T or C first budget workshop—baby steps

The budget hearing held on April 17 was the best among the six I’ve attended since 2019, but that doesn’t mean the city has turned the corner from bad to good city management.

The last two budgets and the 2024-2025 budget will maintain the major improvement in city management that previous-City Manager Bruce Swingle imposed—utility funds will stay with the utility instead of going into the general fund.

City Manager Angela Gonzales also appears to have implanted a refinement on Swingle’s idea. Now a few commissioners are mouthing the need to run the utilities “like businesses” as well as not taking all their cash.

But these are just baby steps the city commission has taken, which are little enough considering the water, wastewater and electric emergencies that have occurred during their watch over the last three years—the inevitable consequence of poor city management over generations, not decades. One would think they’d grow up in a hurry, but as yet they don’t see the dangers of say, another electric transformer blowing, wells again going off line, electric panels blowing at Cook Street Station, electric panels blowing at the solar farm, the hospital and schools going without water, utility rates skyrocketing, hundreds of thousands of dollars being thrown at temporary waterline repairs and spending millions in public money without much care, planning or vetting.

As in years past, the city commission is still only spending a few days on the budget, and unlike other city governing boards, they haven’t been hearing or receiving regular written reports and updates from city department heads. The budget is just a cram session. Sadly, it’s the only time department heads come before city commission to give any kind of accounting.

What made this budget session better is that Mayor Rolf Hechler seems to have absorbed some administrative moxie, probably from watching and seeing how Sierra Electric Cooperative’s chief executive officer and governing board operate—by gathering facts, data and information from experts and competent city staff regularly and keeping assiduous records in order to keep costs down and services excellent for the good of their customers in a publicly-owned company.

For nearly three years Hechler and city commissioners Amanda Forrister, Shelly Harrelson, Destiny Mitchell and Merry Jo Fahl met with Sierra Electric in closed-door sessions to determine whether the city should sell its electric facility to them and if Sierra Electric wanted to buy it. The seven studies that were commissioned were also probably discussed and enlightening to Hechler.

Hechler said at one point during the budget session that “We couldn’t sell it for what we wanted because we didn’t have the data.”

I was told by a reliable source that wanted anonymity that the electric sale evaluation took nearly three years because the city didn’t keep proper records.

That’s also why the city’s recent electric and solid waste rate studies took a year a piece and why the water and wastewater rate study in process is taking a year. Since no records separating different revenue streams and their concordant staff, equipment and maintenance costs had been kept, they have to be created by the engineering firm the city hired.

The budget does not reflect those rate changes and it is unclear if the city commission has absorbed the lesson that our departments and department heads should keep an ongoing accounting in order to do cost analysis of how to most effectively field their staff, use their equipment, maintain the facility and plan budgets that plan five and more years ahead.

Mayor Rolf Hechler was by far the most informed and verbal of the city commissioners and the only one maintaining an overall administrative view.

While Fahl questioned each department head why their oil and gas line items went up, Hechler said a five percent increase should be imposed across the board. It would have been better if actual fuel prices had been substantiated, but at least equity and uniformity was imposed.

Hechler also said that in future, evidently not this budget, that if a line item increases “five or 10 percent,” department heads will have to account for the increase. 

When Electric Department Director Bo Easley asked that a particular employee get a raise, Hechler said no, holding to the salary study conducted and adopted two years ago, which established city-wide policy for raises. It defined titles and job descriptions and slotted existing city staff into those positions at one of seven levels. The first level is the entry salary and the seventh is the ceiling salary. Job experience, performance, training and certifications affect the level on which existing employees were and new employees are placed.

Easley persisted, stating that the employee “hasn’t received a raise in four years and won’t receive a raise for two more years.”

Hechler reminded Easley that the salary study determined the employee’s salary was too high compared to what other cities paid for the same job. She was told she wouldn’t have her salary decreased but she wouldn’t get a pay raise either until her years of experience matched the next level, Hechler said. “She was given a choice whether to stay or go to another department,” Hechler said, adding that “she decided to stay.”

