City Council

AGENDA ... for the Regular Meeting of the Farmington City Council to be held at 6:00 p.m., Tuesday, April 10, 2018 in the Council Chamber, City Hall , 800 Municipal Drive, Farmington, New Mexico . . . 1. Roll Call and Convening the Meeting: 2. Invocation: Pastor David Florez of The Journey Church . 3. Pledge of Allegiance: 4. Acceptance of Consent Agenda: Those items on the agenda that are marked with an asterisk (*) have been placed on the Consent Agenda and will be voted on without discussion with one motion. If any item proposed does not meet with approval of all Councilors or if a citizen so requests , that item will be heard under Business from the Floor. 5. *Approval of Minutes for: (a) the Regular Meeting of the City Council held March 27, 2018; and---- 7 (b) the Regular Work Session of the City Council held March 20, 2018. -- 8 6. *Approval of a Receiver's Deed for conveyance to the City by C. Randel Lewis, the Receiver for AV Water Co., LLC, of Lot 1 of the 4 Pump Subdivision in exchange for forgiveness of $8,200 owed to the City for delivery of water and other valuable considerations .------------------------------------------------------- 1 7. *Approval of Warrants up to and including April?, 2018. 8. Proclamation declaring April 15 through 21 , 2018 as "National Water Week." 9. New Business: (a) Mayor (1) Presentation of the Mayor's Citizenship Award to Ann Marie's Dance Academy. (2) Recognition of the Farmington Walmart stores for their Corporate Community Partnership. (b) Councilors (c) City Manager (1) Discussion and approval of the Electric Utility's revised Cash and Dividend Policy. --------------------------------------------------------------------- 2 1 ~------ - - - -- - (d) City Attorney (1) Resolution -setting and establishing a regular meeting day, time and place for City Council meetings pursuant to City Council Resolution No. 2 0 13-1466. ---------------------------------------------------------------------- 3 (2) Ordinance No. 2018-1306- Final Action -amending Section 26-2-40 of the City Code dealing with penalties for violation of water use restrictions (Published March 25, 2018)------ 4 (e) City Clerk 10. Business from the Floor: (1) Items removed from Consent Agenda for discussion. (2) Any other Business from the Floor. 11 . Closed Meeting to discuss requests for qualification-based proposals for professional engineering services for the Four Corners Regional Airport and the 201h Street Pedestrian Enhancement Project, Phase Ill , pursuant to Section 10-15-1 H(6) NMSA 1978. 12. Proposal: Recommendation from the Chief Procurement Officer to commence negotiations on the qualification-based proposal for professional engineering services for the Four Corners Reg ional Airport with Armstrong Consultants, Inc. as the top evaluated firm . Proposals opened March 20 , 2018 with three offerors participating . ------------------------------------ 5 13. Proposal: Recommendation from the Contracts Administrator to commence negotiations on the qualification-based proposal for professional engineering services for the 20 1h Street Pedestrian Enhancement Project, Phase Ill (Public Works) with Russell Planning & Eng ineering , Inc. as the top evaluated firm after application of the five percent in-state and Veterans preferences. Proposals opened March 22, 2018 with three offerors pa rti ci pa tin g . ---------------------------------------------------------------------------------- 6 14. Adjournment. AGENDA ITEM SUPPORT MATERIALS ARE AVAILABLE FOR INSPECTION AND/OR PURCHASE AT THE OFFICE OF THE CITY CLERK, 800 MUNICIPAL DRIVE, FARMINGTON, NEW MEXICO. ATTENTION PERSONS WITH DISABILITIES: The meeting room and facilities are fully accessible to persons with mobility disabilities. If you plan to attend the meeting and will need an auxiliary aid or service, please contact the City Clerk's Office at 599-1106 or 599-1101 prior to the meeting so that arrangements can be made. 2 City of Farmington- Public Works Dept. INTER OFFICE MEMO Date: March 28, 2018 TO: Mayor and City Council From: Jeff Smaka, Water I Wastewater Utilities Administrator CC: David Sypher, Public Works Director Rob Mayes, City Manager RE: Receiver's Deed (Bargain and Sale Deed Without Covenants) Animas Valley Land and Water Purchase Agreement 4P Pump Station The Animas Valley Land and Water Purchase Agreement provides for the City to purchase a segment of land