[Music]
okay good afternoon everyone welcome to
the work session of the las cruces city
council
today is monday february 28th
2022. it's approximately 1 p.m
before we begin if you please join me in
the pledge of allegiance
okay so jennifer martinez is going to
introduce our pets of the week
good afternoon mayor and council i am
jennifer martinez with the city's
communications office
and today i have a cat and dog of the
week to introduce you to i will begin
with our cat of the week freya
freya is a seven month old female short
hair she is vocal and lets you know when
she's around because she loves to meow
for her attention for your attention she
loves to get pet and cuddle in is almost
always purring
she's a very happy girl who is looking
for a forever home and hopes it may be
your home
and then next we have our dog of the
week rose is a three-year-old female who
has spent too much time at the shelter
she's patiently waiting for for her
forever home she loves attention from
caregivers but hopes to find a family to
play and spend her life with
if you can give rose or freya a home
please contact the animal services
center to make an appointment to visit
with either of these girls the number is
three eight two zero zero one eight and
also remember you can visit with some of
the shelter's pets this weekend at
petsmart on saturday from 11 a.m to 2
p.m the address is 2200 east lowman
avenue
thank you mayor all right thank you
jennifer
and dr peraltas is going to
give us our jobs of the week i believe
we have oh there you are
awesome thank you
thank you
thank you mr mayor members of the city
council for this week's jobs of the week
the city of las cruces is hiring a
capital improvement program analyst and
this position is paying between 26 and
92 to 38.38
depending of course on the experience
and this closes on the 14th of march of
2022 we're also carrying a van driver
loader and this is with max meets and
this is paying 14 an hour and this is a
temporary position that will be closing
on the 24th of march of 2022. there's
also a position available for el paso
electric this is a rep services sorry
rep customer service and this is paying
between 15 46 an hour and it depends on
the experiences coil and closes on
march 24th of 2022 there's also a
position available for culinary chef
this is with the sonoran fair culinary
this position is paying 20 an hour and
it will be closing on march 19 of 2022
finally an entry-level field technician
and this is an occupation electrical
electronic engineering technicians with
lasin the salary for this was not
disclosed and the position will be
closing the 23rd of march of 2022 as
always for a full list of jobs
internships volunteer opportunities
visit employment.com or
governmentjobs.com forward slash careers
forward slash las cruces the contact
information with our friends at the new
mexico workforce connections is at 226
south alameda boulevard and the phone
number is 524-6250
thank you mr mayor
thank you dr payadis
okay next we're going to have is the
covet 19 refugee
cover 19 slash refugee update so
assistant city manager eric enriquez
will be presenting
good afternoon mayor and council eric
enriquez assistant city manager
to present the kovit 19 update
happy to say that things are looking
real good in donahana county and the
city of las cruces
state of new mexico everywhere as far as
covet goes
the numbers have gone down as far as
positive case counts
last week an average of less than 100
per day so very very good
that coincided with our hospitals as
well hospitals are doing very well
seeing a decrease in in new patients and
also starting to see the decrease in icu
beds and covet patients as well so
things are looking real good for our
local hospitals
donaian county vaccine vaccination
progress
the state is now
doing
weekly
data
compilation of the data on a weekly
basis so it won't take place till
tomorrow which now is
every tuesday they'll be doing that
due to the decrease in vaccinations and
then just showing minimal results
what i can tell you is we're still at 95
percent for adults in donand county with
a single dose and 80 percent with those
with two doses and those boosted we're
close to 50 percent now
as far as vaccination news goes uh the
fema bus will be here on march 10th and
13th scheduled at young park and the new
mexico department of health continues to
offer vaccinations at their clinics but
really turning it over now to pharmacies
and local providers
testing news we still have a lot of test
kits available for the home test kits
and we've publicized and you can go to
find a test
newmexico.org to find the sites here
locally and in our county
moving forward even though we know
there's a lot of unknowns still
the public health officials across the
u.s
are identifying some of the following as
the future related to covet 19
turning over the routine testing and
vaccinations to private health care
providers
and pharmacies
create and improve new ppe
and medical equipment
refined plans for vaccinations for pods
should they need or should a mass
vaccination
in the event that we have another
strain or virus that take place
uh with with that kind of news mayor i'm
just here to tell you that this will be
the last uh
weekly update for us in the meantime
hopefully it doesn't have to come back
up but it will as needed and any asylum
there's nothing to report at this time
things are looking pretty steady and
looking good
thank you
very good thank you
eric we appreciate that
okay so we have two items on the agenda
first one being the natural gas rate
review and delilah wash will lead that
often so i know there's
a few people here who like to speak so
typically how we do it is we let staff
make the presentation
have council ask any questions of staff
after they're done then i'll open it up
to i believe there's three speakers and
i know senator hamlin is here and i
believe there's a couple others that may
wish to speak and then you can take
questions from council and then we'll
open it up to everyone okay
so delilah
thank you mr mayor good afternoon mr
mayor councillors delilah walsh i am the
director of your utilities department
today we're here to discuss the rate
review and recommendations necessary to
operate and maintain the safe and
reliable natural gas system we provide
today as you know it takes scores of men
and women with complex and specialized
skills to make sure that we are not only
operational but highly effective in our
service delivery to our citizens and
ratepayers
though the utility is an enterprise fund
the council is ultimately responsible
for providing these utility services and
rate setting is part of those
responsibilities
so what is our natural gas rate review
essentially we're determining that we
have sufficient revenue
available to maintain and operate our
current natural gas system and what i
mean by that is this rate review is not
speculative toward growth or any other
issues that may happen in the future the
rate review only includes expenses
necessary to maintain the system as it
exists
today and actually it's as it existed
during the test year because today we
all know that there are financial
challenges and inflation as we go
through the years
something that we've included in this
particular rate review is the addition
of a decarbonization rider
and that's a portion of a rate that'll
be dedicated to these activities which
is
evaluating and implementing energy
efficiency measures for residential
structures we are bri identifying
priority areas that are older parts and
low income parts of the city where
efficiency measures will actually
decrease consumption of any energy
source
and we've also started partnering with
el paso electric to upgrade gas and
electric appliances to high efficiency
appliances thus decreasing
the amount of energy consumed and the
reason i mention that is because
when it comes to
equity and making sure that we're
addressing the income demands within our
community efficiency is where we're
going to find those savings so in other
words it doesn't matter well it does
matter but whatever form of energy
that's being delivered to a home a
business anywhere else
the way we're going to save money is by
decreasing consumption and that's with
anything if you buy less plastics you
decrease consumption you help the
environment if you use less energy that
decline in consumption is what helps
save money
also with the decarbonization rider it
helps us as the utility
to put in the first steps towards energy
transition as we all know the the nation
the state and even locally we're all
very committed to
decreasing our reliance on fossil fuels
that's something that the utility is
responsible for also and this
decarbonization rider helps us get to
those end goals
on that note i want to share with you
that we do have a climate action plan
in
that the city council has passed
it sets goals for the city to lower our
greenhouse gas emissions by 19 by 2030
and 73 by 2050
and you know i would like to commend the
community as a whole as you know
counselors in our climate action plan it
does state that las cruces is one of the
if not the lowest emitting community in
our region for a population our size so
we're already a low emissions area very
much thanks to the fact that el paso
does not burn coal in order to generate
electricity but with that our council
has also passed a very aggressive plan
to reduce those emissions even more and
so we're very much committed to that and
part of that
with the 2030 and 2050 goals i will tell
you on behalf of the utility and this is
just kudos that i'd like to share with
my staff
that for a department and i'm not
talking about the end users the
residents but as an operational
department we've already lowered our own
departmental emissions by 12
based on some of the the objectives and
projects that we've implemented at the
utility
so in addition to doing that we also
yielded
operational savings and reduced
the amount of emissions that our
department was generating
part of that climate action plan was a
objective to create an energy transition
plan the council reiterated that
commitment in resolution 153 last year
calling out for the utility to create an
energy transition plan to transition and
decarbonize our current use of natural
gas so that is a 30-year plan that is
not included with this rate review i
just want to reiterate the rate review
includes operation of our system as it
exists today whatever happens with the
energy transition plan i wish i knew
what the solutions were because i would
invest in those personally
but we don't know what those answers are
going to look like how we address equity
in our community how we address the
assets that we have in place how we
address the use of natural gas
or even the delivery systems there's a
lot of questions that will be answered
in that decarbonization plan but that is
not considered in this rate review
because what we're concerned about now
is how do we operate the system as it is
exists today
safely and efficiently
and so
so that that is something we're working
toward in the utility but it's not
included with this process
so
obviously i'm here today to ask you for
an increase in rates we haven't
increased our rates in over 10 years
as you know things go up in price if you
look at inflation alone over the last 11
years it's over 25 percent inflation
just in cost of goods for the entire
united states so we do have to address
that that increased demand and expense
cost
we
the way rate reviews work is we only
address the system as it exists and
known and measurable increase
so the first one is obviously salary and
benefits
we have the salary benefit increases
mandated by the city of las cruces so i
very much appreciate the
the fact that we're not speculating
toward more employees we're not
speculating at different
salary expenses we're taking what we
know to exist which is within the city
of las cruces pay policy
our
so this rate review even though we did
this with the fy 21
test year i want you to know it's
already not sufficient because we're
going into fy 23 with increased salaries
and benefits thank you very much to the
council and to the city manager i very
much as an employee and as a department
head appreciate your efforts to push our
salaries to a competitive level and make
sure our employees have that fair and
competitive wage but to do that we also
have to recover it from our rates
unfortunately those costs are not
included with this assumption because
our test year was in 2021.
this increase in rates what we're asking
to cover are equipment and vehicle
purchases
i can tell you now
when you looked at our fy 21 test year
boy we looked healthy as a natural gas
utility our fund balances were great
everything was wonderful
what we were doing is
holding on to our cash a little bit in
the gas utility if you look at our
system we're a joint utility system we
have gas water waste water solid waste
the cash we were holding on to in the
gas utility was supporting the high bond
rating we were getting for the other
utilities because our water rates were
not sufficient our waste water rates
were not sufficient even our solid waste
rates were falling behind
we've gone through those reviews and
we're finally seeing our revenues
becoming sufficient in those other
utilities so we were able to
stop deferring maintenance of our system
and invest back into that infrastructure
even though the rate review includes
equipment purchases i can tell you for
fiscal year 23 when you see our budget
it's based on today's known revenues not
in anticipation of any rate increases
because of that i've eliminated pretty
much all the equipment purchases
scheduled for natural gas for fy23
because we don't have the money anymore
the fund balances aren't there anymore
as we approach fy23 i've also reduced
their operational expenses rather
significantly to ensure that we stay in
line with current revenues so
even though the rate review includes
anticipated equipment purchases i can
tell you when you look at fy23 i think i
only allowed him a hundred thousand
dollars to replace some aging vehicles
so you'll see that in the budget coming
up but again that's why we do a rate
review
so to that end
if the increase is not approved
we will still meet the salary and
benefit increases mandated by the city
that's not something we'll take back
but in order to do so i will have to cut
operation and maintenance expenses even
more i can tell you the deputy director
for natural gas is probably already
pretty mad at me because i cut his
budget so significantly for next year
though he's handling it very well and
his staff is great
we would continue to defer any vehicle
or
equipment replacements um
one piece of equipment is simply for
replacing
detecting leaks within your line system
and replacing those pipes
i can't buy it we're not going to next
year and he'll have to wait even longer
if we defer our rates
addition to that we will stop all
capital infrastructure and repair
projects or not stop them but defer them
that means we're going to have to take
the most critical lines and those are
the only things we can work on
any lack of sufficient revenues does
impact the safety of the system
as you know we are highly regulated on
the federal side for gas safety
there's not a person
in this room in my department in our
board or with our counselors who wants
to be responsible for neglecting a
system
that can be so
impactful should something go wrong and
i don't want to say anything negative or
too extreme
but this is something that is dangerous
that we need to protect it's why we have
specialists it's why we do so much work
on leak detection it's why we schedule
repair for our system is because
putting that energy through the ground
is a highly safety sensitive object and
it's not something that we any of us can
afford to neglect
so i want to go a little bit through the
actual rate making process
essentially what happens is the lcu
board hears from staff
we tell them
mr board member we're already starting
to see that we're eating into our fund
balances we've already identified that
we have issues in our leak system or in
our line protection system that we need
to address in order to ensure safety
we know there are projects out there
where pressure is not sufficient
when we had the
arctic freeze in 2011 i believe we
actually had one area of town that went
down and we had to go back and relight
furnaces and that's not something you
want to happen in an emergency the rest
of the city was fine
our recent freeze that we had last month
we actually saw we lost a couple of
customers in
the kai not the sonoma area because the
pressure was too low and that can be
dangerous for them too so the project we
were doing at kaya heat this was to
increase the pressure to those
those areas
so those are those are all identified
and we know we have to take care of them
so staff tells the lcu board board
revenues are not sufficient we're
looking three four years into the future
we're not going to have enough money
we need to do a rate review and consider
is our rate sufficient for our
operations
we contracted with new gen they pre
created a preliminary report and i do
have representatives from nugen with us
here today if you need to get into the
more technical details they can answer
that for you
once the preliminary report is ready we
go to a ucad process that's our
utilities customer advisory group it's
part of our rate review process
that ucag has a series of public input
sessions so this year due to covid we
had a hybrid of sessions we had some
in-person sessions we had some zoom
sessions and we encouraged email input
and feedback it's part of that huge 180
page packet that we sent to you you can
actually see the customer comments
obviously nobody wants a rate increase i
don't as a end user i don't want any
rate increase as a department head i
understand the necessity of it
but
that process allows our citizens to give
us their input and what they think about
the report proposal
so
what's really interesting and i think it
actually quite legitimized this process
is after the public hearing and the ucas
recommendations that went to the lcu
board
our lcu board actually made changes to
our original rate review and preliminary
report
and what i mean by that is in
past
i think past iterations of our rate
process it was like a quasi-judicial
rate case process similar to what the
prc uses so essentially for the public
to have input you had to hire your
attorney or
represent yourself in that case
in order to oops i'm sorry in order to
have your comments heard sorry i'm my
kids always make fun of me i talk with
my hands
but you actually had to go through that
judicial process in order to make your
comments this way through the ucag you
simply submitted your public input and
that was shared and discussed among the
committee as well as with our staff
so the ucad brings its recommendations
to the lcu board the lcu board held two
work sessions to discuss the public
input to discuss comments from the green
chamber of commerce to discuss public
input that came through at their bill at
their level
and they make a final recommendation to
you
so part of what our lcu board did was
say number one
we're listening on the way the utility
operates with extension of gas lines
and so part of that recommendation is
when we went through the preliminary
report we removed all gas line
extensions
that would expand the system
and so that was taken out based on the
lcu board's recommendation in addition
to that we heard from
the green chamber and other public
commenters about the fact that we're
jumping rates so
much and so significantly particularly
in in the business class
so the board in response to that said
well then we're going to not make this a
30 jump in year one we're going to give
you a three year time period to make
that jump gradual so i want you to keep
in mind remember we're already 11 years
behind inflation
from the test year after the test year
we're going to be another two years
behind when we start the new fiscal year
by the time this is implemented so now
we're going to be about 13 years behind
inflation
and then we still didn't include
additional costs that we recognized in
fy23 such as increased salaries and
benefit expenses
so the board's response to that was to
give us a 10
increase so even then we're still going
to be a little bit behind the eight ball
as that phased implementation occurs
because we're not going to get the full
100 implementation in the first year of
new rates it's going to take us three
years to get there
in addition to that the lcu board was
also very
receptive when they listened to the
public feedback regarding impacts of
covid and businesses in our economy
trying to recover from that
and said
in that case they're recommending to you
that we not if you approve new rates to
protect the system that we not implement
those rates until after the economic
recovery surcharge has been fully
recovered and what that is that's the
surcharge we're charging per deca therm
in order to recover the exorbitant costs
of gas that we experience during winter
storm uri so thank you very much to my
staff and to our attorneys who did an
incredible amount of hard work
to
negotiate
a lot of that yuri expense so our
recovery period we were looking at a
three year period will be done by this
summer so we're hoping by june july
august we'll be done with the surcharge
and the lcu board thus recommended we
hold off on any rate increases until
we've completely recovered those funds
i do want to remind you when it comes to
the ecrs we do not continue that into
perpetuity the way it works is the
minute all that money is recovered and
we've recognized that it stops
immediately we don't keep charging that
to our customers in hopes to build up
some sort of
secret fund or
anything to that effect once the money's
recovered we're done
so then once it goes through the lcu
board we get a final report and that's
the recommendation we're giving to you
today
we bring that recommendation to you to
council
council discusses it lets us know what
your questions or concerns are and then
you direct us if we bring it forward for
future action so your options can be we
want to send it back to the lcu board
for some tweaks or adjustments or we're