Before the salary study was adopted and implemented, Hechler said, “We got in trouble” for allowing the city manager to give raises where he saw fit, “and then people would come to us and ask why they didn’t get a raise.”

Hechler said the city might consider giving employees “more money in their pocket” by increasing the city’s retirement contribution, thus decreasing the employees’ retirement contribution. He did not ask the city manager to make this a future agenda item, so it is unclear who will make this policy decision and if it will be made in public.

Hechler also questioned Easley about his capital projects budget. Easley said a Love’s truck stop was coming, a business owned by Jose Rios near the roundabout and Highway 181 was planned, and Doug Whitehead was also planning a business.

Providing city electric services to new businesses, which they should have to pay for, should not be Easley’s response when asked about capital projects—my observation, not Hechler’s.

Easley said he’s also working with Jay Armijo [South Central Council of Governments director] on grants for “pole replacement and a substation.” Easley claimed we need a new electrical substation to handle future growth.

Easley provided no asset management document to qualify the age, life expectancy, location, number, cost or anything else to justify yet more pole replacement and the city commission said nothing.

Hechler noted that the city spent “$1.2 million” to replace a 60 year old transformer at the existing substation (actually it was a $1.3 million loan we took out with New Mexico Finance Authority and it was an emergency purchase, which does not include installation cost or interest, making the cost closer to $2 million). Hechler did not remind Easley that the other transformer is also 60 years old and needs to be replaced. But we need a new substation? For growth? We have consistently lost about 2 percent of our population every year from 2000 to 2020 according to census data.

Hechler did not seem satisfied with Easley’s skeletal planning, reminding him that the rates went up to give him $1.5 million more a year for capital projects. “We need to know how you are going to spend that money,” Hechler said.

The study also showed, Easley responded, that the electric fund needed to build up its cash in order to cover emergencies. Cash reserves are about $3 million now, Easley said, evidently satisfied that he had explained why he had no capital plan.

Hechler also questioned Solid Waste Department Director Andy Alvarez’ proposed capital expenditures. Alvarez said he wanted to “be prepared to buy trucks and polycarts” to service Elephant Butte. “But we haven’t decided whether we’re going to do that or not,” Hechler said. The trucks will take between a year and a half to three years to “come in,” Alvarez said. Hechler responded with a non sequitur. “I guess, just because it’s in the budget, doesn’t mean we have to spend it,” Hechler said, giving no clear direction whether Alvarez could order the trucks or not, evidently not recognizing it as a financial encumbrance.

Providing solid waste services to Elephant Butte has never been an agenda item at city meetings, and for the city and Elephant Butte to have such a contract is definitely a public policy decision subject to the Open Meetings Act. Evidently a good-old-boy backroom meeting has taken place, since Hechler seems to know something about it.

The solid waste rate study showed that the city has way overcharged polycart customers while giving away services to recyclers and way undercharging dumpster customers. Rates have gone up 5 percent a year for seven years until they are the highest in the state. Alvarez has no idea how set or arrive at fair rates and has said he wants “to make money” for the city, demonstrating he has no compunction about exploiting the people instead of providing a service for their benefit. Since the city commission has consistently praised him, why would Alvarez act or feel any differently toward the public or run his department differently?

Hechler questioned Alvarez about his “professional services” line item. About $31,000 is to go to the engineering firm that did the solid waste study, Alvarez said. “I still need them,” was his brief explanation, which was evidently deemed sufficient, since no further questions were asked.

As in years past, millions of dollars have been spent by allowing department heads to propose capital projects without having to justify them through cost analysis, data collection, public discussion or any vetting.

Hechler’s questioning and greater overview is a welcome baby step toward responsible budgeting and city management, but at this rate, it will be a while until competent city management occurs.

I asked Gonzales when the next budget meeting will be, to which she replied it will be publicly noticed when it is scheduled.