from Animas Valley Land and Water (.22 acres). The purpose is to relocate the existing 4P Water Pump Station, presently located near Mesa View Jr High School, to the location indicated on the purchase agreement with Animas Valley Land and Water Company. An independent appraisal service was hired to appraise the current value ($8200). AV Water has accepted this valve for purchase. The anticipated start-up for the project was last spring - early summer 2017. Subsequent to further litigation, the Receiver for AV Water Company, C. Randel Lewis, has provided the "Receiver's Deed" for the 4P Pump Station site. The negotiated price is $8 ,200.00 in forgiveness of amounts due and owing to the City of Farmington. Once fully executed the deed will be filed with San Juan County. We respectfully request this agreement placed on the AprillO, 2018 Consent Agenda for City Council. - 1.0-  4 P Water Zone The existing 4P Pump Station is not able to keep up with the summer demands due to its location. The 4P Zone has grown substantially since the pump station was built. This station also serves the Animas Valley Water (AVW) area connected in August 2015 during the Gold King Mine spill emergency. The property surrounding the pump station was originally owned by the City of Albuquerque but was later sold for private development. The new pump station location will be at a lower elevation to accommodate current and future growth in the 4P water zone. The lot is however unique as it meets the needed pump station criteria of both elevation and immediate access to the water main. The proposed new One Million Dollar pump station is ready to install on the new subject lot. This location will facilitate reliable efficient service with capacity to serve the area for current and future growth which results in reliability and in avoided future cost for all customers. This upgrade will also allow for the temporary system, located on the right-of -way intersection of Browning Parkway and Wildflower, to be removed. In October 2016 an appraisal was performed and an agreed purchase value of $8,200 was established. The purchase amount will be provided in consideration of $8,200 against the existing AVW water utility bill. Unfortunately, the release of the property was held in receivership until late March 2018 . It is recommended that Farmington City Council accept this land parcel for the new 4P pumpstation under the terms as describe above. - 1.1 -  C ITY OF FA RMINGTON, NEW MEX ICO I OF I ,.. _ _ _ 11.\R - - - [ltV.l • • - - - " " _ _ _ >Yo PUBLIC WO RKS DEPARTMENT WILDFLOWER PARKWAY PUMP STATIONS SHEETS  ------- -- ------------- ---. RECEIVER'S DEED (Bargain and Sale Deed Without Covenants) KNOW ALL BY THESE PRESENT that C. Randel Lewis, the Receiver for AV Water Co., LLC, hereinafter called Grantor, does hereby grant, bargain, sell and convey unto the City of Farmington, New Mexico, hereinafter called Grantee, and unto Grantee's heirs, successors and assigns, that certain real property, with improvements, tenements, hereditaments and appurtenances thereunto belonging or in any way appertaining, situated in San Juan County, State ofNew Mexico, described as follows: Lot 1 of the 4 PUMP SUBDNISION, in the City of Farmington, County of San Juan, State of New Mexico as shown on the Plat of said Subdivision filed for record on April 10, 2017 (the "Lot 1 Property"). TOGETHER with all right, title and interest, if any, of the Grantor. TO HAVE AND TO HOLD the premises herein granted to the Grantee, their successors and assigns forever. THE CONSIDERATION paid for this transfer, is in the form of a forgiveness by Grantee of $8,200.00, in amounts due and owing to the City of Farmington, New Mexico, for the delivery of water to the A V Water Co., LLC and for other valuable consideration. IN WITNESS WHEREOF, the Grantor has executed this instrument on March ~ 2018, any signature on behalf of a business or other entity is made with the authority of that entity. THE CITY OF FARMINGTON, NM: by: ________________________ Mayor G~ - 1.3- - - -- - -- - -- - - - - - - - - - - - - - - - ---- -- - - - ------ STATE OF ____________ ) ) ss. COUNTY OF _ _ _ _ __ ) This instrument was acknowledged before me on March _ , 2018, by My commission expires _ _ _ __ NOTARY PUBLIC STATE OF New fu'f,·ct> ) ) ss. COUNTY OF 2-Ax\ :fi.A.O-X\ ) ' This instrument was acknowledged before me on March ~~ 2018, by C ."f?n.hd e..