going to move it forward into a
resolution in order to implement the
rates
and
again like i said this is part of your
process as running the utility to set
those rates
so the adjustments we're proposing to
you today
i want to tell you first we're only one
of
about a thousand municipally owned
natural gas utilities they're very rare
in the united states most utilities that
work in energy are private non-profit or
investor-owned utilities meaning they're
there to make money off their citizens
that's not our goal as a municipal owned
utility our goal is maintenance of the
system safety reliability and most of
all affordable energy to our customers
we're not here to to make a profit if uh
if we were to
let's say for example i can't even think
of a situation where we would actually
make a profit but
but for example if our our revenue
estimates were very low and suddenly we
had an excess amount of revenue
none of that benefits the city or the
utilities department or myself or
anybody else
any of that would go back into the
system itself and it would be considered
in the next iterations of rate review
process
but again we're behind the eight ball
when it comes to dealing with the last
11 years of inflation plus the next two
years that we've missed out on in the
next three years it'll take us to
implement so i can't imagine a scenario
wherein that would happen
but there's no individual or department
that just benefits we're not going to
suddenly buy uh gold carrot
uh gold-plated work boots which doesn't
make sense with natural gas anyway but
that's not what happens in here we're
still responsible for the efficiencies
and
the
responsible use of our ratepayer and
taxpayer funds
our goal is to maintain the systems
resilience and reliability
for our new councillors i would like to
let you know that of those thousand
municipalities there are four in the
nation that receive safety awards at the
silver level
we're one of those award recipients
because we do have a safe system we were
a bronze level winner we're now a civil
silver level winner i can be honest with
you the only reason we're not at gold is
we don't have enough money and that's
because they expect you to hire a lot
more staff provide more training have a
lot more uh
resources dedicated to that system and
quite frankly we just don't have it and
even if we were trying to get the gold
award
resource wise there's no way we can we
just don't have enough money to make
that absolutely super excellent gold
level but you do have a civil silver
level utility when it comes to safety
in addition to that you're here to
maintain the excellent service that we
provide for our customers and then
enable the gas utility to fill its peak
performance strategies and a lot of
those strategies have to do with safety
it's ensuring the pressures are there
ensuring that we're doing the right
maintenance that we're doing the right
safety surveys
that we're constantly taking care of
that system
i want to emphasize
as counselors and even our lcu board
we can't neglect the fact that the cost
of doing business simply goes up over
the last 11 12 13 years
and ultimately at the end of the day
when we look at our natural gas system
it's your responsibility to say yes we
gave you the resources necessary in
order to do your jobs
so regarding the rate proposal when we
look at our revenue requirement that
means how much revenue does the city of
las cruces natural gas system need in
order to meet its operations its
principle and its cash for capital
so the revenue at current rates we found
there was a deficiency of 1.46 million
per year
so that means that we have to add 1.46
million to our revenues as soon as
possible to meet our anticipated
operational obligations
the big one is cash for capital projects
or another that's 1.92 million
as i mentioned to you
we need the money there there are no
they're very very little capital
projects i believe i have for next year
on the cip
i want to say and i apologize because
i'm doing it off the top of my head i
don't have joe with me and he usually he
can spit those out but we're rolling
over 1.5 million for projects that are
currently in process
and i'm pretty sure i don't have
anything else scheduled for capital
projects for next year i'll have to
double check we may have one in
emergency areas but i had to cut all
that out because the money's not there
the fund balance isn't there and the
revenue is not there
for your information i wanted to break
out how does the rate work what what is
where is the money going the blue bar is
the biggest bar obviously that's
personnel
when you're looking at this chunk of
blue bar and how much it's increased
since the fy 19 actuals and 20 actuals
into the test year 21
that blue bar is the def fy 21 test year
actuals it is not the fy 23 actuals
which now includes our new paid grades
and our pay
amounts
and that also includes our benefits like
insurance benefits and things the city
provides for employees
the orange bar is repairs maintenance
you can see how much i've had to cut
back on repairs and maintenance in order
to meet the other demands
the gray is other operating expenses
that's staying pretty fixed and it's
staying pretty fixed for fy
23. it's actually declined a little bit
and then the last is shared services so
that's the amount of money per decatherm
that goes to shared services to operate
the utility so those are things like
our administrative services our billing
services our customer service area our
new connections our
meter mechanics our field services
people my office and of that yellow bar
half of it's going to the city or not
quite half all i'm exaggerating it's
it's less than half but a significant
amount is going to the city's general
fund because that state
pays for the the city's administrative
services that are provided to the
department so those things are like
hr
i.t
[Music]
i won't say facilities maintenance
because we take care of our own but
there are several administrative
services that we pay for engineering
services when we work in conjunction
with public works to lay lines when they
tear up roads
so that's the breakdown of that per deca
therm or that revenue that's coming in
the next one is equipment
again this is the test year we uh
we estimated
that we would need a million dollars per
year for equipment and that's pretty on
standard for us i can tell you for next
year
it's not there
i don't i don't have the fun balance for
it but this is the funding that we need
to replace vehicles and equipment so
again we're not speculating that i have
to buy a gigantic backhoe in
anticipation that we may lay a major
line that's not how it works it is what
equipment do you have today
what equipment is aging out what do you
need to have replaced and what do you
what do you know you're going to need so
this goes back to the known and
measurable changes i can't speculate
when it comes to a rate review
now this is the big question and as a
city councilor and
as a
an official of the city this is what you
want to know is
how are our bills going to be impacted
per rate class
so
we use a 250 2.50 per deca them cost of
gas
and the decarbonization charge of 15
cents per decar
so when i add that in that 15 cents per
deca decatherm that's our
decarbonization rider that we'd like to
use for future decarbonization projects
for the natural gas system
so if you look at this on per rate class
we have our residential on the
left and our small commercial on the
right
so residents
your current average monthly bill for
natural gas again this is average it's
not the winter bill it's not the summer
bill this is your average bill based on
our deca terms of usage
is going to go from 26.87 a month to 28
so that's the jump after three years
it's going to be very gradual in that
three year process but at the end of the
year
the year three you'll see an average
bill increase to 28.13
what's important about this is you'll
see
the fact that our residents are not as
impacted
with the rate suggestion increase versus
something like small commercial and what
i mean by that and when you look on the
right
our bill impact over three years the
average bill of a small commercial
customer in the city of las cruces
utility system
for natural gas is about 75 a month
over three years
that average monthly bill will increase
to a hundred dollars
again this was the recommendation of our
board to do the three-year phase-in in
order to prevent that
large jump in just one year for the
customer
and it will grow to that
you may ask why do you see a bigger
impact to
small commercial versus that to
residential so that's twofold
first of all think about how we grow in
the city of las cruces
we're getting more residential customers
every year i think larry shared with you
last year we had 900 certificates of
occupancy uh added to the city new homes
we didn't have 900 small businesses come
on to that system so when you look at
the fact that the economies of scale
meaning the cost of running one big line
down delray boulevard to serve and i'm
making up names don't i'm not this is
not a project
i'm just giving you examples if i were
to run a big line down a road and 200
customers hook up that cost of that big
line is shared by 200 customers if i
have to run a big line to serve one
restaurant or one hospital and it's not
shared with anybody else that economies
of scale means that commercial customer
is going to absorb more of the costs so
when you look at our population growth
we see large residential growth over the
last 10 years we have not seen large
small business growth
so
the way we do our rate setting is
our consultant goes in and calculates
what's the cost of service delivery for
this rate class
service delivery cost to residential is
easy
it's one line maybe we needed a reg
station to lower the pressures to get it
there it's a few yellow pipes in the
ground and it's easy
peasy
easy to do inexpensive and the economies
of scale is different
when it comes to a small commercial or
large commercial
it takes a lot more it takes a bigger
meter it takes a bigger line it takes
bigger maintenance and so that's how we
break it down during rate classes
in the past when we did this
quasi-judicial process
my understanding and again this is just
my understanding
was we just came to a settlement
agreement saying you know by time the
protesters come in or
the protestants
and everybody has their opinion on all
the attorneys file their their thoughts
on what everything should be we just
come to a settlement small commercial is
going to be x residential is going to be
y large industrial is going to be z and
that's it
we've
taken that to actually reflect the
expenses of maintaining the system per
rate class
we saw this with water and wastewater it
was a it was a big change we're seeing
it now for natural gas but what's nice
is moving forward
this is going to be our rate setting
process and we're actually allocating
the expense of delivering that service
to the appropriate rate class
so this is the option
that our board has recommended to you
is if you look at our residential rate
first
our access charge did not change because
again remember it's very inexpensive to
actually access the natural gas system
when it comes to a house and you're
sharing that in much a much much bigger
user class
so the access charge would remain the
same
the volume charge oh i'm sorry i
apologize that's a different rate class
the access charge would go up to 1450 by
year three so every single customer who
has a natural gas connection will
automatic automatically pay 14.50 every
single month just to access the system
and so
right now it's at 13.75 and over a three
year period that new access charge would
be 14.50
it's our volume charge that didn't
change the per decade therm charge that
did not change for residential
and again it goes back to that economies
of scale and the the number of
individuals in that user class
you also want to keep in mind when it
comes to this kind of rate
customers
for whom we provide our services we
build our system to cover them in their
peak demand areas so in other words me
as a natural gas customer i think my
bill is just the access charge maybe a
buck or two every month in july but in
december i've got six people living in
my house who are always cold and so my
charge is much higher in the winter so
as a user
i demand way more in the winter than i
do in the summer but you
as a utility provider have to provide me
at that demand level so whatever i need
for the winter you have to build your
system to provide me at that level
in addition to the implementation of the
access charge changes to residential
we'll also phase in the decarbonization
rider so it'll be 5 cents in the first
year 10 cents and 2 and 15 cents in year
three
so this is what your residential bill
would look like
in the new rate
i'm sorry this is what your bill looks
like compared to other
providers
so currently in residential we're
proposing the access charge and volume
charge at residential and you'll see the
breakdown there
in our current as well as proposed when
you look at new mexico gas company they
push more of their rate onto the per
deca therm usage and so they
they push more of their costs there but
they're still at a higher rate than we
are when you consider all the factors
zia gas is our neighboring gas utility
they service a lot outside of the county
and in surrounding areas we actually
deliver gas to zia gas so they can
deliver it to their customers but when
you look at their per
their average uh residential bill
they're still higher than we will be so
even at our proposed rate we still stay
under new mexico gas company and zea gas
new mexico gas is the largest gas
company in new mexico they serve
primarily up north in the albuquerque
area but we did want to give you a
comparison because that's always a
question how do you compare it to other
utilities that are in our area and so we
are lower when it comes to the per deca
therm charge
our next rate class is the small
commercial rate
and that one again we increased the
access charge from 1641 with the three
year implementation phase in
and it would end at a 1750 per month
access charge so again every business
that is on this rate class their monthly
bill will include for their gas
connections 17 dollars and 50 cents
this is where we saw a big change in the
volume charge jumping from a dollar
seven in the current rate to two dollars
and 38 cents
so what that told us was all the rest of
the rate classes were subsidizing the
small commercial class
so you'll notice there was no change in
the residential rate because once you
take that subsidy away
and small business has to pay for itself
we didn't see a need for changing the
residential rate
um again the decarbonization would be
phased in over three periods
the next one is the large commercial
rate
again we see a big not a big jump but a
jump in the access charge
and it goes from 214 to 230 dollars per
month again monthly bill will be 230
dollars
and that would come in after year three
here the volume charge we saw a jump not
a huge jump but a jump
in order to recapture the costs of what
it costs to deliver gas to that service
so again this tells me as a director the
residential
per deca therm charge was supporting our
commercial charges so while we do this
adjustment we can give relief to the
residential charge your residents are
paying less per deca therm and now the
businesses are paying for what it costs
to actually get the services
and again the decarbonization rider is a
three year phase-in
so we just took a a random
you know how many
average dekatherms is a small commercial
business what how would that impact
their bill and then how do we compare
with other
utilities we did the same thing you see
how much lower we are in las cruces on
our current rates at 194.74 a month
versus the proposed it would jump for
414 dollars i do want to remind you
though this is after year three we're
not going to jump from a 200 bill to a
400 bill in one year this will be after
a three year phase-in
and you'll see that new mexico gas
company again one of the largest in the
state and zia gas
would be more expensive new mexico gas
is lower
but they have a much much larger
commercial backbone than we do think
about the city of albuquerque and how
many more businesses are there demanding
natural gas versus the city of las
cruces so we do kind of expect that
they'll have a less demand charge
because they have more users hooking up
into that infrastructure in that line
one question that came up during our
public comments and during our board
meeting was
what do we do to ensure
as we're implementing new rates as we're
taking care of the system how do we
address customers who simply can't
afford it
on that end we do have utility payment
assistance funds
so as a rate reviewer
we don't look at every customer saying
well
you have a lower income or you have a
higher income or this area is wealthier
than another area
we don't look at that we look at how
much does it cost to get this service to
the flame how much does it take for us
to deliver that service to the flame
and that's all it is it's very blind
and it doesn't think about those
questions so in order to address that
what we do have in the council several
years ago implemented this was having
utility payment assistance funds that we
administer through casa de peregrinos so
you guys give us about 150 000 a year
you gave us more at the last uh budget
adjustment because when we started shut
offs again we had a huge demand for that
assistance and the council was
incredibly generous to say we're not
going to let people shut off we're going
to keep helping until we get through
this
this period
so
with that um just in fy 21 which was our
test year we helped 11 085 customers and
47 commercial customers
in fy 21 we also do promise to pay which
are two-week billing extensions so this
could be something like my uh
alternator went out and i have to make
that replacement it's my only vehicle
but i'm going to get paid again in two
weeks what can i do and we did work with
7 800 customers on those promise to pay
agreements and then we have payment
plans too so our customers can come in
and i have one customer for example
her gas bill went up eighty dollars and
it was economically difficult for her to
meet that the rest of the system
can't support that one individual's
inability to pay but the city can and we
do that through a payment plan so we've
what she's done is now she just pays an
extra ten dollars every month on all her
subsequent bills until she catches up on
that eighty dollar big bill that she had
and so that's something that we do with
our customers so we're not having the
system
subsidize that individual we're working
with them to make sure that they're able
to meet the needs and obligations of not
only their bills but economically with
the decisions they have to make and like
i said the council has been very
generous
in helping us achieve this and so by
working with casa de peregrinos we
qualify the individuals we know who uses
it i can tell you this is not a repeat
customer deal we don't see the same
people over and over and over and over
again asking for help it's usually just
a one-time and you know how it is i'm
sure i know when i was in college if
something happened it felt like
it was going to destroy us financially
you know we we would just eat yogurt and
ramen for three weeks until we could get
through that crisis because to my
19 year old self living on my own an
extra 300 bill was an economic crisis
for me and so we want to work with our
customers but it's interesting they're
not repeat customers of our 40 000
customers that work with a utility
it's a handful of individuals and they
come to us and we can help
in addition to that we have our liheap
assistance program this is a federal and
state program in fy 21 we had 992
individuals qualify for that program and
this helps pay their energy bills which
includes natural gas
we also have our budget payment plans
we have about 274 dollars so for those
customers who need to normalize their
monthly expenses for me it's not a big
deal now if i have a 75 gas bill versus
a 200 gas bill i can absorb that into my
budget but for other individuals i need
to have a normal monthly expectation and
monthly payments so we do have those
payment plans available
and then we also have preferred payment
dates
and this means the customer can actually
select when their payment date is
i remember my husband got paid once a
month that was
rough
for us to be ready to be paid once a
month and having a preferred date to hit
after your paycheck is incredibly
helpful
we're also exploring a new program to
fund
assistance through voluntary
contributions to customers so in other
words if i want to pay a little bit more
on my bill to contribute to a
a needs based program we can roll out
that option to our customers so that's
something we're exploring i don't want
to get too much into it because we
haven't looked at the technical details
and what you can do and how we have to
comply with anti-donation and those kind
of questions but these are things that
we've been looking into that other
utilities do
so just as an
impact or recap based on the fy 21 test
year not the fy23 fy21 test year
i can tell you we're short about 1.46
million dollars a year in revenue
and that shortage can impact the safety
of our system and the safety and
efficiency we guarantee to our customers
the rate review addresses immediate
costs of maintaining the existing system
as it exists today to keep it reliable
and safe for our customers
so the next steps
as i mentioned to you earlier the lcu
board has recommended the the rate
increase we proposed today in the charts
that i've shown you
they recommended the three-year phase-in
period in order to
deal with the shock that may happen to
the commercial class in the small
commercial class
they also recommended that we not
implement new rates and so if you do
approve a resolution moving forward then
our commodity recovery surcharge once
it's complete sometime around july or
august that's when it will kick in
then we will bring a formal resolution
on which the council will vote
that's it for me and i stand for any
questions
thank you delilah
see if you have any questions i have a
quick one on page
12.
