City manager since early May, Bruce Swingle has held two long sessions on the Truth or Consequences budget to inform the city commission that the way they’ve balanced the budget for years by stripping the utilities of their cash reserves must stop.
Utility revenues must now go to critical and emergency repairs to make up for years of neglect of water, wastewater and electric infrastructure, Swingle has emphasized at budget sessions on May 5 and Aug. 9. The electric fund, in particular, is known as the city’s “cash cow.” It can give no more milk, which has thrown the city into a cash crunch.
Swingle, not department heads or city commissioners, has already identified two infrastructure emergencies requiring emergency purchases, which must be brought to the attention of the New Mexico State Department of Finance and Administration after the fact for its review. When Swingle ordered emergency repair in June of one of the city’s two electric transformers (both past their useful lives at 60 years old), the city was facing the prospect of brownouts and called upon citizens to do their utmost to conserve electricity.
Of the eight wells providing drinking water to citizens, only two were working when Swingle came on board. City water tanks didn’t hold enough water to keep up the necessary pressure to service the hospital and other major customers. Low pressure was also endangering the pumping system’s mechanical parts, according to public statements made by Swingle, who ordered the emergency repair of a non-operating well.
Several times Swingle has told the city commission the water system springs “between 20 and 25 leaks a week,” requiring the water department to operate in constant crisis mode.
During the Aug. 9 session, Swingle made a brief but astonishing statement that indicates how desperate the city is for cash. “I am negotiating with Sierra Electric Coop, looking at the purchase of the electric department,” he said, “to see if it makes sense for them.”
Only City Commissioner Randall Aragon asked a follow-up question. Perhaps to gauge when the city might get the cash to solve some of its infrastructure problems, Aragon merely asked how long such a sale would take. “Some time,” Swingle responded.
SCHOOLING THE COMMISSIONERS
Swingle’s insistence that the city move away from the practice of deficit spending supported by utility fund transfers means the city commission will have to be more transparent about its budgetary priorities. Currently, utility customers pay a hidden tax to support general government operations, without being informed that is where their fees are going.
Unlike other water and electric public utilities owned by corporations or cooperatives, the city’s electric enterprise and other utilities are not subject to the scrutiny of the New Mexico Public Regulation Commission. This means less consumer protection for T or C utility fee payers.
For example, the city is not subject to PRC requirements that electric utilities replace equipment on a schedule and justify any fee increases to the PRC and its customers at public hearings. The city is subject only to the state’s Public Utility Act provisions that vaguely require that:
—”Every rate made, demanded or received by any public utility shall be just and reasonable.” (62-8-1)
—“Every public utility shall furnish adequate, efficient and reasonable service.” (68-8-2)
—“At any hearing involving an increase in rates or charges sought by a public utility, the burden of proof to show that the increased rate or charge is just and reasonable shall be upon the utility.” (62-8-7A)
Chief Financial Officer Carol Kirkpatrick reminded city commissioners during the Aug. 9 budget session that there are two categories of municipal funds: government services and enterprise. Enterprise funds, such as the revenues produced by electric, water, wastewater and solid waste departments, are supposed to be “self-sufficient,” said Kirkpatrick, providing one reason for ending the practice of utility fund transfers and cuts.
Citizens’ wants and needs, city commissioners’ accountability and their ability to solve problems will come to the fore as the city seeks other revenue sources to replace utility transfers into the General Fund.
During the Aug. 9 budget session, the possibility of raising gross receipts and/or property taxes was discussed. The key question from commissioners was “Will it have to go to a vote?” Such votes won’t pass at the polls without explanations to the public about why the money is needed.
City staff will come back to the city commission with more information on GRT and property taxes: how much state law permits such taxes to be raised and at what point such increases trigger the requirement to seek voter approval.
During his two budget sessions Swingle has also repeatedly told the city commissioners they are supposed to be making the policy decisions, such as how much to cut from each department’s budget, which employees should receive raises, which user fees should go up and which departments should be allowed to purchase equipment.
“It’s my job to execute your policy decisions,” Swingle has told the commissioners. Since Swingle is bringing policy decisions to the city commission and it can only take action in public meetings while sitting as a body, according to the state’s Open Meetings Act, the workings of city government and the city’s problems have been brought into the sunshine to a greater degree since his hiring.
Previous city managers have determined policy and have not had to observe spending caps. Swingle, in his first week on the job, placed a resolution before the commissioners that clearly defines their authority and his. The commission is now responsible for approving all purchases over $20,000.
COMMISSIONERS’ LEARNING CURVE
Yet it is clear, from statements made by city commissioners, as well as from their silences, they still expect to be told by the city manager and city staff what the final decision on any issue should be.
City Commissioner Frances Luna has, during her 11-month tenure, regularly abdicated her duty to act as a fiscal overseer, saying such things as “I trust [City Attorney] Jay Rubin and “I have complete faith in Jesse Cole [water and wastewater departments director].” She has made similar statements of confidence in Electric Department Director Bo Easley.
During the two budget sessions Mayor Sandra Whitehead and Commissioner Aragon resisted making policy decisions, frequently asking Swingle: “What do you think?” “You know what’s going on; you need to tell us,” Aragon said to explain his deference. As always, City Commissioner Paul Baca remained silent, and Mayor Pro Tem Amanda Forrister contributed no policy guidance.
During the Aug. 9 session, Luna, Aragon and Whitehead did provide indications of the priorities that probably will guide their fiscal-policy decisions during this cash crisis.
“Look at Lordsburg,” Luna said, stating that this borderlands New Mexico city, which has cut community services, is “dead.” “No one wants to live where there are no services,” Luna opined. “If we close the pool and the golf course, it makes me want to leave. I don’t want to be a representative of a town like that.”
“I concur with everything Commissioner Luna said,” responded Aragon, who was seated in April 2020.
Whitehead, a city commissioner for 10 years, did not acknowledge the infrastructure emergencies, the cash crisis, her part in steering spending policy into non-transparent deficit spending or the need to change financial direction. Whitehead’s lack of constituent focus and overarching concern that the needs of city employee take precedence was, however, on full display.
“Our employees are suffering,” Whitehead said. “We have to close the pool because we don’t have anybody to run it. Because of rain, the golf course is closed. We can’t cut services. We have seniors that depend on them. We didn’t replace lost employees and our [remaining] employees are overwhelmed. They [constituents] make it sound like we’ve done nothing. Without happy employees, we might as well close everything.”
Whitehead is seeking re-election this November.
Luna, who was appointed to the commission seat vacated by Brendan Tolley in October 2020, has repeatedly said during commission meetings that it was “drilled into [her] head” by previous city commissioners that “we are an electric company running a city.” Now that the electric company can no longer support deficit spending, it appears Luna is no longer interested in serving as city commissioner. She has attended several city commission meetings by phone, contributing nothing to discussions and largely failing to respond when votes were taken.
Luna has decided not to run to retain her commission seat this November.
Discharging the duties of a commissioner is difficult and requires doing home work, learning the issues, being able to analyze and frequently making unpopular decisions. Apparently, many of the current office holders are not up to the task!
Holding office by virtue of being a graduate of Hot Springs High School should not be the sole qualification for election.