The winter of 2005-2006 in central NM was one of the driest on record and communities throughout the state are facing severe summer water shortages. Regardless of the lack of NMED policy, the resort community described above has begun construction on their indirect reuse system which is projected to be operational in September 2006. Other communities are evaluating similar solutions to their water crises. It is incumbent on the regulatory agencies to develop policies and regulations that will allow these communities to address their problems while protecting human health and the environment. This will require an extensive dialog between all participants including regulators, design engineers, water utility managers, and especially the public. This dialog has begun in NM, but likely will continue for years to come.