okay so
this
gas rate proposal i see where you have
the revenue requirement
so is this an annual
amount correct okay and do you you know
how the city has um we have reserves set
aside for what you know two months two
to three months does
does your department do that as well
mr mayor yes we do we we have reserves
in our funds i can tell you for
gas those reserves are pretty low right
now we're not even meeting the uh
requirement that our board has
recommended
which is
oh i want to say it's
it's it's a weird number it's like 3 16
or something like that it's it's an odd
number but it was um
6.85 percent is what it worked out to in
reserves
i i mean is it like two months reserved
three months reserved it's about two
months reserve i'm sorry two months two
months yep but we're we've in the gas
utility i've not been able to meet
reserves
for fy23 so there is a there is a a
suggested reserve in the gas utility yes
and do you know what that is i'll have
to look it up i'm sorry
same maybe two months i'm sorry it's uh
the recommended is not on here i think
it's 6.35 for fy23 i anticipate it'll be
1.84 so essentially be a few hundred
thousand
in reserves
so does that maybe equate to one month
two months i mean i guess like maybe
that's helped me cover payroll for a
month
okay so now that's just for gas that's
not your overall correct but what
your your budget probably
um
is
quite large
what is the total
i think it's 115 million 115 million
so
what percentage of does gas represent of
that 115 million approximately
it is
30 i want to say 37
and we go by customer size so gas is the
largest portion of that and i had a pie
chart i just looked at yesterday but i'm
sorry i don't have a very
eidetic memory but i'm pretty sure it's
close to 37 i know it's more than the
rest of the utilities
but as for your overall budget for the
the entire utilities you do have the two
months of reserve yes yes because we
operate as a joint utility correct
so theoretically
if this was to go down you i mean
because this is part of your overall
budget
so in essence you you kind of do have
reserves for this no and the reason i
say no mr mayor is because i can't
charge water customers to pay for gas
customers
okay i understand that but but you do
have a reserve though
for the whole thing for your whole
you know your entire utilities
department right mr mayor that's correct
but it is broken down to the money that
actually belongs to that individual
utility
so for example for yuri
the gas department borrowed over a
million dollars from solid waste in
order to pay that bill because they
didn't have enough cash on hand to do it
okay and i think what you were asking
about just general maintenance and and
upkeep i mean that that's
that's normal i mean that's a
responsible thing to do
so you're
you're assuring
the council that there are no additional
expansion of lines of any sort that's
correct and you'll see that in our cip
when it comes to council for our budget
for fy23
okay all right um i'll let council if
there's any other questions and then um
we'll let the other others that wish to
speak
so mayor putim and then there's so many
others um counselor
i mean when i looked there was no lights
so
okay
all right so thank you mayor and thank
you mayor pro tem for
for uh rationing out some speaking time
i appreciate that uh thank you to
director walsh uh for this for this uh i
know it's hard to make
information that's technical palatable
to
folks like me so i appreciate the effort
um
my primary question can we return to
slide 20 please
i suspect
okay so i suspect that part of the
answer is here but i need a little more
clarity
um can you explain to me the difference
between
small commercial versus large commercial
and the final bullet point there looks
like it refers to deca therm use is that
what dictates
what class
the customer falls into
thank you mr mayor councillor graham um
yes so it's decretherm use but more
primarily meter and line size so what it
takes to if i were to run the heater in
my house
all day long summer winter whatnot my
deckathorm use would obviously be
artificially inflated so it's more based
on the meter size and the line size to
deliver the peak demand to that customer
and as far as small commercial and large
commercial grant can i ask you to answer
that question i know you and joe worked
more closely with it and i'm missing my
job today
yeah thank you very much i appreciate it
grant raven with nugent strategies and
solutions we assisted the city staff in
this um this study um so the their the
zero to four thousand deca therms per
year it's an annual number is how the
small commercial classes defined there
are some other parameters around the
definition of the class that that expand
beyond that but that that's a general
rule for this defining small commercial
class
it may be worth noting that small
commercial for
a new mexico gas
company is a much larger
group of customers in other words you
can consume a substantially more volume
of gas and still be considered small
commercial for a new mexico gas company
than for the city of of las cruces which
some somewhat explains the the bill
comparisons here that you're seeing on
your screen it also just for context
if you're comparing this slide to a
couple of slides before you may notice
that the average bill numbers
seem different
this slide for comparing against other
utilities
specifically is just looking at the axis
charge and the volume charge the base
bill components it doesn't include for
example the cost of gas
because the cost of the gas commodity
itself can vary between these zia new
mexico us so to take that out of the
comparison we're just comparing the base
bill components so
thank you um
and to make it even easier for me to
understand uh
director walsh this might be you i'm not
sure sir if you're local or not to us
when i hear small commercial
i'm picturing
beck's
beck's coffee
they would be small commercial but how
big can you be
can you give me a give me a comparison
that i'll understand mr mayor uh
councillor graham absolutely and that
that is most of our businesses in the
city of las cruces i would say about 99
of them will fall in the small
commercial class
the large commercial would be like a
hospital or a
i think a large motel maybe or hotel a
really large facility we have industrial
users too
um like nmsu solar pack uh the cheese
plant saputo not solopex pudo at the
cheese plant
but um
most of our businesses are the small
commercial class
okay so when i'm considering the impact
on small commercial
becks and walmart
are going to be in the same
commercial class
and i'll apologize i'm not familiar with
whether or not walmart is what they're
using for heating for example heating uh
the facility so i can't speak to walmart
in particular i don't know how large the
gas usually they are but but generally
speaking most of your commercial
businesses will be small enough to still
be in this considered the small
commercial class is a
relatively small proportion of your
overall commit uh
commercial
customer class that is large enough to
be using more than four thousand uh deck
of therms annually uh on the system
okay and if i knew if i knew of a
particular customer
i'm trying i'm asking you to be
an expert on walmart but i think i'm
just trying to conceive of and i
understand this is probably more of a
gut reaction
asking a really small single owner to
to bear the same sort of burden as a you
know a national franchise just trying to
scope it out in my head
absolutely mayor councillor graham again
that's when we start working
partnerships for efficiency of efforts
you know if you are a small business
owner come talk to us uh i'll give
kudos to lucio i think he's out here now
he's our deputy director there he is
wave your hand lucio
he's actually just met with three
homeowners who are considered in a very
low-income area low-income
homeowners in a
older part of the town and just did an
efficiency survey with them for free to
say these are the recommendations you
can seal up your envelope you can
replace your appliances what can we do
to help you with that he's actually
kicked off a pilot program so we can try
that
that same service is existent for our
small businesses too if they'd like to
sit with us and talk about an energy
audit and how to best make them more
efficient that's where we're going to
see the savings because the less deck of
them you use the less you're going to
pay okay
thank you that's
that's the end of my questions for now
thank you mayor
thank you councillor quran
thank you thank you sorry actually that
was somewhat related to the question
that i wanted to ask um
in terms of reducing use but i wonder if
there's also
um the possibility of something like
small business assistance or support
very similar to what exists for
for individual residential customers
in this transition because it is
i am particularly sensitive to the fact
that inflation has affected everyone and
especially small businesses and this is
sort of an extra hit they survived the
pandemic and now
they're going to have to face something
like this and and i know that in some
cases doing things like cooking
with something other than gas would
really not necessarily be a feasible
option for them um
i'm wondering if there is a posit like i
i understand an efficiency on it and
those types of efforts but i also wonder
if there
are sort of um
similar overtures for for people in that
class to to be able to address their
sort of heating bills and
or their gas bills and
in ways that are not so
dramatically impacting them as as this
seems like it would um
just by this so
absolutely
mr mayor a counselor quran
that's an absolutely valid point and
obviously as a utility i'm very open to
any programs that the city council would
like to put forth or we can work with
community development on that i will let
you know our assistance program
traditionally has only been open to
residents
however during covet 19 you authorized
that to be open to businesses also so
it's not unheard of it's simply a matter
of funding it or determining do we split
those funds between residents and
commercial which we can do and that's
absolutely something that we can and
have done due to the pandemic and in
addition to that and that's one of the
reasons we're so far behind on the rate
class we actually paused this
during the biggest surges of covid
because we knew businesses were already
suffering we saw it when we were trying
to help them with utility assistance and
so that's why we're actually two years
behind where we want to be on bringing
this recommendation forth
thank you i appreciate it and i really
appreciate your presentation thank you
thank you mayor pro tem thank you mayor
thank you delilah for your presentation
um i always get so much out of it when
you when you present um
so some of my questions are around
employees because you said operationally
right this is where some of the money
needs to go so i have questions about
what what currently
how many employees do you have
how many vacancies do you have
what will in the next three years will
you try to do related to filling those
vacancies
and lucio i may call you up to speak to
your department numbers on vacancies if
you want mine stepping forth um i can
tell you again
i i wish i'd printed that out i just
looked at it on sunday
i believe we have 56 employees
57 i was so close
let's see if we could just address the
number of employees yes good afternoon
mayor council
uh in the gas utility we have you might
want to introduce yourself
lucio garcia deputy director for the
city of las cruces natural gas how are
you it's been a long time it's doing
well thank you
in our guest utility we have 57 ftes
full-time employees we currently have
three contract employees and we employ
eight temporary employees
so a total of 68.
six eight employees that are on the
ground currently on the ground okay and
then how many bacon
of those we have six of the ftes
that are vacant that just only six
vacancies wow
okay all right that's helpful so
then
would
most of the money if you got this raised
if we raise the utility rate be for not
only doing that but equipment and
vehicles and what would that look like
in terms of within the next three years
those vehicles that because you made you
made a comment delilah like it's just
like oh we're not
this would be really nice to have we
don't really need it it's mostly what we
are in need of correct
and so
when it comes to employees
at one point we actually had 15
vacancies in the gas utility and lucio's
work really well with our hr department
to make sure we get those full because
they're again they're highly specialized
positions correct it's one of the
hardest
position groups to hire for because you
have to be a licensed plumber or you
have to be a very highly certified
welder it's a dangerous system that we
work with
but what we do is when we have vacancies
as lucio mentioned we have temporary
employees we also have to contract with
polymers so no matter what we're going
to realize that expense in order to keep
the system going when it comes to
capital this is what we estimated
11 million for the operation and
maintenance which includes employees and
about 1.92 for capital
and
that's for the actual
purchases of large equipment and for
pipe and and things like that so the
large equipment would fall into that
1.92 million i can tell you for fy 23 i
think i only have 100 000 budgeted for
vehicles and equipment yes i remember
you saying that but can you give me very
specific things like
i'm i'm just i need you to build a case
for me that this is
warranted and i'm not sure that it is at
this point so can you give me specifics
in terms of equipment what is needed in
the next
right three to five years unfortunately
i don't have my
equipment sheet with me i'll pull it up
but lucy i don't know if you have
anything that you can add at least on
the fly
of the equipment we're missing
just because you're the one whose budget
i had to cut
afternoon against mayor council as far
as equipment we're talking about heavy
equipment for backhoes and vehicles to
get us to the job in addition to that
there's specialized equipment that we
utilize for maintaining the system you
know changing out valves using a
stopple
and the equipment required with it also
in addition to it i don't know if you
know this but one of the services we
provide that other utilities do not is
we maintain the utility part that's
under the
federal jurisdiction which is department
of transportation the other thing that
the council has tasked us with doing is
also providing relights so when our
customers lose
those types of
service whether it's due to an outage
or they smell co2
our technicians are licensed as plumbers
through the uniform plumbing code in
mexico cid to be able to go in and do
that most other utilities only do the
work on the utility side so that entails
minor equipment such as cig which is gas
combustion gas indicators when we do our
gas leaks and any probing that we do
throughout the house to check for gas
leaks
you know that's just a small sample of
the equipment that we would utilize
thank you so much i know there were some
issues with some neighbors down the
street and you all were so good about
responding quickly and sort of saying
you know this is not for us this is but
you do do that i know that there's that
service so i appreciate that yes we
cross over to provide that service yes
thank you
and if i may this is grant rape and
again with nugent i just to add on to
that answer in addition to the vehicles
and equipment that was discussed um
approximately a million dollars of that
1.92 million dollar number is related to
renewals and replacements of the
existing gas infrastructure itself not
rolling stock not equipment but not to
extend the system out to new customers
but just to
keep and maintain
the existing pipe that's in the ground
and
compressors and the equipment that's
running the actual
not equipment like mobile equipment but
like you know compressor stations major
equipment it's necessary to put capital
back into the system to keep those
things in proper operation and also
replace them on a recurring schedule so
that they don't become
um so out of date and so um uh you know
aged that they become an issue of safety
or you get behind and you have to uh you
know make emergency repairs to the
system more often to address emergencies
that arise instead of doing it a more
preventative maintenance type of pattern
so
i appreciate that delilah you made
mention two very specific examples where
we lost
pressure pressure yes ma'am and you
identified where they were and are you
do you have an idea that this is
something that needs to be replaced or
or rehabbed if you will so that doesn't
happen in the past and if if are those
more react like
those are things
places you know but what
how do you identify those that you don't
know and do you have a list of some sort
that you can present to council that
says these are absolute
um you know from
next year on these are the places from
priority one through ten that we have to
get done every year correct thank you so
much uh mr mayor mayor pro-tem
absolutely first of all we do do that in
the cip when we present it to you all
we've already outlined and identified
what our high priority areas are for the
entire utility and then of course it's
just based on funding regarding have we
identified it yes we do a moab i think
it's an analysis of our pressure in our
entire system so we actually have staff
out there checking pressure at different
parts of the city and lucio can you
explain that again
of how we do our planning uh for the
pressures and rehab
uh mayor pro tem uh lucio garcia deputy
director for natural gas in reference to
the pressure we do have a model we've
generated a model
which is a finite analysis model of our
pressures throughout the system so our
model has matched up with what we've
seen out in the field there are areas
within our service territory which are
outside the city limit because as you
know our service territory expands
beyond the city limits
and areas north of town towards delray
donjana are areas where we experience
low pressure as well as in the elks area
and the sonoma ranch and many of these
areas low pressure around sonoma is it's
being developed the infrastructure is
not there to support as you move along
until that infrastructure is built so
around the donaiana which is kaijitas
doniana community college we have
experienced times when we have zero
pressure there and that's one project
that was on the cip and the master plan
that's currently being done
thank you thank you so much um
delilah and then finally how old is our
system
oh i looked at that sunday too
1936 i was going to say 37 but we've run
we've operated the natural gas utility
since 1936. thank you i appreciate that
mayor thank you
thank you counselor como
thank you mayor and thank you delilah
you think i wouldn't have any more
questions but every time i'm in the
vicinity of lcu i learned something new
um
when you talked about the capital
projects that you had cut for
23 can you tell us what some of those
were that you cut and if that will have
an impact on customers
i know i cut out
del ray um because that was the only
project we were expansion
the delray in order to improve the
pressure and that's what lucio just
talked about but that was really we
rolled over about 1.5 million for
projects in process so that includes
like kiahitas and some of the rehab
projects that we're closing up this year
that we don't know if they'll be
finished by the next fiscal year so
those are rollover funds the really big
one that was in there was the delray
improvement and so that one i know i did
cut out i had already cut out quite a
bit
already
and really the only
ones were having to do with the pressure
improvements can you for the public can
you talk about what that means for
customers to have low pressure
so essentially when the demand goes up
i'm sorry thank you mr mayor councillor
benkoma when you have low pressure it's
typically in seasonal weather situations
so you don't have low pressure in the
summer nobody's making a demand on the
system but when we have those those big
temperature drops that we experienced
back in february
i guess it's still february but over
valentine's day weekend
as the demand on the system was pulled
in order to heat homes and and and pull
that gas to other places the places
where we don't have
either a looped system or we're backing
up with other pressures like the delray
area
that means gas will stop flowing and you
face the danger of pilots going out so
that's the biggest impact of customers
is they'll lose their their gas system
we hope they don't they actually turn
off their gas at the main rather than
allowing it to come into their home but
that's the biggest danger we face
is the pilots going out how many
customers do you think this impacts
how many customers
okay mayor pro tem
um as far as customers throughout the
city or service area or just that
specific that specific area lucio
the last one that we had uh well alps
which is in 2017 we had an issue there
we lost
about 500 customers
took a couple days to bring back online
