[Editor's Note: This is part two of a multi-part series of articles on the Grant County work and regular sessions April 17 and 19, 2018]

By Mary Alice Murphy


At the Grant County Commission work session on Tuesday, April 17, 2018, Mark Valenzuela of Hilltop Securities, and Grant County's financial adviser, presented financing options for the proposed energy upgrade to primarily renewable energy for the county-owned buildings.

To read the presentation by the energy-company, Energy Sources US, please see http://www.grantcountybeat.com/news/news-articles/43774-grant-county-commission-hears-energy-report-at-work-session-041718 

"You have three options," Valenzuela said. "First, you can cash fund it, but I don't suspect that is an option. Second, you can bond finance on the county's balance sheet or third, you can go for a tax-exempt lease-purchase with an independent financer and the county pays the financer."

He said the latter two options both look like debt offerings.

The county would go into a 25-year agreement to repay Energy Sources. The first-year payment would be about $141,000, with the last payment at about $300,000, based on the annual savings. "The improvements will provide the savings. The county administration would put the savings into an account to pay the annual lease payment."

Commissioner Harry Browne asked if it wouldn't be easier to take the money out of the department budgets that were going into paying the utilities.

Valenzuela said the administration and commission would make the decision whether to create an enterprise fund to pay the utilities. "Another detail that matters is the pledge of the county to support the debt, if it's a lease purchase. It's required to be appropriation-based. There is more risk with a tax-exempt lease purchase and the financing costs will reflect that."

"These projects work," Valenzuela said. "For a 25-year deal, the growth or escalation factor is tied to the savings, with a usual 3.3 percent growth. The question with a lease-purchase is will the entity you're paying still be there in 25 years. That's another risk factor."

Bond financing is the option most familiar to the commissioners. For bond financing by the county, they could pledge a gross receipts tax increment to repay the debit. "You would be taking on faith accepting that the savings will accrue. You give up the guarantee of escrow, but you have a fixed payment. The total costs would be $4.3 million with a payment of $275,000 a year. That would net out the first-year savings with no growth. In my very conservative view, the county can dig $135,000 out of the budget over the next 25 years. After five years, the energy costs savings will cap out at about $160,000 in savings. That averages $125,000 on average per year out of pocket expenses. The credit rating of the county would benefit from the financing costs."

Valenzuela said bond financing is a better investor risk. "We will help guide you and provide you with data."

Scott Stevens of Energy Sources US said if his company did the bond, there would be a performance guarantee that the county would realize.

Browne asked about the decision-making process at the county level. County Manager Charlene Webb said she has asked for other options.

Commissioner Brett Kasten said the county could always consider a lease purchase.

Browne asked about the timeframe for the financing portion. "Contractors have timelines."

Kasten said the financing should be decided within a month.

The meeting continued with the financial reports presented by financial Officer Linda Vasquez. Expenditures totaled $2,724,575.46, including $582,034.19 for four pay periods, as of April 11, 2018.

Extraordinary expenses over $10,000 are included in the following graph.

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Four proclamations were presented at the work session and approved at the regular session on Thursday. They were Fair Housing Month for April, Give Grandly set for May 5, Motorcycle Awareness Month for May requested by the state of New Mexico, and the Continental Divide Trail Days of April 27-29, 2018.

Commissioners at the regular session approved the New Mexico Department of Homeland Security and Emergency Management Fiscal Year 2018 Emergency Management grant program application and work plan. Webb requested approved, as the grant pays part of the Emergency Management Director Gilbert Helton's salary.

Under resolutions, commissioners approved the amending of the approved and adopted budget for fiscal year 2017, which commenced July 1, 2017. Vasquez listed the many adjustments to expenditures and revenues.

Commissioners approved, at the regular meeting, the resolution to accept roads in the Branding Iron Subdivision for maintenance. At the work session, Road Superintendent Earl Moore said he feels he can accept some driveways that don't have culverts, but "the owner can buy a culvert and we can install it. We will maintain metal culverts but not the plastic ones."

A very long-titled resolution authorized a loan agreement and intercept agreement between Grant County and the New Mexico Finance Authority to pay $201,512 for improvements and an expansion by the Whiskey Creek Volunteer Fire Department.

In county reports at the work session, Detention Center Administrator Mike Carillo said the jail has four vacancies, but those recently hired will be appointed to shifts. He thanked Western New Mexico University and Vicki Ryder for the donation of metal shelving for the books for the inmates. A recent meeting of the Stepping Up program also discussed the inmate art exhibit coming up May 7 at WNMU Library. The jail's high daily population for the month was 85, on April 12, five more than last month, with high males at 67, four more than last month and high females at 20, two more than last month.

Moore, during his report at the work session, said his department is getting ready for chip-sealing roads. "We will start May 2. NM DOT District 1 had a special appropriation, and we might get about $325,000 for projects."

General Services Director Randy Villa said he attended a Fire Summit, learning how to protect properties and watersheds. He said several wildfires have popped up northeast of Capitan. The Rattlesnake Fire has been burning near Alpine, AZ.

"The Forest Service has gone into high fire danger for the Gila National Forest," Villa said. "I hope to get GNF Fire Officer Gabe Holguin back to a meeting in May. They have a helicopter at the fire base (at the Grant County Airport), smokejumpers are coming in within the next two weeks."

Villa recommends no burning, but if someone wants to burn "you should notify Dispatch or the fire chief of your volunteer fire department, so they know."

He said the walking paths at Bataan Memorial Park are seeing a lot of activity. "We are working hard at the airport. Boutique has been having problems flying on windy days. It was recommended Corre Caminos get rid of on-demand routes, but they haven't yet."

In reference to cancelled flights by Boutique, Villa said the airline is working hard to rectify the maintenance and mechanical problems it was having. "Lately, it's been mostly weather-related."

Webb said she spoke to the Boutique CEO, and he said the problem had been maintenance primarily in the northern part of its routes, so it was having to shuffle aircraft. "Plus, Phoenix is having construction issues. Boutique is looking at installing more maintenance hubs. Because of the demand for mechanics, it is also having trouble keeping good ones. Denver and Dallas are booming, so Boutique is looking at more staffing and recruiting. They are also buying three new aircraft, which will alleviate some of the problems. I will be following up with them. He promised to make improvements."

Kasten asked Villa and Webb to let Boutique know that when the last airline provider to Grant County began to have problems, Freeport McMoRan began chartering flights, which would cut into Boutique's passenger numbers.

Community Development and Planning Manager Michael "Mischa" Larisch said Tu Casa was very close to completion. He said the Santa Rita VFD construction was moving along. The problem with the Lower Mimbres water tank has been fixed. "I'm starting public meetings on the Infrastructure Capital Improvement Plan on May 7 and May 14."

He reported the generator for the airport has arrived. The airport and PNM are coordinating when it can be installed.

The final article will cover the presentation by Gila Regional Medical Center's Chief Executive Officer Taffy Arias and Chief Financial Officer Richard Stokes, a Silver City Realtor's report by Cissy McAndrew and a Surveillance Program update by Margaret Begay.

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