committed for the winter, come spring, unless councilors are willing to look at the problem, Ciener says it might be time to call it a wash.

"We are not a big new water user that is coming into Santa Fe and is going to increase the size of the water use," he says. "We are already using it. We just want to move it. And the bigger we get, the less water Santa Fe needs."

Kate Noble, the city department head who oversees economic development planning, says that while businesses sometimes talk about the cost of water in Santa Fe, it's not an issue her office sees as an impediment.

"The reality on the ground is that the city has done a lot of good work to safeguard its water supply," she says. "With a high water use business, Luna Laundry seems to be a good one because they are doing so much reuse and recycling, but we have to look at the policies across the board and how they are applied."

Note: An earlier version of this story gave the wrong figures for the laundry's water use, based on erroneous information from the water division. Rather than a 130,000 gallons in 2010, for example, the division said the use was 13,000. All those figures have been corrected.

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