on pegasus next donaire community
college it's a stretch of a neighborhood
so i'd have to say 80 90 customers okay
just off the cuff significant amount yes
20. one significant patient that's good
answer lucio
thank you
curious still on page 13 you talked you
spoke about
um operating expenses
is there a reason
and this could probably lead into a
whole other work session but is there a
reason that administrative services
can't be done internally at
lcu and
that would eliminate having you to pay
in the city
um
mr mayor councillor ben como
i'm not familiar with
why we couldn't i know ifo and i we talk
all the time when i complain
can i just do this myself but
there's not a prohibition or a reason
not to it's just something that we would
have to work through in administration
and city management to decide what is
the best use of our resources and i'll
give it to to our city manager when we
met with him over um
some of our like fleet repairs and and
whatnot
i'll tell you our fleet office they're
great they're like we're going to be the
best choice for you to make a repair to
your equipment so you don't have to go
to an outside vendor to repair equipment
we're going to be the most efficient and
most effective and most cost effective
choice so i don't think there's any
prohibition on it it's just something
we'd have to explore of really is there
a cost savings or not
and then it's behind you i think sorry i
was just going to contribute uh part of
our study again grant raven with nugent
part of our study was not to look at the
specifically shared services and
evaluate on audit you know that but
generally speaking so not talking about
your situation in particular but when we
typically look at other utilities that
are operating in this environment which
we would do a lot of work for music
utilities it's most often the case that
the city is able to do that more
efficiently than having the utility
staff up for those services because
there's there you know one city attorney
you know one hr you know being able to
uh incrementally just handle a few more
uh you know issues
on behalf of the utility tends to
over the broad brush
be more efficient than stepping up the
individual utilities again i didn't know
particular investigation of your city
but that's what we typically find that's
helpful and i don't necessarily think
this would remedy this situation right
but i just think ifo and delilah i think
it's worth
doing an investigation on what just and
just what i know about
hr the hr
needs of the lcu sometimes i do feel
like it would be best there again i
think i'll leave that there maybe for a
conversation later on i think mr mayor
councillor ben como
um one thing about our city manager he's
he wants to know who's doing it most
efficiently and give me a cost study and
and you demonstrate to me how we're
going to save money so he does challenge
us to save that money
okay can you thank you for saying that i
totally agree can you go to page 20
please
yes okay i'm having some
um
[Music]
con i'm having a hard time understanding
this graph delilah i'm hoping you can
break it down further for me so on this
bullet point you say that the average
las cruces small commercial the average
use is 16 deca therms for small
commercial is that what that says
yeah again this is a grant rate from new
gen just allow me since i was
responsible for putting this slide
together i'll i'll take responsibility
for what we're presenting here um so we
did use um a you know an average per
month uh user of 600 and i'm sorry 166
deca therms for the representative
comparison between
your utility and the neighboring
utilities in part because for example
new mexico gas has a small commercial
class that is so much bigger than yours
so we picked kind of a midpoint of your
small commercial class the reality is
the average small commercial customer is
using about a 10 percent of the amount
shown in this slide so they're more like
16 deck of therms per per month as
compared to 166 deck of thunders per
month so but but the reason we're using
this much larger volume for the
comparison is just because when
comparing to new mexico gas
it's it's difficult to make up an
apples-to-apples comparison amongst that
small class because small commercial to
them means so much bigger customers than
small commercial in the city
okay so then and of course correct me if
i'm wrong in understanding this but then
this graph doesn't actually doesn't
really show
the potential cost increase for an
average las cruces user then
so this uh so here's what i'm gonna tell
you when you show me that
graph that's a hard pill to swallow when
i see that for small business right and
so i'm curious about showing
a graph
that is more proportionate to
what an actual las cruces small
commercial would use so that people
don't faint when they see that
uh again great raven that makes perfect
sense and i guess i would direct you to
the
um
no i think it was on it
oh there you go yeah this would be a a
graph that would show you i think what
you have in mind which is so this this
graph on the right for small commercial
is showing the bill comparison for the
average uh small commercial customer in
the class which is likely more what
you're asking for yes thank you okay
this is much helpful much more helpful
um
it back to counselor graham's question
which i thought was a great question in
terms of the scope within small
commercial
is there a way for us to
to do different classifications within
small business like small business small
and small business large
because it feel like there is
an equity issue when we talk about
you know a small business that's
employing five to ten people versus a
business that's employing a hundred
people
sure and if i may again grant raymond
with nujin
i'm not going to respond on behalf of
the city about this idea but i'll just
give you my thoughts from an industry
perspective um
that that is seemingly possible i
without doing the analysis we can't know
for sure but my my gut feeling based off
industry experience is if you segregate
out the really small commercial
customers from the larger commercial
customers what's going to happen is
you're going to find that the really
small customers are even more expensive
to serve under the cost of service
analysis than what you have now
basically what you have now is the
larger bigger and and for a lack of a
better word more efficient users of the
gas system that are in still in the
small commercial class because it
includes a pretty large proportion of
your overall commercial businesses are
pulling down the average cost of service
for those very small customers so my
concern would be if you segregate out
the really small ones what i think what
you're going to find is the opposite of
what you're hoping for is going to come
true is it's going to show that those
larger customers you peeled out and put
on their own
their cost of service has dropped and
you've increased what we've identified
as the cost of providing service to the
very small customers in the class
interesting even though
some small businesses may already be in
residential areas right like you know i
appreciate delilah's example of
um you know one pipe could serve all of
these residents versus one pipe serving
maybe the one business down there
a lot of small businesses don't have
huge facilities right and the ones that
do i'm assuming are using more
gas
yeah and so uh
you can definitely pick out um
individual commercial customers and you
might get you know a different picture
or view of the overall class but um it
is true
that at least from a a a
you know the way the customers served
off the line from that perspective you
can have small commercial customers that
look a lot like residential customers in
that regard but i'll also point out to
you that in our cost of service analysis
in part because we've grouped those
small commercial customers along with
some other
larger
commercial customers in that class
the the identified cost of service for
small commercial
is lower per deca therm than residential
so just saying you know so they are as a
class
being treated and recognized as being
more efficient than residential
residential is a
slightly less efficient user of the
overall gas infrastructure
and so
it's because you have some larger
customers sitting in the same class with
small commercial that's bringing down
the cost of service for the class for
all of small commercial
i mean i feel like there this could be
worth some sort of research and
investigation doesn't mean we have to
act on anything right like it could just
give us a lot of insight on something
and i know zella you're literally
telling me i don't have any more money
for anything for me to be asking for
more studies but i just
because i hear you it might not
the outcome might not be what i'm
necessarily
thinking it would be but i think it
could
i don't know right and i just feel like
it would be worth looking into
so if i may one other thought that i
have on this on this topic is that um
you know
the the overall cost of service should
be a a guideline by which you
assess what rates should be charged to
customers but there is room for
um policy discretion uh within rate
design which is part of what you know
we're presenting in terms of issues to
you guys and so i guess what i'm
suggesting to you is
a
segregating out the customers into
different groups for the purpose of
calculating cost service may not
accomplish what you're thinking it might
but policy direction
can in the place of that and so i have
some more expensive
expansive thoughts on how you guys might
consider
policy direction
yeah right
no
yes possibly
um but but anyway that that would be my
suggestion to you if
you're that's if that's particularly
what you're trying to address
policy may get you there okay thank you
and delilah i'm curious if you can and
this might be a tough comparison that
i'm asking you for but
um given the current
storm rider
right in what that has looked like
for our builds both of all classes
can you give a comparison as to what
the current writer
looks like versus your one year two and
maybe your three or maybe to make it
easier just year three
i want to say we did it at 15 cents per
deca therm but i'm looking at staff
because i don't know offhand do you guys
remember what a rig writer was
the
let me let me look that up
and i apologize all my financial people
could not be here today
i think mr simpson was good enough to
volunteer at it i think it's a dollar 69
per deca therm is the current
surcharge so
it once that surcharge goes away
um it'll
somewhat mitigate uh the proposed uh
rate increases that are being proposed
and that if that wasn't your question no
i guess i'm asking like
so i have an impact how will we see it
differently how will we
feel it differently
so
it again it's based on usage and i
apologize i didn't have that number off
the top of my head so i appreciate the
input if it's at a dollar 69 per deca
therm so if you look at our small
commercial rate class the differences
between that three year implementation
and the current rate is much less than
the dollar 69 per decade because it's
all volumetric based so it's based on
how many deca therms you use so in the
instance of the small commercial class
if we were to implement the rate in full
they would see actually a decrease in
their bills
based on their and of course i can't
speak to cost of gas because that's
variant and based on the market for
residential they'll all obviously see a
a decrease of a dollar 69 per decade
that goes away in all the bills okay so
what you're saying so after the writer
what i'm hearing you say is
um with the gas rate increase it will
not it will look less than what the
increase looks like now with the storm
writer mr mayor councilman como yes for
all classes correct okay helpful thank
you and then just my last sort of point
here delilah because i appreciate you
you know naming
what it could mean to customers and
staff
your crews
if there is no increase right what that
means in terms of safety
and
i mean frankly the safety issues are one
of the biggest reasons to move away from
a gas utility right it is very
it's very dangerous right you have to
have a lot of training your staff have
to have a lot of training
but i do appreciate you saying that
because i think for me what was helpful
in the last rate review even though it
was just as difficult when we talked
about
waste solid waste that was really
difficult increase but it
literally trans translated to if we
don't do this increase like it could
mean your trash does not get picked up
every week right so i appreciate you
naming the very concrete ways in which
the no increase at all could impact the
system thanks mayor
councillor peter councillor flotus
thank you mayor and thank you delilah
most of my questions luckily have been
answered
but i did want to go back as we're
talking about addressing that aging
infrastructure and
as it's been pointed out there haven't
been any increases or changes which has
been great for a lot of people and
things but we know that has consequences
later on and we're here at these points
trying to make these decisions
when we are looking at
emergency repairs on average how much
more expensive is that than if we had
scheduled maintenance
mr mayor uh councillor steve
abate that that's an excellent question
i know from the utility standpoint
on our personnel calculations we already
know it's three times the cost because
we have to pay overtime call out
emergency traffic control we have to
bring in emergency purchases and
procurements um
i'll give you an example on university
we had a huge line repair
for our water line and it was easily
three times the cost had been able to
repair that line ahead of time so
lucy i don't know if you have a
an estimate on that
i'm just talking anecdotally
on the cost
yes
good afternoon mayor uh council man
cuomo i'm sorry stevie
uh yes the costar as uh director of the
delilah wash mentioned uh there are two
can you speak into the mic please yes
they can be up to two three four times
as much
based on uh you know emergency purchases
cost overtime and then bringing in
consult either consultants engineers or
uh contractors to assist
uh because many times we uh i don't know
specifically for water but for gas or at
times that we need to bring contractors
in to assist us with the repairs whereas
if it had been routine operation and
maintenance it would have been something
we could have done in-house on our
schedule
thank you i appreciate that and you know
looking
forward i do think that it's very
important to make sure that we
accommodate
scheduled maintenance and repairs as you
said it is a cost saving to our all of
the customers whether it's presidential
or commercial thank you mayor thank you
thank you councillor flotus
thank you mr mayor and thank you delilah
for your presentation you mentioned that
um uh lcu is 12 excuse me 11 years
behind
and if we agreed to this today
it'll still be
another two years before we see anything
so we're 13 years behind
why
are we 11 years behind in
and no i mean i can do the arithmetic
and figure out where the 13 comes from
but
why are we 11 years behind uh mr mayor
councillor flores that's an excellent
question and my understanding is the
reason was the quasi-judicial process
was so expensive
in the original way that we did rates
that would it was almost
i'll give an example one employee shared
with me that by the time we got through
with the water rate case
all the new revenue went to paying off
the rate case
and so it was just putting us in a hole
so my understanding is they were just
avoided it was we'll just make do we'll
just make do we'll just make do
until it came to an emergency under our
new strategic business plan however our
board has directed us to review rates
every four years no matter what and so
again we'll be starting this process
again with wastewater
okay so if we uh were to approve this
today um
how long would it take us to uh
we'd only be four years behind in two
after 13 years of being behind we're
we'll only be six years behind six years
behind
when will we catch up
uh mr mayor uh councillor flotus my hope
is we catch up within the next two
cycles that we stay on this uh because
they're difficult and
having to increase the rates to adjust
for 11 years worth of inflation is
highly impactful to our residents if we
can do this every four years and try to
get caught up and
make those transitions happen then the
impact isn't so much and it's not over
such a long period of time however i
would imagine in the natural gas the
next rate review is going to have the
energy transition plan in mind and
you're saying that that's in four years
yes ma'am yep so by by the time we have
a new transition plan in place we don't
know what that recommendation is going
to be how it how the recommendations are
going to be for our infrastructure or
what we're doing or how we're moving
forward how are communities moving
forward with renewable energy those are
a lot of big questions but i'd imagine
that transition plan and the demands of
it are going to be part of the next gas
rate review
okay so in two years we'll be
caught up
kind of so we'll be about four years
behind excuse me we'll be four years and
then two years from then we'll be two
years behind and then four years from
that we'll be caught up so we're looking
at what sixteen four times three is
twelve
fourteen twelve years canceled lotus yes
i think it would take twelve years and
but we're gonna have that picture of
energy transition to consider also in
that time period
okay well thank you very much ms walsh
thank you mr mayor
councillor karan i just have one more
question that i think sort of goes to
the questions that counselor benkom was
mentioning earlier but when i look at
the
when i'm thinking about budgets as well
as as values statements right i'm
thinking about that in this context
when i look at industrial
rates
bearing atta
uh
a fraction of the amount that small
businesses do it's troubling to me and i
wonder if you can explain why industrial
is is
has such a low
requirement in this in this calculation
or
um
it just i just
don't think that shows our values so mr
mayor councillor quran it's not about
values it's the cost of service and it
takes a lot less to serve industrial
because it's one big line running out to
them
and then remember an industrial user
uses the same amount of gas no matter
what the weather so i don't have to
build a line to meet your winter peak
demand months i have to build a line
that meets your demand period so it's
using the same amount it's a lot more
of an efficient user essentially and so
the infrastructure is a lot less but
i'll let grant give more detail on that
this is grant raymond nugent and i think
that's a very good explanation an answer
delilah
and that that really boils it down you
know the the very large industrial users
are more efficient users of the gas
infrastructure so when i say efficient i
don't mean they use less i'm saying
they're they're they're not peaking as
much on your system as for example the
residential customers that are using the
gas in january and february to heat the
home and then in august they're not
using hardly any
an industrial user will more typically
use a more similar amount of gas month
in month out and so the size of the
pipeline that you've constructed to
serve them and all the facilities that
go into serving that customer
they are
more they they are more efficiently
utilizing that infrastructure um on an
annual basis than customers that vary
their consumption from month to month as
seasons change
so
i guess i would ask a follow-up question
which is related to access versus volume
so that suggests that the access charge
is static
um
and related to their use
related to their
the infrastructure related to it but the
volume
changing the volume charge which we're
doing for every other class i think
um
keeping that steady i guess it's really
a little bit hard for me to understand
fair enough and i'll just
observe or add to that comment that even
though the volume charge shown on the
screen is per deca therm
these these volumetric charges are
recovering fixed costs of the utility um
so you're not recovering all your fixed
costs to serve that customer through
that access charge you're actually
recovering some of it
through the volume charge and there's
several reasons why you would structure
the rate in that manner
but that i think may be the disconnect
unlike the
the
the gas commodity rider that recovers
the variable cost of gas you're actually
recovering fixed costs inside of that
volumetric charge and that and that's
part of the reason that explains why it
may be counterintuitive to you that that
we're we're not adjusting the volume
charge
for that customer class
thank you
other questions
before we get to
the
their audience so i just have a quick
question so
i'm sorry the name of the firm was
nugent
and so
you hired them when
gosh
just
2016. but not for the gas rate room oh
but not for this great review um i
apologize
if i may again grant raven um so the the
original contract for the rate reviews
for the water wastewater solid waste and
gas engagement was signed around 2016.