\ Lew \6 , o..s Re.c.f \\1 e-r +6v- f\'i»fo...-*ex- Co "~ L- LC..- · My commission expires ollk/osfao \ q NOTARY PUBLIC OFFICIAL SEAL VALARIE AMORMINO ~~f/ NOTARY PUBLIC.StateofNew Mexi4:o ~·~ExP .... as lgs/a.[n - - ·- ' ---- -·---~ - 1.4- MenDrandum To: Rob Mayes, City Manager From: Andy Mason, Administrative Services Director Date: March 8, 2018 Re: Electric Utility Cash and Dividend Policy Revision Cash Reserve Policy Amendments to the current Cash and Dividend Policy were last adopted in 2011. The formula for calculating the cash reserve level for the Electric Utility Fund consists of several components which, when added up, generally equal 16% - 18% of annual budgeted expenses. Applying the current policy dollar amount of using the FY18 annual budget of $113 million and dividing by the current cash reserve of $18.4 million yields a cash reserve of 16.3% Staff believes this level of cash reserve for the Farmington Electric Utility System (FEUS) is less than what would be a more conservative prudent level of reserves in the case of an emergency. When considering what level of cash reserve should be maintained, the replacement cost of the utility's capital assets must be examined since these assets are significantly high dollar replacements. I believe that a higher level of reserves would be more advisable and that the reserve policy be revised to equal twenty-five (25%) of the total annual Electric Utility budget. If this revision was currently in place, the FY18 budget of $113 million multiplied by a 25% factor would yield a more conservative cash reserve of $28 million. This level of reserves would provide a greater degree of confidence in the event of an emergency. Dividend Payment Policy The electric utility's annual dividend payment policy was originally adopted in May 2011. The dividend payment to the City's General Fund is based on the utility's year-end net income multiplied by forty percent (40%). This method of calculation is subject to greater volatility due to the actual and potential fluctuation in the utility's annual expenses which directly affects net income. Some of the factors that can impact expenses are reclamation cost swings, decommissioning plant costs, and accounting principle changes such as unfunded pension and health cost liabilities. These elements create greater inconsistency from year-to-year in net income and the resulting dividend dollar amount fluctuates more widely. My recommendation is to revise the calculation of the dividend to a revenue based approach which would equal a fixed percentage applied to the annual revenue of the electric utility. A five percent (5%) factor times the annual revenue dollar amount would provide a more consistent and less volatile level of dividend from year-to-year. If 5% were applied to the annual revenue in FY2018 the dividend amount would equal $5.1 million. By means of comparison, the current policy of 40% times net income produced a dividend in FY2016 of $5.7 million, FY2017 was $5.3 million, and the current year of FY2018 is $5.0 million. However, earlier year dividends were much higher in the $7 - $8 million range. Again, the revenue based approach would yield greater consistency from year- to-year plus provide more predictability when factored into the electric utility's periodic cost of service studies. This method of dividend calculation is also very commonly employed within the municipal power industry. Please let me know if you have any questions regarding these recommendations. -2.0-  Dividend Policy Evaluation 40% of Net Income FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 ~ Projected Projected Pro jected Projected Projected ... "6 Actual Actual Actual Actual Actual Actual Actual Budset Budget Bud1et Budset Budset Bud set ~ ~ Inco me (loss) Befo re Transfe rs 14,454,467 11,844,473 17,175,987 14,073,969 13,281,361 12,336,703 4,927,002 3,962,334 5,408,140 4,045,809 4,701,191 5,374,797 6,067,086 v " 40% of Net Income Dividend (current policy) 5,782,636 8,140,386 7,459,646 6,429,504 6,870,396 5,687,378 5,344,776 4,934,796 1,970,801 1,584,934 2,163,256 1,618,324 1,880,476 5% of Gross Revenue -~ ......91 "6 FY2019 FY20ZO FYZOZl FYZOZZ FYZOZ3 FY2011 FY2012 FY2013 FY2014 FY2016 FY2015 Actual FY2017 Actual rno1a Budset Projected Projected Projected Projected Projected Actual Actual Actual Actual Actual ...0 Budset Budcet Buclset Budset Budset ...e Total