The Truth or Consequences city commission is asleep at the wheel in overseeing public spending amidst the daily decay of our water and wastewater infrastructure.
It rubber stamps what city staff decides, leaving the people under the rule of a hidden administrative government with no representation, yet imposing increasingly higher utility and tax bills.
I dug deeper into how much we are spending on fixing the numerous water and wastewater leaks. These are repairs separate from water and wastewater capital projects. The city budget separates capital projects from the operations budget. On July 26, 2023, the city commission approved a $53-million budget, $31 million of which was for capital projects (mostly water projects) and $22 million for operations.
The money for capital projects and for ongoing leaks is primarily being paid for from our utility-bill revenue, although property taxes will more than double this year to pay for general-obligation-bond debt for water, wastewater and road repairs. November 2022 the people approved the issuance of $3.5 million in general obligation bonds.
The water department’s operations budget estimated $1,465,200 revenue from utility bills. Off the top, $681,276 is transferred out to pay off capital-projects debt, leaving less than $800,000 to pay for $1,105,003 for operations expenses, which includes salaries. The city budget shows the $300,000 difference being paid from the prior year’s cash balance.
Within the capital budget, the city has set aside a mere $12,500 for water emergency repairs. The city commission didn’t estimate for emergency expenses. They left it blank. This is irresponsible. I’ve attended nearly every city commission meeting and all budget hearings for the last four and a half years. A responsible commission would ask how much had been spent on water leaks over the last four budgets, looked at cost increases, and plugged in a number.
An “October 2023 income report” was submitted by the city’s chief financial officer at the Nov. 15 meeting that was not discussed. It shows that the $1,105,003 water department expense was up to 1,786,279. That’s over $681,000 in unexpected expenses in the first four months of the fiscal year. If this silent spending continues at the same rate, the water department will be $2 million and more over budget by the end of the year—nearly three times the estimated expense. The city commission’s silence in the face of such bleeding shows their state of unconsciousness.
The wastewater department is not bleeding money from the jugular, but a tourniquet is still needed. The July budget estimated revenue at $1.2 million, transferring out over $242,000 for capital-projects debt, with over $1.1 million in operations expenses, thus starting the year over $100,000 in the hole. Again, cash left over from last fiscal year is to make up the difference. In the capital projects budget about $20,000 was put aside for emergency repairs. Again, no estimate for emergencies was even attempted, unless you consider “zero” a realistic estimate.
The October 2023 income report shows that wastewater expenses were $242,000 over budget in the first four months of the year. At that rate the wastewater department will be about $800,000 over budget by the end of the year.
To summarize, four months into the year the city’s wastewater and water departments had over $923,000 in unbudgeted expenses, and there has not been one word mentioned about it in city commission meetings.
It appears that Water and Wastewater Director Arnulfo Castaneda has been given a blank check for water and wastewater repairs, perhaps because the city has no choice if it is to deliver services. The city commission declared a water disaster occurred around Nov. 6 through Nov. 10 when the electrical system blew out a water pump that fills the city’s only chlorination tank. No chlorination and no pumping meant the city lived on water stored in its tanks, which was nearly depleted after four days. No word yet on what that disaster cost or what the New Mexico Emergency Management and Homeland Security Department might reimburse the city. I went to the city’s purchasing web page to look at “emergency purchases,” but all the links were broken to those documents—more secrecy. The city also hasn’t posted this year’s budget. I finally found it in the July 26, 2023 city commission meeting packet, which is online.
The city has gotten more verbal about water and wastewater leaks in the last six months or so. Water and Wastewater Director Arnulfo Castaneda gives verbal reports (one written, but not included in the public packet on the city’s website). But Castaneda never gives cost figures or much detail.
During the Nov. 15, 2023 meeting, Castaneda vaguely alluded to developing relationships with local engineering firms. He has hired them to work on breaks that involve pipes buried more than four feet underground. No one on city staff has the licensing, expertise or equipment to work on such breaks, he said. https://sierracountycitizen.org/shocking-report-from-water-wastewater-director/
Smithco (located in Caballo) is the primary firm Castaneda has been calling to work on these breaks. I submitted an Inspection-of-Public-Records-Act request for their invoices and the city’s payments.
I then compared the Smithco costs with the city commission’s approval of “expenditures over $20,000.” It is a regular agenda item. Previous City Manager Bruce Swingle spearheaded the city commission’s procurement oversight in 2020. Since then the city commission has rubberstamped this agenda item with no substantive discussion. This slight check and balance on city-staff spending is obviously nearly useless.
The city sent me documents showing Smithco was paid about $22,000 in August 2023, which did not show up on the city commission’s over-$20,000 purchases agenda item. I checked every city packet since the fiscal year began July 1, 2023.
The documents show Smithco has over $200,000 in invoices due, dating from September through Nov. 28, 2023: about $26,200, $26,200, $52,400, $3,000 and $145,000. We’ll see if any of those purchases show up on the city commission’s over-$20,000 agenda item.
Only one Smithco purchase over $20,000 was approved by the city commission, and it was not included in the city’s IPRA response, making me wonder if Smithco has been paid more or is owed more than this article uncovers. July 26, 2023, the city commission approved a nearly $137,000 purchase of Smithco’s services “to fix all waterlines.”
To summarize, the city documents show Smithco has been paid about $159,000 and is owed about $200,400 for a total of about $360,000 in services in the first five months of the year.
Since it appears Smithco has not been paid $200,000 or so, we can add that figure to the $923,000 the water and wastewater departments are already over budget, bringing unexpected expenses to over $1 million.
Don’t be surprised if water and wastewater utility fees go up at a more rapid rate to pay for these unplanned, unbudgeted, never-discussed emergency repair costs.
Water rates were increased about 50 percent in 2019, 5.4 percent in 2020, over 9 percent in 2021, and then I lost count. The city passed an ordinance in 2019 that states water-rate increases will match the consumer price index.
Since 2017, wastewater rates have gone up 5 percent a year.
About six months ago, Assistant City Manager Traci Alvarez asked for a water and wastewater rate study, which the city commission approved without discussion, despite the large annual increases in existence. There has been no word on the results of that study.
The solution? The public has to insist the city commission communicate and perform its duty of fiscal oversight. Making city staff submit written reports is a basic first step.
One of these reports should be an asset management plan from every department head that lists each asset worth over $5,000 and estimates its life span and the cost to replace it in the appropriate budget year. Plug these figures into the budget. Don’t defer repairs and maintenance to buy other stuff, such as a police building.
My figuring shows the city is on track for $2 million in water and wastewater emergency repairs this year. Instead of paying that to outside companies, hire a water and wastewater engineer or engineers with the proper certifications. Outside firms’ goal is to make money, not represent the people.
These engineers should also initiate and oversee a master plan for capital projects to correct 60 years and more of neglect of the water and wastewater infrastructure.