we were just now getting around to the
gas portion of this we started the gas
rate review
almost two years ago i i don't know the
exact month but it's it we started this
a couple
over a year ago
more like a year and a half to two years
ago
and so i guess my question would be
so i presume there was some type of
report that was done
mr mayor uh counselors yes yes and so
was that report given to the
utilities board members and i guess i
was just curious why it couldn't have
been included in councils
mr mayor counselors it was and we
included it in the technical report
that's the 180 page document that you
received
from utilities
when did we get that
you got that last week
so it was in there yesterday my
apologies
okay i just wanted to make sure about
that
so there's nothing further now
please remind me who
is out there that wish to speak
senator hamlin and
maybe more
okay
so if you want to come forward you
needed how much time
three men
we're feeling a little generous we can
give you five if you like
mayor yes um was mr simpson given her
some respect
i don't see him oh there he is right
there oh wow okay
i'm sorry i only seen you once
i think he does have a presentation he
does he does okay mr mayor thank you
council it's so nice to see all of your
faces
here today my name is carrie hamblin i'm
here in my capacity as ceo and president
of the las cruces green chamber of
commerce representing over 200 local
small businesses
and indirectly thousands more including
over 3 000 small commercial gas
customers that las cruces utilities
serves i do appreciate the discussions
that las cruces utilities have been
willing to make uh regarding the
increase
it's been a very uh animated
conversation and very concerned about
all of the things that we've uh that
that delilah has already addressed
until recently las cruces utilities rate
payers were represented by a ratepayer
advisory board
a repayer advisory council rather which
has which was provided a consultant an
attorney to represent customer interests
including those of small commercial
customers whenever a rate hike was
proposed the provision was eliminated by
the council in 2016 leaving only the
city council itself to evaluate the
viability of the utilities case with no
provision for the detailed analysis that
normally accompanies utility rate cases
now the las cruces screen chamber of
commerce is proud to have filled that
gap by contracting with utility expert
philip simpson to conduct an analysis of
the current lcu rate request and he will
be giving a presentation to you on his
findings he has an undergraduate degree
in mechanical engineering from georgia
tech and a master's degree in electrical
engineering from new mexico state along
with the second masters from new mexico
state and economics with a concentration
in public utilities regulation
over the past four years he has been a
regular intervener in cases before the
state public regulation commission
mr simpson is accustomed in his work
before the prc and his hearing examiners
to rigorous examination of assumptions
and conclusions he brought this same
rigor to bear
on the case at hand and we're very proud
of the report and its value it provides
for council decision making
a particular concern to the green
chamber when we first became involved in
this process was a proposed
42.7 percent increase in gas rates for
small commercial customers to be imposed
as they struggle to emerge from a
worldwide pandemic that we are still not
out of i'd like to remind you a
difficult economy and the utilities
imposition of a rate rider for winter
storm yuri fortunately
and in large part a result of issues
raised during the rate request process
by mr simpson the rate burden on small
commercial customers has been reduced
there would be a phase-in of any rate
increase or no increase would be imposed
until the winter storm rider has been
removed
the utilities also decided to eliminate
the cost of taking on new debt for line
extensions a step that the green chamber
is very grateful for we support and
endorse
still though the current proposal of
33.4 increase in monthly gas mills for
our small business community is
unacceptable
especially for a city-owned utility
and especially when clear alternatives
exist mr simpson will point those
alternatives out as he reviews his
findings for you today and before i
welcome my colleague debbie moore to the
podium
you know doing a little bit of the math
is that
businesses can't afford these costs
right now
um the difference between what right now
the 194 dollars and 74 cents a month
comes out to 2 336 dollars and some
change every year
the 414 do i get just like another
minute thank you
i appreciate that uh the 414 dollars and
17 cents comes out to four thousand nine
hundred and seventy dollars that's a
twenty six hundred dollar difference
that is a refrigerator for a small
business and i want you to think about
becks willow and blaine indulgence cafe
salud de mesa downtown desert yoga any
of the small businesses that you all
frequent and i know you do because i've
seen you there think about these and
what would happen
to those businesses if a refrigerator
broke
if their plumbing or electrical work
needed to be redone if their stove or
oven needed to be fixed if they had
heating and cooling issues we all know
that during a time of challenge
especially financial challenge right now
that any one of these items any one of
these catastrophic items is going to
cost you at least
twenty six hundred dollars that could
make or break a business and
unfortunately during this time we have
already seen businesses close and my
colleagues with the greater las cruces
chamber of commerce the economic
development department with the city of
las cruces the lyft fund small business
development center west a number of the
arrowhead center all have worked
together to try and help our businesses
thrive and survive during this time
a gas rate increase right now is not
going to help them and so mr simpson
will be giving his presentation to you
but i would like to welcome debbie moore
my colleague with the greater las cruces
chamber of commerce to speak to you if
that's allowed
thank you mr mayor thank you council for
all your work thank you senator
appreciate it
hi debbie
i just need you to state your name
please debbie moore president ceo of the
greater las cruces chamber of commerce i
could say one big
ditto mr mayor i was going to lead in
with to several of the counselors
comments since march of 2020 when
coveted hit i've been in the trenches
with many businesses
and
they are just now coming out we are
definitely not out of covid and the
greater las cruces chamber agrees that
this is not the time i'm real concerned
about where we're going to be over the
next three years how this is going to
impact them so at this point in time we
stand in opposition to this i will say
this to delilah and her staff if this by
chance goes through we're here to help
get the information out to our small
businesses work with them see how we can
provide opportunities for assistance i
don't know the answers but i'm here to
i'm in the trenches with them so we're
going to get through this together thank
you mr mayor council
thanks debbie
so now we'll be hearing from phil
simpson
are you trying to lift that podium up i
am sir
i see it thank you
mr mayor councillors i really appreciate
that your
attention today and allowing me to
give a little give my presentation um i
just need you to state your name
i'm sorry for the record my name is phil
simpson phillip simpson
thank you
um i think
the council has
um kind of a difficult decision today
and i would characterize it as trying to
balance the interests of the utility and
the balance of
the customers let me let me pull up my
presentation
let's see
okay thank you
um
so as
kerry mentioned
the las cruces green chamber of commerce
commissioned me to evaluate the proposed
rate increase of 2.4 million
following the recommendation of that
report and consistent with the council's
direction the utility removed the debt
for new gas line extensions from the
rate increase and i don't want to lose
sight of that i think that's a wonderful
thing and i appreciate the utility being
willing to
make that
major decision to stop expansion of our
gas system and stop having
the customers pay extra for that
as
ms walsh mentioned that the current rate
request on the table is to increase
revenue an additional 1.5 million a
month she called it 1.46 million i i
rounded it a little bit
my issue is that and the green chamber
commerce issue and the greater chamber
of commerce issue is that that proposed
increase still
disproportionately impacts small
commercial rate payers
this is excessive imbalance and
unnecessary and violates accepted
principles of utility rate design
so i'm going to focus on
why first why this is imbalanced and
then a little bit on why i think the
rate increase is unnecessary
there's a whole lot of
commercial businesses that use gas in
las cruces
as ms walsh mentioned
the vast majority of those more than 99
are fall into the small commercial rate
class
unfortunately those small commercial
rate
customers will be hit with the biggest
uh impact by far
it's over 33.3 percent
and and they really small businesses
really need to be protected against this
uh unreasonable rate increase
so why do i say that it's unreasonable
so i want to talk a little bit about uh
the the rate allocation process i think
the important thing to understand here
is that there are
multiple almost an infinite number of
methods for allocating
the revenue between rate classes
it's
incorrect and misleading to say
that
one particular rate designed including
this one
is
that is scientifically correct because
there are so many options there are so
many judgment calls that get made
during
the rate allocation process during the
process of deciding who should pay
what amount of the revenue increase
if
if this case were before the new mexico
public regulation commission
this rate design
would not fly it would not go forward
the
i looked at the at three of the last
public regulation commission
decisions
in all three of those decisions
the rates designs were done differently
but
the commission
at the end of the process
adjusted those rates
because they understood there's a lot of
ambiguity
and as
mr rabin mentioned
commissions
and
council you have
you have at the option
of i think you called it policy
direction mr braven policy direction
it's commonly referred to as the
principle of gradualism
that you don't increase
rates on a particular customer class
much much more than another particular
customer class
and you do that to avoid
rate shock
so again the best practice is to
increase rates gradually
and
commissions including the new mexico
public regulation commission
make they go to extreme measures to
avoid rate shock to any particular
customer class
so i'll switch now to the other issue
you know
is a rate increase really needed
um
the data
i've looked at which goes through the
end of fy 2021 do not indicate a need
for a rate increase
my report showed that the
the utility had financial ample
financial reserves at the end of fy 2020
and that those reserves actually grew
in 2021 and i the next slide will cover
that
um
i know the utility did not really
appreciate that
analysis
and questioned the
methodology
however the
methodology
came from mr raven's report and i
noticed this morning that the
methodology is also outlined in the
the the last council resolution on rate
setting
so the
the minimum
minimum funds balance are actually
mentioned in there
uh
after that
after my slide that
showed ample and growing reserves
the
gas utility presented
cash data
which i will uh
i have a table on that that
so these these numbers in the middle of
the page are covered by that table
probably better than than here so i'll
go on to that
if you don't mind let me grab some water
so this this is the slide that
the
left two thirds of the slide came
straight out of my report
and then and the numbers
came straight out of
the new gen report
and as you can see
at the end of fy 2020
there
were about 3.1 million dollars in excess
reserves
because the minimum balance
according to the two months rule that
what came up a little bit earlier
was 1.4 million
the utility had about 4.5 million so the
difference is 3.1
in excess reserves
and what was interesting is that those
reserves appeared to grow significantly
more than doubled in fy 2021.
the
capital improvements fund
there's no target so there's no i can't
say these are excess
but it looks like at this point in time
there were
significant
excess funds
this doesn't quite
match what director walsh was
saying so and she may of course she has
more current information than i do but
according to these data at the end of
2021 there was
a very significant excess
reserve funds
in both the operating and the capital
accounts
so in response to that
slide
as i mentioned the utility presented a
slide
at one of the utilities board meeting
called a gas profit and loss slide
where they actually
showed fy2021 numbers
this is an excerpt from that slide
i didn't want to try to show that whole
table because it would have
gotten way too hard too small and hard
to read
but what what's
what's significant about this slide is
that the utility
characterized it as showing
a net loss of
2.75 million in fy 2021
the actuals column
but
that
really only occurs
with
the
excessive
non-recurring spending that occurred in
fy 21.
in fy 21
you you may recall that
the number of
923 000 is the number that needs to be
spent on vehicle replacement on fy 2021
they spent quite a bit more than that
more significantly
than that is the capital projects
the capital projects
the amount spent was about 3.7 million
and i don't think that was discussed
this morning but the
the
long-term
gas rehabilitation expenses
is about a million dollars a year
from fy15 to fy 2020
it was the average was 989 k a year and
in mr raven's
rate review study looking at what the
requirements should be for the future it
was pegged at a million dollars a year
and that's what this
this
amount shows
so if you take that net revenue
from fy 2021
and subtract off
the vehicle and capital spending
you come out with a surplus of 328
thousand dollars
so
the reason i think this is important is
that
1.446 million dollar
revenue increase
was really based on a revenue
requirements
summary for a test year
that was supposed to more or less match
so we have data now in front of us that
show what really happened
in fy 2021
and that was a surplus
now that's not to say that
expenses may increase in the future
but in fy 2021
there appear appeared
to
uh the spending appeared to be
excessive and without that excessive
spending there would have been a surplus
now when i say excessive spending let me
let me qualify that a little bit
because
for example
the major equipment vehicle purchases
that is a number that varies quite a bit
year to year
some years you don't replace a lot of
vehicles some years you do and this this
happened to be a year
when
a lot of vehicles were planned to be
replaced mr raven's report i believe
uh predicted
uh much more spending than than this 1.3
million
in
but his report also did a long-term
average looked at kind of the average
over seven years over four past and
three future years
and that average is where that 923
came from so i think we need to look at
you know the expenses going forward
so
why
i think it's worth asking why we think
that
um
the prediction for
fy21 was wrong why were expenses lower
and i think
one of the major things there one of the
major factors is
is uh
personnel
and specifically salaries
you may recall seeing
the slide that showed
o m expenses going from 10 million and
to
11 million in 2021
it turns out that that didn't really
happen
the expenses o m expenses stayed
constant and even went down a little bit
and i could we could bring up the
the whole table to see that
but basically the o m expenses went down
in 2021
that's that's not to say they may not go
up in the future
but the data
that i have
indicate that there's no need for a rate
increase
so
um
what are what are the alternatives here
for the council
um
the
the easiest thing to do is if you think
no rate revenue is needed
vote no and and no no further action is
needed until after we figure out what we
need to spend on the
energy transition plan and road map
if new year new revenue is justified
i think we need to apply the principle
of of gradualism
to limit the maximum increase
to 20 percent for example
you could limit it to 10 percent
on small commercial customers
and you could do it in a couple of ways
you could do it by shifting costs
between rate classes
and in this case what you would have to
do
is increase
rates on residential customers
very slightly to to make a big
rate decrease
on
small commercial
and that's
you know that's not
politically very pop popular to do that
so
the another option would be to
just reduce
the overall revenue increase
by by the same amount instead of
shifting the the
revenue increase
over to residential just decrease the
overall
revenue increase
you know if you decrease it from 1.5
billion into 1.1
you could cap that small commercial
rate increase at 20 percent
so
this is the last slide in my main
presentation actually i have a whole lot
of backup slides that i figured there
probably wasn't time to get into the
details but we can do that if
if anybody has
questions i think you have that package
in front of you if you have any
questions about that i can answer them
but
you know the recommendation of the green
chamber of commerce is that
because the immediate need for new
revenue has not been clearly
demonstrated don't approve the rate
increase at this time
use the current revenues
to maintain the existing gas
infrastructure for safe and reliable
service
and we would say approve the
decarbonization rider
and start using it to cover the cost of
the energy transition plan and roadmap
if you'll bear with me i would like to
address a couple
of a couple of points that were made
by director walsh
the
she talked about
salary and benefits
going from 2.44 million to 3.05 million
and
i guess my question
would be if that is a
past
or actual expense or a
predicted expense because it looks an
awful lot like the
600k
that i identified in my report as being
associated with filling all the
vacancies in the department which is
i know
mr garcia has done a great job in
filling vacancies but it's
virtually impossible to fill all
vacancies so when you fund
the whole system including all the
vacancies you're you're kind of
funding more than is necessary
um
one of the one of the other things that
was mentioned was
you know we're going to go to
electric vehicles
and an f-250 goes
was depicted as going from
35k to 60k
and that was
cited as a reason to increase rates
well i would i would note that's already
built into that 923 000
for vehicle and equipment replacement
that analysis assumed that
an electric vehicle costs double what is
replaced
so this if it goes from 35 to 60k that's
actually less than double
so that's a little bit of savings
and not an increased cost
i also wanted to comment on the
comparison with new mexico gas company
i would note that
new mexico gas company is a for-profit
corporation
they need to earn
at least 10 percent more than
than
a non-profit municipal utility to pay
their shareholders
you know so
and and then when you look at it and you
see that
small businesses
a small business in las cruces is
paying 414 dollars
where a small business and a new mexico
gas company would pay
what was it 200 or 277 dollars in others
las cruces
small commercial customers are paying
much more
than
a for
profit
gas company
and i realize it's there's differences
between the the rate classes and the
sizes of the rate classes
but it just seems exorbitant that
the
small businesses in las cruces should
pay so much more than the small
businesses
in albuquerque
and the residential rates are virtually
the same
if you remember that graph
so again i think there's
there's some
real adjustment that needs to happen
to these rates
and i would be happy to work with the
utility to
come up with
alternate methodologies for
making these rate increases more
equitable and not hurting our small
businesses quite so much
if the council thinks that some
revenue increase is necessary
um
but again i think that that is
questionable
and i would also note that
the council could
through policy direction
just choose another number instead of
1.46
cut that in half
you know there's
it's uh it's a complicated
process but
i i think that in order to balance
the interest of
the community and the utility
we do need to make some adjustments to
this proposal
and with that i'll stand for questions
thank you mr simpson
councillor beta thank you um and thank
you mr simpson um for the presentation i
actually have a
a clarification point that i need from
delilah if that's all right first
something that was mentioned by one of
our speakers before
was that there was no
advisory group
however i know that on our board we do
have a utility
customer advisory group it looks like it
is active and has
um one two three four five members
they've met in november from what i'm
seeing here is that a different function
that what than what was talked about
earlier or is it the same thing
it it it may have been intended to serve
the same function but it certainly did
not i intended several of those
you cag meeting you do these customer
advisory group meetings
um
and and my correct collection is that it
was
um
essentially convinced them that no ring
increase was needed
through a presentation similar to this
one but but different
um
but they did not have any
power to
make that recommendation
um
in other words from my perspective i
think that
the
former process may have been too
litigious and too expensive
but
there was under that process there was
some balance there was
two sides to the process there was
some give and take
so i i think that
to answer your question no the uk does
not fulfill the the process of the the
former
i think it was a rate setting advisory
committee
okay thank you and
yeah sure
and thank you mr mayor uh councillor
betha that's correct when we changed the
ordinance it was the uk that stepped in
to be the representation of public input
and so prior to that there was an actual
rate case process where you have a
quasi-judicial process where there's
arguments submitted and testimony and
negotiations and so the uca did serve it
as that uh entity and mr simpson did
just mention as
when he presented
his arguments to the uk they were under
consideration um their recommendation
came to the board
to have that phased implementation that
was one of the big changes as well as to
remove the line extension so they take
all the customer input and then base
their recommendation to the board on
that
so okay so that advisory board did make
adjustments that we saw reflected here
today correct okay thank you and thank
you mayor
thank you council servant cuomo thanks
mayor um and thank you mr simpson i
don't have any questions for you
actually i just have a couple statements
i want to make but i did want to thank
you
um and the folks who spoke on your
advocacy and getting us here i think
that's incredibly important
um
i'm gonna be really frank i feel like
um we're now in a situation where
um
you know to center hamlin's point
on the small businesses i do think about
those small businesses all the time
nessas and amaros and
le rendezvous and sassy grass and i
could name more and more and more
because to me they're not just small
businesses or families right so i do
think about them all the time
um and i feel like we're now in this
position where
if we approve a gas increase it'll be
seen as an anti-small business decision
and if we don't improve an increase
um that's asking the people responsible
for an entire utility
to potentially put the gas utility in
jeopardy
causing
issues for thousands of las cruces and
thousands of customers
and
i
in an ideal world
we wouldn't need a gas utility
but the reality is that we're not there
yet we're not even close and the fact is
that the people who are gonna carry the
biggest burden of that are low to
moderate income families people who
cannot afford small businesses as well
who cannot afford to electrify
and i feel like that's been missing as
part of this whole conversation and
we're not really taking their interest
at heart here and i really hope that
i really think it's important that we
come
to
a middle ground because
um
so just for me
i would not support residential
the residential class subsidizing for a
small
for small business
and i do and i do see the considerations
here that graphic is really scary time
for small businesses it's been
incredibly difficult for vulnerable
families for small business through this
pandemic
so i really do hope that we're able to
get to somewhere in the middle mr mayor
i don't know you know beyond this work
session i don't necessarily have any
other
options here i just really hope that
if we don't feel comfortable with this
option and this recommendation that we
come to meet somewhere in the middle
because i feel like that's what's
clearly needed an increase is clearly
needed
how much
you know i think that's still
and who does it impact the most i think
that's still up for discussion
um but i just wanted to note that
because you know
it's a tough decision it's tough place
to be in up here right the
the shepherds of an entire gas utility a
public utility that is a really hard
place to be and i am sure delilah and
lucio have lost sleep over it i'm
certain of it
just like i'm certain small businesses
have lost sleep over how to pay their
next monthly bill right and i think we
can take all that into consideration and
come up with a solution that
maybe it doesn't work for either don't
they say that that's the best solution
the one that doesn't work for anybody
but at the end of the day mayor i just
wanted to make that statement because i
just felt like that really needed to be
named thank you
council flores uh thank you mr mayor and
thank you for your presentation mr
simpson um
that the one question i have for
everybody up here
is aren't we in a mode to
leave
natural gas and to electrify
and if it's going to take at least 12
years to correct the problem we're in
now
and we're looking at
being
you know climate change
on schedule
well that's beyond
well 12 years would be 19 what 34.
