The Truth or Consequences City Commission approved the acceptance of a $50,000 grant at the Nov. 18 meeting, which commits the city to creating an asset management plan for its wastewater treatment system, implementing the plan and appointing an asset management plan steering committee.
But the belated timing of the commission’s enabling resolution is confusing. City staff applied for the New Mexico Finance Authority grant last March and received notice of the award on May 28. Five months elapsed before the city commission was asked for approval.
The resolution states city staff and an unnamed engineer have already started on the plan.
Wilson & Company of Las Cruces is probably the engineering firm, since it has an on-call contract with the city. The city didn’t require bids for engineering services; it hired Wilson under the umbrella authorization of the state’s contract with the firm. The firm handles nearly all of the city’s engineering needs.
Traci Alvarez, city grant coordinator and zoning administrator, presented the resolution at the Nov. 18 meeting. She suggested the asset management steering committee include herself, City Manager Morris Madrid, Water and Wastewater Director Jesse Cole and “an engineer.” The city commission did not comment on her suggested members, and their appointments were effective with the resolution’s approval.
Before the vote, City Commissioner Frances Luna asked: “Will we review the asset management plan before implementing it? We may not like what’s in it.”
Madrid affirmed the plan would come before the commission when it was completed.
It is unclear if the $50,000 grant will cover the cost of the asset management plan. The resolution states NMFA is providing “partial funding.”
On the other hand, the NMFA letter, dated May 28 and included in the Nov. 18 meeting packet, states the $50,000 grant will fund “100 percent of the planning document.”
The NMFA letter also establishes an 18-month project timeline, stating the city is obligated to forward the engineer’s contract by Oct. 28, 2021, complete the plan by May 28, 2021, approve the plan by resolution by Aug. 28, 2021 and close out the grant by November 28, 2021.
NMFA requires another resolution be approved “adopting a reserve policy included in the AMP [asset management plan], which will enable the governing body to collect appropriate revenues to maintain and operate the utility and to address the future needs of the utility, as identified in the AMP.”
Therefore, if wastewater rates are not sufficient to cover identified projects, an increase is likely.
The AMP comes after the city’s completion of a major sewer project. Over the last four years the city has expended $6.6 million—according to the city’s yearly audit ending June 30, 2019—to improve the wastewater treatment plant at the end of Radium Street, near the Rio Grande and Williamsburg.
To finance the project, the city raised sewer rates and instituted a policy that increases them another 5 percent every year. This compounded rate increase is more than a straight 20 percent increase over four years. The yearly rate increase has no sunset.