so then a year later we'd be electrified
all of a sudden we'd be green so
my question is is this
we're moving towards electrification
my understanding is that any
any gas lines any
any money that's being spent on natural
gas
is only for replacement lines not for
new development
so a lot of the presentation
by ms walsh by director walsh
was based on
the the of course it took into account
what exists in terms of quote the whole
financial hole it's in
but prospectively in terms of uh new gas
lines going in
so
um i i'm um i'm opposing i'm opposing
the rate increase on those grounds
to say nothing of course of the inequity
there is an equity when it comes to the
smaller businesses and
and i really want
i i mr pili this appeal is to you
to have in the future to have
all of our directors
or you know any any presentations made
to the city council to be consistent
with what our policy is and that's to be
green
as much as possible to electrify
so
i want to thank you mr simpson and thank
uh
senator
hamlin for for being here
and
and i appreciate your perspective mr
simpson and i think that
um
i think that if we if i think that if
we're 11 years behind now i'm
still swimming i think that we can deal
with alternatives um
and um
and proceed according to our policy to
electrify and go green and not to
put in new lines gas lines
um natural gas lines or
wise but
thank you mr mayor and thank you mr
pealey thank you miss
and thank you mr simpson
mr mayor councillor flores if i could
address that i do want to reiterate the
gas rate review that we're proposing now
does not include extension of the gas
system it's only to replace identified
uh infrastructure so we've already
identified its schedule for replacement
so there is no expansion of the system
included with this rate review
okay well that and may i say something
about that
um
my understanding is that the city my
understanding is that our policy as a
city is to electrify
and uh nichols larry nichols director
nichols of community development and and
some of his folks have spoken to that
and how um
and and people
maybe just my circle of friends are
talking about how to electrify and uh
and it is very difficult some people who
are like you know the tesla drivers and
everything you know solar panels and
um are still finding it difficult to
change their water heaters you know
get them but i i think that to support
this today means that we're not we're
not really serious about
electrifying electrification and i feel
very strongly about that and
[Music]
and thank you miss walsh and thank you
again mr mayor
and mr mayor councillor flores to speak
to that to the electrification of the
city that is something that's been
called out in our climate action plan
which is why resolution 153 is so
important the one that the council
passed which is energy transition put
forth a fl a plan
so this happens and it's equitable
because let's say you don't fund the
system anymore and you don't want any
more symptom system growth but you can't
get certain parts of our
city switched over to electric fast
enough or what do we do are we just
abandoning those customers and telling
them well you know
we can't repair it because eventually
you won't need it again and that's not
and and i really admire what you put
forth in resolution 153 because you
asked us that as a council you said we
want to get a transition away from
fossil fuels we want to encourage uh
lower carbon emissions in our city but
we also want to consider equity and
impact to our citizens and particularly
to our low to moderate income citizens
and it actually calls that in the
resolution saying do this responsibly
because if i could turn off the switch
tomorrow for fossil fuels we'd all do
that um unfortunately it's just not
possible there takes more infrastructure
to be in place there's a lot that has to
be planned um like you said just simple
upgrades to a home to have the right
kind of power coming in in order to
electrify that's necessary and that
doesn't exist in our lower income homes
in the older parts of
the neighborhood
and then regarding the the equity
comment i do want to mention
yes this is a big change for the small
commercial business class but the equity
that or the in equity that exists is
prior if you if you don't change the the
structure is your residents are
supporting that so you're telling your
residential users
um
you're going to support
uh because if we if we don't change this
and we don't make the adjustments that's
exactly what happens is our residential
uni users will end up supporting this
the commercial class
and so
i envy you on that decision because it
is difficult it's very you know you
telling business owners
sorry we're going to have to implement
the rate this is the cost of delivering
the service to you and unfortunately
that means they'll have to raise prices
at one end at some point the citizens of
the loft cruises have to pay for
services and it could be
my muffin costs a little bit more
because of this
in order for the small businesses to
survive i don't know the answer to that
that's a completely different economic
picture but you're correct it's it's a
tough tough position for all of you to
be in
justice
i just wanted to point out i do think
that it's important to include the
decarbonization writer as a separate
component of this rate review i think is
part of the conversation and i do think
that's on the
would be on the agenda with when we
consider this as part of a resolution
which i think is aimed at sort of what
you're articulating
in terms of those things but i
i
sort of just want to elevate
counselor ben coleman's comments i think
that
that there is kind of a
it is a shock to me i understand rate
shock is an official term but third
33 increase seems like a shock to me as
someone who hasn't seen this inequitable
distribution in the past as being on
city council and knowing that that might
have been part of the rate review 12
years ago when 11 years ago whenever it
happened
i do i would ask very strongly for a
compromise position that reduces the
the rate increase and doesn't shift that
burden to residential folks but also
doesn't
disproportionately or
perhaps proportionately in a historical
perspective
impact small businesses especially at
this time i think
i know it's kicking the can but and i
know that we do have to pay for services
but i really would like to see
a reduced impact on those on those small
businesses and in the resolution that
would come before us so
elsa
thank you mayor um
i also
believe that that perhaps a compromise
couldn't be reached but i am looking at
kind of historically since i've come on
council
myself and counselor ben como have seen
these increases in different areas that
have to come back to us and what i keep
hearing is that these things haven't
been done in 10 years or 20 years and so
that tells me that we haven't had a
perhaps the
a system
which is probably easier for the
residents and customers and users
to have gradual increases so we're not
going to these big extremes all the time
or it feels like that way so looking
forward if we can have you know perhaps
some guides or guidance on like a
20-year or 30-year scope and so that
we're knowing what to do i think that
would be very helpful and good for
businesses and residents to prepare for
uh mr mayor councillor beta absolutely
and that's exactly why our board even
said you have to start reviewing these
every four years you can't let it go i
know
for those of you who were here when we
had to increase the water rates so
significantly that was a tough decision
it was really really difficult to put
that on our system users but
we can finally
invest in the system again because of
that yeah thank you so delaying you know
delaying this not doing any sort of
increases only extends
what will have to be a fix later on and
we've had some significant changes i
know within the budget from personnel
which was done rightfully so for changes
for insurance and making sure we're
paying equitable wages plus you have to
fix a system those are costs that we
can't get away from and so we're going
to have to budget for that
and so if we can find a compromise
perhaps in some way but also look
and i think this will be our challenge
is to look really closely
at those expenses and then recognize if
we under budget and we have to do more
emergency repairs if we have to do
different items like that it will be
more expensive for the user in the long
run
thank you mayor
mayor pro tim
thank you mayor
thank you mr simpson for your um for
your presentation i have a couple of
questions for you if you don't mind
delilah thank you
yes ma'am
mr simpson you spoke of the principle of
gradualism
and i'm um and then this
notion of rate shock right
and earlier i thought i heard that
residents have more consumption gas
consumption is that from your
perspective and what you've seen
accurate
than the small commercial they have more
consumption as a class just because
there's so many more of them there's
there's about thirty nine thousand
uh
residential customers and about just
over 3 000 commercial customers
so as a class they have a higher
consumption per customer
the
small commercial class has a higher
consumption
okay thank you thank you for that and
so
so based on that and your expertise and
experience com going to these meetings
attending the board and and such and
maybe this is
i'll also ask the same question to
delilah i've i've done some research and
i just know just enough to be
not very
helpful i'm sure
it's not my area um but i get the i get
the feeling that we
that
there's all these principles and
theories related to a public utility and
when there's opportunity to or
because it's out of necessity to raise
those rates there's certain theories
that are applied and i'm not sure that
that's
what goes on um at utility the utility
board like do they have okay these are
our principles we're going to stick with
them when we did made that transition
from the quasi right that
quasi-operational component i don't know
that as a council and i was here when dr
garcia presented that i know that wasn't
council's direction to them these are
the principles as policy makers we're
going to utilize when it comes time for
you a rate increase
now from your perspective are they
operating under those certain principles
and i'm not aware
uh thank you councillor
i think that
they don't have the resources to to
operate
and apply all those principles
the utilities board had a work session
and discussed this for
i think two hours
i was allowed to speak for 10 minutes
at that session
but in contrast the el paso electric
raid case
that went on for
many months there were literally
thousands if not tens of thousands of
pages of documentation that were
prepared there were eight full days
i believe of
of hearings
before the
you know with different witnesses and
and lawyers
before the hearing examiner
and then she had i think about six weeks
to write her recommended decision taking
everybody's written and oral testimony
into account
so
and and she certainly had the resources
and the time to apply rate making
principles because they were they were
described to her very extensively and
she has experience in that
realm
but the utilities board
did not
have that same level
of experience and that not that same
level of information and certainly not
the same level of
balanced information from uh different
sources
where
the the rate
the revenue requirements for example are
able to be questioned
and the assumptions challenged and
numbers
adjusted accordingly
thank you thank you for that i
appreciate that
thank you mr mayor mayor pro tem and
that really does outline the difference
when it comes to the process and what we
do we follow the ordinance passed by the
city council
and
and that's where we start and so
this process started back in 2016 making
those adjustments from that
quasi-judicial process to what we do
today which is
just identifying the cost of service to
each rate class and then applying that
rate to them absolutely thank you
delaila i appreciate that
um
you made so i
in some of the questions i asked earlier
were
mr simpson from these these areas that
that utilities is indicating need
rehabilitation or or maintenance
probably more rehab because they're
lower pressure from your perspective as
a utility expert
do we have the the funding available for
that
well well it appears that we do i mean
the data
that i've seen is from
fy20 and fy2021 and that data indicate
that there is
surplus revenue and surplus
reserves
director walsh
gave some numbers
verbally that
indicated
that there were not
very large reserves
but i
you know without seeing those in the
context of budgets and comp you know
comparing expenses and
revenues it's hard to evaluate
anything other than you know having
the complete context and the picture of
the whole years of
expenditures
thank you thank you for that
can i um
address your earlier questions about
about principles about rate making
principles
as i mentioned i referred to earlier
there's really no scientifically correct
way of allocating
rates and and that's because
there are a lot of
uh
principles that are sometimes
contradictory and there's
there's good reasons for thinking about
things one way or another in this case
what the utility did and what the what
mr rabin's company did was assume that
all
the
expenses for distribution were based on
demand
and
that's
not really a common way of allocating
the rates
you know in my
nmsu class we did
four different allocation methods for
distribution costs
and 100 demand was was not one of them
new mexico gas company
they did not they allocated 39 percent
to customer and 61 to demand so that's
not the way
they did their design either so
what i'm suggesting when we talk about
small business customers being
subsidized by somebody else that's
really only if you take this one
particular
narrow interpretation
and methodology of allocating rates
you know in that so it's it's really
kind of a stretch to say that
that
small businesses have been
subsidized by anybody else in the past
i think that's also why
if you look at the rates
the current rates small businesses pay
quite a bit less than residential
and then in the future rates under this
proposal
their rates go up
um
you know it's what it's quite a bit more
than a dollar a deca therm while
residential rates stay the same
so that's that's sort of hard to
uh
hard to digest
that in in my contention is it's really
kind of due to
a
sort of
somewhat arbitrary
rate design
and again i think that needs to be
fixed whether that's through
a totally different
allocation or perhaps an adjustment that
just sort of
you know chops off the top of that
expensive rate increase on small
businesses
thank you mr simpson
um yeah
i
this is really tough this is hard and i
can i can appreciate everybody's
feedback here on council and what i've
read and and the present presentations
um
i we talk a lot about equity here and i
i know that um a good portion of our our
community are in poverty and this is
gonna
it's it's going i certainly don't want
the majority of this rate increase to to
hit our our residents nor our small
business
but i don't know that they're out there
they're not the same right they're up
there's apple and oranges and so some of
the slides are confusing because there's
all this other stuff just like you've
mentioned right
and and i hope that's not by design but
i i certainly am very concerned about
when i hear things like low pressure
especially in areas um i love mr garcia
when you said one customer is too much
when you don't get the service that that
that you need absolutely i i agree with
that but i also feel like council is
given a mandate and and i feel
about about um
you know our climate
um
reform and and things of that of that
nature that
i feel like i'm i'm really wanting more
information i i really feel like we need
the energy transition plan before we
make a decision um and and i i think if
we could get that within the next 18
months i don't know how
how feasible that is but that's
sort of where i'm leaning before we make
a decision
um like this um
and i and i agree that if if that's
something that we can work on but also
compromise and and your number two slide
mr simpson is
something that we might
consider um
it
and that's sort of where i'm where i'm
i'm headed um frankly
um so thank you mayor
okay so let me just ask a couple
questions
probably of you or delilah
so
i can't remember when it was i know it
was scheduled for ifo delilah yourself
and me to we had a zoom but
was that the ending of the year or
beginning of this year i believe that
was the end of september
was it that long okay so
there
uh i don't think so i don't know but
there was a there was a
document that
that was given i think you gave it to
the utilities board
and it was dated on 11 15
2021 and in there
you had gas development line extension
and you had a lot of money and and i
appreciate you taking it out because
that's what
the brunt of our conversation was i
think that's what council is talking
about
but can you recall
what um
what percent you were asking for back
then was it the same
as it is now
no okay
mr barrier i believe the those expenses
have been removed so the percentage
increase went from 22 down to like 14
overall
revenue
well no i'm talking about the rate
increase
yes sir the the rate increase is a
little harder to
it
it sort of depends on how you look at it
and whether you include it whether
you're looking at a monthly bill impact
but
in terms of
the overall
revenue
the overall
rate the overall revenue increase which
means which equates to overall rate
increase
was 22 percent and now it's like 14.
it has been reduced because of the gas
line extensions
do you concur with that
mr mayor yes sir
i believe the small commercial at the
time was close to a
gosh almost a 40 increase recommendation
and this dropped down 45
yeah it was it was 40 45 that would have
been the rate recommendation had we kept
all those extensions in
however we did remove that
right okay so that so it was 40 to 45
see i couldn't find that i i found the
documents you're talking about
but i couldn't i couldn't remember the
on this other handout that we had
because it was dated on 11 15. so our
meeting had to have taken place after
that it couldn't have taken before that
yes sir you're right i'm i'm not sure
what i'm recollecting and the number is
was
42.7 percent
average bill impact on small course now
it was 35 and that was what you were
wanting to be phased in over three years
at that time so okay so
um and now you're you're you're
requesting thirty percent mr mayor
that's correct over a three year time
period over a three year time period
okay so that that's what i wanted to
clarify because i was looking at the
paper the documents that's that was sent
it was by it was sent by christine and
not by you so i'm sorry about that so if
i i was able to find that there so i'm
looking at it and and so
and yes you're right there is no gas um
extension so that's good
and and i think after listening to my
colleagues here so you're saying um the
model that you have presented is based
on 30
there's nothing that
that shows what it would look like if we
were to do
i don't know 21 which is basically seven
percent each year that that
that's not feasible
mr mayor it's something that we could
present to you if you want us to do
those calculations on what the revenue
would generate
well i think i think what what i'm
hearing at least that's what i thought i
heard from my colleagues is that i think
they recognize the need um and i think
you've clarified that there are no gas
extensions which is good
i think
mr simpson this is yours right here
right where it says maximum reincrease
of 20
or
who wrote this right here this
alternatives for consideration
yes sir that that was my uh sort of a
compromise
and so i just rounded it up to one
percent so it makes us even seven
percent each year instead of ten percent
so that's nine percent less and what
what is being asked for by utilities and
close enough to what you had suggested
and i don't know if it's something that
my colleagues would support
but i think if um
that's a that's kind of a compromise
it's not like councilor bincomo said
it's not like exactly what you want it's
not exactly what we wanted but it's
something we're in the middle
thank you mr mayor and i would like the
opportunity to respond to mr simpson's
report once we have a chance
please
so grant rabin with new gin strategies
and solutions again um first of all just
a few comments on the discussion that's
taken part so far um just for clarity um
you know the the roughly thirty percent
increase that we're talking about for
small commercial is not a thirty percent
increase in the bill we're talking about
a subset of the bill that is the base
rate portion it doesn't include the
glass commodity which is you know a big
portion of the overall bill so the bill
that the customer receives is not going
to go up by bad percent a portion of the
bill is going to go up by that
percentage under the proposal so
important to keep in mind for context
in just a few notes you know i know
there were some questions raised about
what a commission
might do
in my experience commissions rely
heavily on cost of service as a guiding
principle amongst other considerations
but the driving to cost of service is
often one of the major
guideposts they use for decision making
i also say that it is substantially more
common for a municipally owned utility
to endeavor to use a
process like what we have used here or
something even perhaps less formal than
this to review
utility rates i only know one other
utility in the country that uses the
quasi-judicial system that you guys had
previously used 10 or so years ago
that is
very uncommon in in the industry in my
experience
simpson did comment on the financial
health of the utility um and i guess
some of his comments uh on the reserve
balances i think are influenced by um
by
an accounting number versus a cash
number i think miss walsh can tell you
what the cash balance available to the
utility is
currently at this time
it looks very different than what the
accounting basis numbers that were
previously being looked at
on the slide um another thing that is
important to keep in mind um mr simpson
did rightly point out um you know what
happened in fiscal year 2021 compared to
revenues
critically from my perspective is the
question of whether or not the spending
in fiscal year 2021 was sustainable for
the utility
and ms walsh has made a contention that
it's not sustainable i know that they
they were required they were needed to
reduce
funding or spending in order to
right-size their spending to the
revenues that were coming in
that level of spending is not
sustainable to keep the utility
operating in a safe and efficient manner
even if there is going to be a time when
the gas utility is is turned off
that time is not tomorrow and and
between now and then you have to be able
to provide safe
reliable service to these customers and
that requires you to be able to make
these investments into the utility on an
annual basis and not defer maintenance
and investments in the system because
the funding is not there
you won't be able to make it to that
eventual end state
in a safe reliable manner unless you
maintain the utility appropriately
with what you have and i'm very
concerned that a decision to mitigate
what has already been a reduced
request from the utility is going to
threaten the ability of the utility to
be able to maintain that system in a
safe and reliable manner as you
transition to whatever your end state
would be
the uh mr uh simpson did make an
observation about the methodology uh not
being set in stone or what there being
one particular method utilized for
developing cost of service and that is
true
there is more than one way to develop
cost of service
in my experience the reason that some of
the other methodologies are used like
minimum system or some others that might
be endeavored to do is sometimes in
recognition of lack of data available to
be able to make the proper analysis
and to utilize those other alternatives
the the methodology that we employed to
be able to assess the cost of service
for this utility in this process was
predicated upon the cost of designing
and operating the system
to meet the peak demands in the winter
months for all the gas customers that's
the cause the the utilities represented
to me on many occasions in many
different ways that they are operating
and investing in the system to be able
to meet the peak demand in the winter
months so we're assigning costs to
customers based on that peak demand that
is connecting cost causation with cost
allocation and in my opinion is the most
appropriate way for us to be able to
to develop the cost of service
mr simpson did rightly point out
the concerns over ray chalk
and so
that it is
it is certainly true that you need to be
concerned about rate shock and the
gradualism of increasing rates however
we have the utility has already
allowed for a gradual plan of increasing
rates gradually over three years
instead of all at once
it's going to happen after
the dollar and 69 per deca therm
surcharge that customers are paying
right now goes away so even at the
eventual state i would suggest that most
customers are going to see a decrease in
their bill compared to what they're
paying today
on that gas bill so the the arguments
about gradualism
fall a little flat for me in recognition
of the three-year phase in and the fact
that they're paying higher bills now
than what they would be paying under our
proposal
so i think at the end of the day
the the
the governing board of the utility
needs to make a determination about
whether or not they are going to
charge
what is the identified cost of service
to each customer class
and it is a policy decision for you guys
to make but if you but
and there is certainly a
recognition of gradualism and a pathway
to get there eventually not all at once
all today
but if you're not going to eventually
get these customer classes to cost of
service which part of the reason why
small commercial has such a big distance
ago right now is they're so far from
cost of service to begin with
if you're not going to eventually move
them to cost of service
you in my opinion you need to make a
policy decision that says we're not
going to put you all the way to cost of
service for various policy reasons
and we identify where's the funding
going to come from to make up the
shortfall
so it is in my view completely
acceptable for you guys as a body in
your purview to make a decision to not
take customers all the way to cost of
service but in my view it's also
incumbent upon you in that eventuality
to identify who's going to pay more in
order to accommodate
that policy decision
and my last comment is i think mr
simpson made
a a comment about arbitrary nature of
the rate design and i would suggest to
you that the most
arbitrary of rate designs is the one
that's not tethered in some way to cost
a service the cost of what it provides
the cost of what it
costs the utility to provide service
should be
the guidepost by which you can determine
what you should be charging customers
and so to not be connected or aligned
with cost of service would be in my view
be the most arbitrary great design of
all
okay well thank you for that um so let
me just share with you
some some comments that you know i was
holding i was reserving for a bit until
i could clarify whether or not and and i
appreciate uh staff and and delilah to
verify that there was no gas line
extensions
so when i first came on board on to the
city back in early 2001
there was a the city was in partnership
with a company
well we had a company actually believe
it or not we had a partnership with the
city of hatch it's called the rio grande
natural gas association
it was interesting about that is the
board much like many of you sit on and
many that we appoint this board was paid
they the chairman got 750 a month i
think and
the other members got 250 a month
imagine in 2000
2001.
i need to say it was a very popular
board and who wanted to be on that board
and
so you know one of the things that that
we have to do i mean even though i
appoint my colleagues to this utilities
commission um
i always tell them you know what it's
probably gonna be you're gonna probably
be here for at least your term because
it's very technical and this is our my
you know other than counselor ben cuomo
and i think a beta to sit on there maybe
one more um
this is our only time to to question and
i know there's perhaps it may be
redundant but i mean we have to do our
best to look out for the ratepayer
the taxpayer and the resident but what i
was going to tell you was
the reason why we we split with
the town of hatch is because
dr garcia said you know what um we're
gonna have to do some upgrades we're
gonna do some some
some serious upgrades to this gas system
that we have and
and um
patch didn't want to do it so we ended
up that's when we divided it they took
their portion we took our portion we did
our best and we took a lot of different
you know we tried to keep it obviously
close to las cruces and they kept it
close to
the hatch
and then about a year or two later they
sold it to a private company and guess
what they did they had to raise rates
because they had to redo the rehab on
those lines so one of the things that
we're very fortunate of and we have to
rely on our on our staff
they're the professionals and you know
we get a chance to question as much as
we can and see if they um
eventually say well
you know what they didn't you know they
kept they kept
steady at this
so
i guess what i'm trying to say is i
don't want us to have i mean i'm sure
you've seen this back east and it
happens a lot back east you know all of
a sudden the house blows up
because of the the lines are old
and and we're fortunate that we don't
have that and i don't want to have that
and we can't have that and and so we
need to do
that's why they elect us we have to make
the hard choices
but i would like
uh with your concurrence that staff
bring back
two two proposals one at twenty one
percent and one to thirty percent and
then let us see how it looks and just go
from there and you bring back please the
the actual uh mechanism how it's going
to look with with both uh increases and
then also i guess and i'm glad you
clarified this uh sir i i
you know again just
i took at the impression that it was
going to go up by that much if you're
saying that
that it's actually be less
let's call that the street rate okay
please include the street rate what it's
going to be when it hits the street as
opposed to
what the increase is and maybe in in the
price of gas
if you could do that and then that
allows us
council to at least have a more of an
opportunity to to digest it and and make
the appropriate um
you know support or not
good counselor flores
uh thank you mr mayor i i believe
if i understand what you're saying is
um
mr raven indicated that uh only
that 30 percent only applied increase
only applied to a certain
line item on the bill for lack of a
better word is that what you're
referring to mr mayor
well that was i was my understanding
it was an increase over a period of
three years yes over a period of three
years and only it's not the entire bill
that's 30 percent
that's correct so we were talking about
the base rate portion of the bill which
is the access charge on the volume
charge that does not include the cost of
the actual gas that you're being
supplied and so we're talking about
a a portion of a bill of the bill
overall that will increase over three
years by 30 percent and will at the end
of that increase likely be less than
what the bill is today because of the
removal of the
uh surcharge that's currently being
charged to customers and yes thank you
mr evan and i think what mr mayor is
what the mayor's asking for is that we
get presented with a sample of what a
bill would look like
and i think also a sampling perhaps of
what a small business would be facing
what a
community
a home
user in a lower economic area and say
someone living in a million dollar house
or 500 000 house and sonoma ranch would
be paying
to see what the equity or inequity uh
would be
uh
things like that i think that we just
want to make sure that
um
everyone's gonna if we're going to be
having a rate increase let's make it
equitable
and
then that's i think the information we
would need before we could proceed thank
you mr mayor and thank you mr evan thank
you councillor so if that is uh meets
with your uh support and i think that's
what we should just have them bring back
yeah well we can't vote but i think i
can see the heads nodding yes
okay
anything else
i appreciate
mr simpson as a member of the public i
know this interests you and i appreciate
you and what you're doing to try to help
and and provide assistance to us one of
the reasons why i supported the the
you know years ago believe it or not we
used to have to do this and that's when
dr garcia said you know let's go to this
other model here so that we appoint some
council members so they can get that
technical knowledge so that you know you
you hear it and then bring it back to
council instead of us spending you know
we haven't spent all day but you know
spending all day questioning why we
should do this or not but
you know and we do have
well i know i see one of the
commissioners here we do have members of
the public you know they're not
connected they do have some
we have to have some technical knowledge
to sit on that board and we appreciate
uh mr little as well as others that
that volunteer their service to the city
to help protect the ratepayer you were
going to say something mr simpson
yes mr mayor i
did not want to sit down without
thanking you and and the council for
your
your attention and your your forbearance
and listening to me um mr mayor though i
would like to ask a kind of a
clarification question about your uh
proposal
um
so are you
i think you're referring to the the
average
small commercial
bill impact of 33.3
after three years correct and you're
suggesting that
instead of
ten or eleven percent a year that that
rate increase be seven percent so in
other words the at the end of that the
small commercial customers would see a
overall
rate increase
in other words they're getting their
overall rates are not going up as much
after three years
that's correct but um
and i'm sorry sir what is your last name
again
raven
raven so mr rabin aka houdini i want to
see how it goes down if we were to do
the increase because that's an
incredible i mean that's almost like why
would we not support that if it's going
to go down if we that's why i want to i
want to see that but that's why i was
asking if they could bring both models
to us but yes you're absolutely right
that's what that's what i'm what i'm
thinking because
worst case scenario
i mean
appreciate our small businesses
so much but
everything relative
the the
residents they don't have that ability
if they needed to to pass out that
increase on businesses do i'm not saying
that they need to i'm just saying if
everything equal that's why we have to
do our best to protect the residential
and if we can we can take a look at the
plan for the
small business
okay
but again i still got to see where if we
were to move this why why wouldn't we do
this if it means that it goes down you
know what i'm saying so i that is i'm
looking forward to that that
presentation yes sir i think uh well
maybe delilah wants to clarify that for
you sir thank you
thank you
so mr moving forward um
the bottom line is we need 1.46 million
so so that's that's the bottom line if
you don't want to
have the small businesses experience a
30 increase and would prefer 21 increase
then the direction i need from you is
where do i get the rest of the money so
there's no
there's no excuse me how much is the
rest of the money what is the difference
oh i don't know what that dollar amount
is i'll have to look at but i need to
know where to get the rest of the 1.46
million because if we don't increase by
the 30 percent recommended rate and we
maybe do 20 or 21
to the small business rate class i still
need to recover the difference from a
different rate class
and so that's the direction i would need
okay so just roughly
you would you would that would bring in
two-thirds of this
give or take
of the 1.46 million because if you're
saying that the 33 brings in 1.46
million then
i don't know what the number is because
it also we you know there's other
customer classes besides small
commercial that are experiencing great
adjustments so on balance i'm not sure
what proportion is coming from
you know the small commercial class
compared to to the rest i mean
i guess my my suggestion is that as as
ms walsh has pointed out
the revenue requirement itself in terms
of what is identified as being necessary
to keep the utility operating good
working condition and repaired and in in
good operations
is it requires at least this 1.46
arguably more because we're two years
behind but at least that much and so if
we're going to short if we're not
as a policy decision not recover some
portion which i can identify what the
math says the dollar amount is but
whatever that dollar amount is if we're
not going to recover from small
commercial
as a policy where should we look to
recover that from from other customers
no i hear you i understand what you're
saying i just wanted to know what am i
you're talking about and i just did a
real just a real quick math and so i'm
looking at roughly
you'd be out about 500 000
give or take
so
you know then that's why if you have a
chance when you bring it back to council
we can make the decision if um
do we move forward with what you
proposed but
so
mr even help me understand how if we
were to pass this it'd actually be
cheaper
maybe
so i think
the cheaper part is you're currently
assessing one dollar and 69 cents per
decade therm to all customers across the
entire system to recover the unusual
cost of gas during winter storm yuri
last february one year ago
that that is projected to eventually be
paid off this summer
and and we
as part of the accommodations to the
reproposal it was decided that if these
rates were adopted they would not be
start increasing these rates until after
that fee had gone away so the mere fact
that that fee goes away
is going to overshadow the amount of
this increase that we're proposing
that's going to be increased over three
years so
at the end of the three years when you
get to the ultimate rate proposal
it would still be less of a bill impact
than what they're seeing today because
of the 1.69
uh per deca therm feed that is on
everyone's bill that will be going away
this summer
okay well i think one of the council
members suggested that you bring an
actual bill and i see what you're saying
it's much like
our geo bond
you know after we pay it off we can go
out there again and it's not going to
increase
because it's already been but you know
it's already it's already in the uh
in the
the amount that's uh being being uh
taxed
so
i see what you're saying now
now i understand i was thinking how can
you do that
but um okay so if you can if you can
bring those back
that would be beneficial
because i think that that would be very
helpful
and um
you know worst case scenario
you know you never know a council could
decide to pluck that 500 000 somewhere
from some place just for this one year i
mean right now it's just there's just so
much being hit by not just um
regular you know
residents but businesses alike from you
know i was just noticing
uh just the other day
their cost of you know to repair your
shoes went up because of everything it's
just going and just keep compounding it
so
if we were to hypothetically
make up that first one year increase
of the half a million
and then but but let's just see how it
looks let's just you know when we can
see it and
understand it makes things a lot better
since we're all public uh officials pull
up one of our own uh
utility bill and have it there yeah that
way there you can use one of ours
yeah show it yeah
yeah
that way that we take a look at it
thank you mr mayor and and counselors
and as i mentioned before it there is no
easy answer that you you know it does
cost more to do business our goal of
course is to be as efficient
as possible and we'll keep working to
that end
but at the end of the day
it takes money for us to maintain
everything in the city and i know
counselors you've all seen this over and
over and over again when we come back to
you for change orders because equipment
went up
i'll give you an example uh
you know mr simpson was talking about
trucks trucks are so expensive right now
just because of the costs and the demand
right now even in solid waste i had to
order a chassis
last december to get it delivered for
next year
and i had to make that commitment to the
purchase because of the demand and the
fact that we had to do an adjustment we
had to change our quotes and that's just
the reality of everything that we're
doing today
understood yeah i just uh and again i
appreciate you making sure that the gas
line extensions were removed so that's
good
okay so thank you very much everyone
thank you for your presentation thank
you for your time and all the effort you
put in mr simpson we appreciate it
all right so next item is going to be
the uh geo bond quarterly update
mr david cedillo
and tony hello and tony trevino looks
like he's coming
i was just there for moral support
good afternoon mayor and council david
seville public works director and i will
be going over the go bond
program update for you today
we start off with the hadley recreation
complex as we
let the council know the last quarterly
meeting this part of question one
completed early
you will see that that did finish in
quarter three
of 2021 we wanted to share these
wonderful pictures of those improvements
to all those facilities there but more
importantly also report on the contract
amount
which was three million seven hundred
fifty nine thousand dollars
and of that all of it was spent for this
portion of question one
also part of question one is a park and
sports courts
this project started in october
of 2020 we're at about 89 percent
complete it is scheduled to be completed
in april
so we do have one item remaining and
that is some erosion improvements out by
the big pavilion out at young park
if you look at the photos that we have
here there is erosion coming down from
that pavilion onto the trail and then
down on into the pond that's the only
item that remains once that is completed
the project will be done
i will want to note that this work will
not take place until after spring break
the reason for that is parks and rec
does have some activities scheduled for
that large pavilion so we don't want to
impact those activities we want to have
them have them perform do whatever they
need to do that they have scheduled and
then we will move forward with the
construction
again as a reminder the parks that have
been completed under this question
are hillrise
lions
papen
apollaka
so now we do want to move into that
portion that
we do report on with
percent billings and time and also what
was planned and what actual costs are
those are the two graphs
that council is
most familiar with and we've been seeing
however we did add based on
recommendations were to come back and
say what are those costs and what have
been spent to date
i will point out at the top you will see
that bar graph or that chart that shows
that this is scheduled to be completed
in quarter two
of
year this year 2022.
at this point that contract amount is
one million eight hundred twenty six
thousand three hundred and twenty two
dollars of that spent to date is one
million six hundred thirty
eight hundred fifty two dollars
the chart on the left is simply showing
the amount spent
so as far as billing goes we're 89 bit
with an 85 percent
time
on the contract itself the graph to the
right you will see the red line our
actuals the blue are the projected
from before we started the projects
and you will see that that line is
steady the red line that is because
we've been working on the design and
cost for that erosion work out at young
park
next we have unidath park this project
did start construction
on january 12 we're 43 percent complete
and i will detail a little bit more on
the next slide about that 43
we have an estimated completion date of
july 5th of this year as you can see
some of those pictures right there are a
little heartbreaking
but we do want to focus that this will
be a new and improved park
for our community
you will see that the wood structure and
concrete footings have been
demolished and they're also proceeding
with
earth work and utilities as we go
through there as well
again you will notice up at the top the
bar chart for the completion that is
scheduled to be completed in this year
quarter three just into quarter three in
july
on the left again you will see those
billings versus time
and on the right the projections now i
do want to speak a little bit too
how those percentages are high
those are based on purchases that the
city has made for the project
so since
the city has already purchased the
playground equipment and the splash pad
equipment that has elevated the dollars
spent on that contract hence 43 of the
billings
for that as we go through
up top you will see the contracted
amounts 1 million 844
412 dollars of that
spent to date seven hundred and eighty
five thousand
next project in question one we have the
east mesa public rec complex this was
approved january 12th
the
estimated completion date is december
31st as we move forward we did have a
groundbreaking ceremony this month on
the 15th and thank you for those who
attended a little windy that day but
overall a well-attended groundbreaking
ceremony
the contractor will be working on
clearing and grubbing the site
this week
now i do want to note we didn't have any
pictures obviously because they'll be
getting work this week but we did want
to incorporate
some of the work that the same
contractor who was awarded
the road project that leads to the park
on sonora springs we did want to show
some progress on on that as well too
lastly we have the dog parks in question
one i do want to remind council that
we did decide to incorporate the dog
parks with the construction of the
animal services center now that doesn't
mean that the funds
are coming in from anywhere else they're
coming from question one
it was just going to be more efficient
to have those included
with that project to move it forward
so you will see a little bit of
information from this slide to the next
but the project started in june of
last year and we have an estimated
completion date of september this year
for the dog park at rinconada
we're nearly complete with the earth
work the carbon gutter is complete for
the parking area under installing
fencing
for burn lake
we're nearly complete with the earthwork
as well at 95 percent
sidewalks and fencing are being
installed along with utilities
as mentioned before
you're going to have the same timelines
with the animal services center for
question two is the dog park since they
were combined
the project overall is 44 complete you
can see the items that we have completed
through there
i do want to point out that we do have
the exterior wall framing which is a
hundred percent complete and then you
can see the structural
members at seventy percent which you can
see the bar joists going across for the
roof supports also we have the structure
for the main entrance there as well
along with that the dog pods are
continuing work with the cmu
or a cement mortar unit
those are more commonly known as cinder
block and also you'll see in the top
left corner
work continues with electrical plumbing
and other interior framing
again we have your graphs for both
billing and time and what that is
projected the graph on the right you
will notice that the actuals are a
little bit lower than what was projected
as we continue to move forward with
construction you will see that gap close
as we near completion of that projected
item
the contract amount for both of these
projects again these are combined
is nine million nine hundred twenty
thousand four hundred forty dollars
spent to date is four million three
hundred eighty six thousand five hundred
and eighty five
fire station number three
we do have ninety seven percent of
completion our original completion date
for this project was january 20th we do
have a revised date and i'll explain
that here in a little bit more in detail
the project however did reach a
temporary certificate of occupancy on
january 11th since then a walk through
and a punch list has been done for the
project
also the general contractor has trained
city staff on some of those items that
they have in the building
now some of those items that are
remaining and why that was extended out
till the end of march
the gate operation installation that was
actually recently completed by the time
the presentation was done
but we do have delays we have delays
indoor hardware and some security items
such as cameras that is for your access
control and video security
as mentioned in the discussion just a
while ago not only cost but we are also
experiencing delays with deliveries of
materials
that is the cause for this this was
outside
the contractors
realm they didn't have no control over
this
how but again they did have meet the
obligation of getting substantial
completion of a temporary co
another item that we do have is the
photovoltaic array connection
that has to be done by el paso electric
that has been scheduled and they should
be getting that done before the end of
march
and then lastly we have some landscape
items
i did want to share some
very nice pictures of that facility
itself you will see over on the left
which is going to be on the
east side of the building or basically
the rear
of the building as it goes through
that area that's going to be accessible
to the fire department
in the middle you can see
the front entrance to the building
itself
that pond that you see out down towards
the bottom that's some areas that will
have some landscaping that will come in
with some plantings
when this picture was taken they do
already have some rock landscaping in
there as well
and then over to the right you can see
the beautiful finishes of the interior
of the building
again wanted to show you those graphs
with billing and then those projections
of actuals to proposed
very close we are
as
noted 97 complete with the billings the
86 percent that you see there is the
adjusted for the end of march
the contract amount for this is 5
million 110
of that 4 million
9555 has been spent
our last project that we have here is
the walking jogging biking trails for
question four that project began in
april of last year 95 complete and they
are estimated to be completed
by the end of april again quarter
two of this year on that bar graph up
above so
for this the messiah drain has reached
substantial completion and a punch list
and walk through of the improvements has
been done
that was as of january 6th the las
cruces and armijo drainage trail those
continue to have
signage installed bike lanes and
crosswalk markings installations once
they complete those we'll reach
substantial completion and then go
through a walk through
again i do want to point out the graphs
that councils familiar with
i do want to highlight this project from
the billing standpoint has been ahead of
those projected all along we do it looks
like we may be able to finish early
but again we'll see how the work
continues
to date the contract for that is two
million two hundred ninety thousand
seven hundred ninety two dollars
of that we've spent two million
seventy nine thousand three hundred
fifty six
going over the program budget here is
all of those costs that were reported on
that
uh based from
in detail for each question
again this slide you will remember
multiple projects are under question one
and then we have question two three and
four that are listed there i do wanna
note that council did approve arpa
funding in the amount of 4.1 million
that was approved last august at this
point no arpa funding has been spent
although as those dollars get spent they
will be included in the quarterly report
lastly just another look of compiling
all those
project schedules with their end date
and where they're at at this point in
time
and then the last two slides broke it
down
uh for the overall
again this is the actuals to proposed
based on all of the billings that have
happened on all of the projects and what
was estimated as you can see they're a
little bit low at this point in time
right now but as we move forward with
some of the larger projects expenses
such as finishing out the animal service
center
and the east mesa public wreck we will
start to see that gap close
this last
graph basically just shows the exact
same thing
we're at 60 percent spent at this time
time wise about 77 spent
overall
with that uh both eye and staff are
available for any questions
that you may have
thanks david councillor flotus thank you
mr mayor and thank you mr cedillo
my concern is that we're overall about
done with most of our projects
and
do we have all our materials already
purchased for those projects because i
know that early on
a lot of those had to be adjusted like
the design of the animal service center
had to be changed because of the price
and
materials
so are we in a position where we still
might be facing
uh skyrocketing
prices and lumber or
whatever materials
mayor councillor flores great question
an example obviously we've already
purchased the equipment for unidath park
which is both the splash pad and the
playground we did recognize those items
right so we wanted to move early on
those
the only thing that may impact as we
move forward is the
equipment for
the east mesa public wreck with it with
the park however we are looking into
those items and seeing what we can do to
get ahead of those costs as far as those
prices skyrocketing again we're not
seeing much relief
from a lot of material costs
now we're obviously seeing a lot of
delivery delays but we're working to
minimize those impacts
and in the event um
that the the amount of the money that
still remains each project had an
allocation of funds
say for example
one of the projects has um
a doesn't spend all of its money for
whatever reason and another project
falls short
can those funds be transferred or no
mayor councillor flores yes for those
projects that are encompassed with
question one those funds can revert back
from project project however for the
funds that were
specifically
approved for questions two three and
four those need to remain with that
project
okay then my next question is uh in the
fire station number three
i didn't see that tall wall where the
art project would be going up the public
art
oh maybe
maybe the sketches were different or
maybe it made the building look taller
and the reality is
or or was or was the building actually
redesigned as was the animal service
center building
mayor councillor flores tony has a
little bit more information on the art
piece itself so i'm going to let him
answer that great
so it's his fault he i knew it tell me i
knew it thank you thank you for the love
thank you
just for that let me erase this a little
bit
um
mayor councillor forest good afternoon
tony trevino for the record uh no that
middle piece that you're referring to is
there
let me come back to here i think since
these are just actual photos we didn't
really get a good photo of the front but
if you can see where my mouse is that
portion is that tower area that the art
piece will go around
and i know um staff is working with the
artboard to get that installed here
shortly
great and then um and then the artwork
will be going up as soon as everything's
done
um
massa menos
merry concert photos as soon as that art
piece is um ready to go we'll be
installed for that so there is no
waiting on whether the project is open
the public or
anything else it's just as soon as that
piece is ready we will get it installed
great thank you very much thank you mr
cedillo and thank you mr trevino
real quick before i get to council
become who's the contractor on this they
put it up pretty quick looks real nice
uh
mayor this is james
james james corporation who is also
doing the animal service in france they
did our city hall they did our aquatic
center
convention center yes sir councilman
counselor beta
thank you mayor and thank you gentlemen
for the presentation yes i couldn't
agree more this is gorgeous my only
question is
is there
a possibility that
the arpa funds allocated for some of
these projects will not be used
mayor councillor ben como
no i believe all the funds for the arpa
will be utilized okay i don't think
we're going to have an issue with that
okay thank you
councillor beta thank you mary and thank
you mr siddio
as we are looking into going into our
potentially our next bond cycle
i was curious if we're going to have
these types of slides available
at that those public meetings that will
be coming up soon
so that we can share with the public
that we're
in many of these cases really ahead of
schedule and kind of what their their
dollars have been going towards
mayor councillor beta yes ma'am we can
definitely provide some of these slides
as we move through that process okay
great thank you i think actually that
would be really helpful if we're asking
them to
reallocate
that funding that we're showing them
what it went for um
and then
yeah i think that's it so thank you very
much
thank you
i'm
thank you thank you david and tony for
the presentation um can you
refresh my memory specifically to the
yapobaka park um
work
what the money went through in total
mayor mayor pro tem yes the scope of
work that was allocated for apolloka
park
included the expansion on two sides
it included
repairing the court surface as it was
and then applying
three layers of coating
colored
to meet the actual
court sizes per specifications of the
u.s pickleball court association
it also included improvements of the
wind fans all the way around
out there the relocation of two of some
lights
that were on the park with the extension
of the concrete to the east and west and
we also had improvements to interior
fence in between the courts
as well too
that was on the court itself so there
were a couple of improvements off-site
and that was to provide a simple shade
structure over some equipment adjacent
to the court
say that last part again david i didn't
hear you
yes there was a small structure a shade
structure that was installed over some
existing equipment adjacent to the court
the playground yes ma'am yes thank you
thank you and what's the total
the total amount for that project itself
i don't have that in front of me but i
can get that uh over to you unless tony
has a dollar amount
because it was incorporated with the
whole the whole thing yes ma'am i just i
just if you could do that that would i
would appreciate that thank you yes
thank you mayor
okay looks like everyone's had their
questions answered so
good job i still appreciate you all
working through especially
march 2020 you know covet i mean
goodness you just guys just kept working
so
it's coming along good
appreciate it thank you mary thank you
council
okay if there's nothing further
entertaining motion to adjourn
second by flores a motion made by mayor
gandala second by counselor flotus said
we adjourn christine
this is on the motion to adjourn the
work session counselor beta yes
councillor graham yes
counselor ben como yes
councillor koran yes councillor flores
yes
councillor gandara yes
mayor yes
okay we're adjourned it's 4 26 p.m all
right thank you and uh
i'm going to be ready for the agenda
setting
here okay this is the agenda setting
meeting for our march 7th 2022.
chief can you hold on for before you
leave please i just wanted to talk with
you and ifo and
all right
number one
nice
try you almost got through number one
consent one consent two non-consent two
non-consent three non-consent three
non-consent for non-consent for
non-consensus five non-consent five
non-consent
okay
oh
me