Operating Revenue 91,451.673 95.742.961 102.124.215 99.529.498 105,907.531 102,230,879 93,276,798 99,936,289 101,162,978 103,692,052 106,284,334 108,941,463 111,664,999 Total Over 8-Year Actuals 39,509,992 5% of Gross Revenue Dividend 4,572,584 4,787,148 5,106,211 4,976,475 5,295,377 5,111,544 4,663,840 4,996,814 5,058,149 5,184,603 5,314,217 5,447,073 5,583,250 50,649,518 40% of Net Income Dividend 5,782,636 8,140,386 7,459,646 6,429,504 6,870,396 5,687,378 5,344,776 4,934,796 1,970,801 1,584,934 2, 163,256 1,618,324 1,880,476 Variance 5% Gross (11,139,526) Revenue/40% Net Income (1,210,052) (3,353,238) (2,353,435) (1,453,029) (1,575,019) (575,834) (680,936) 62,018 3,087,348 3,599,669 3,150,961 3,828,749 3,702,774 40% of Net Income vs. 5% of Gross Revenue 1\) ~ -<r 40% of Net Income (Current Policy) 5% of Gross Revenue FY2011 ACTUAL FY2012 ACTUAL FY2013 ACTUAL FY2014 ACTUAL FY2015 ACTUAl FY2016 ACTUAL FY2017 ACTUAL FY2018 BUDG£T FY2019 PROJECTED FY2020 PROJECTED FY1021 PROJECTED FY2022 PROJECTED FY2023 PROJECTED BUDGET BUDGET BUDGET BUDGET BUDGET 1 Pension liabilities were excluded from all calculations. For Projected Electric Actual Expenses: 2 Operating expenses were increased by 2.5% annually. 3 Salaries and benefits were increased by 2% annually. 4 Interest expense of $455,000 was added beginning in FY2019 for a $13M bond for reciprocating engines at 3.5% APR . It was considered that the bond would sell at par value . Depreciation was estimated based on financial history. Projections used the 5-year CIP plan for new assets additions. Depreciation for two (2) reciprocating engines with an estimated 25 year life was added 5 in FY2020. 6 The 5-year average purchased power expense is 42% of gross revenue. For Projected Electric Actual Revenue: 7 Projected revenue is based on the 5-year CIP Plan revenue projection. Projected revenue is estimated at a 2.4% annual increase. 8 Investment income is estimated at $500,000 annually based on financial history.  Dividend Calculation 1 Excessive Depreciation In the past 5 years, significant investment has been made in required capital asset maintenance, improvements, and new projects. As a result of this intensified emphasis, capital investment depreciation expense has increased by $4M during FY2013-FY2017. The increase in depreciation expense has had a significant impact on net income. This impact would be even more dramatic if a large generation asset was constructed . 2 Unfunded Pension Liability (Non-Cash transaction) As per new government accounting standards (GASB #68), the municipality's share of the State PERA pension liability must be reflected on the financial statements. The new accounting change can cause pension liability to increase or decrease and significantly affect net income. In FY2017, $2,032,495 in increased pension liability reduced net income. The amount is determined by the NM State PERA's annual actuarial valuation study and can vary from year-to-year based on the investment market. 3 SJJCC Coal Reclamation As requiered by the owners agreement, coal reclamation costs have been paid over a 6-year period (75% of these costs in the past 2 years) instead of being spread over the 30 year life of ownership by the City of .NN Farmington. Over the last 5 years (FY2013-FY2017), the City's accumulated reclamation expense totaled $2,392,867. In FY2018, net income will be reduced by $2.9M in coal reclamation costs as was projected. 4 Uniformity and Transparency A dividend calculation based on gross revenue produces a transparent amount with less annual volatility. This simple calculation is conducive to the Electric Utility cost of service planning. A dividend based on gross revenue will not be affected by changes in accounting standards relative to expenses nor will the dividend be impacted by major capital project costs. 5 External Auditor Opinion The philosophy behind and formula to calculate the gross revenue dividend have been discussed with the City's external auditors. The external auditors found this method acceptable and relayed that this approach is a commonly accepted practice in the municipal power industry nationwide. 6 Cash Reserve Policy Approach Current FEUS cash reserve is about $18M, which is 16% of the total FEUS budget of $113M. This amount covers approximately 2 months of operations. Proposed changes to the cash reserve policy will increase FEUS cash reserve up to $28M or 25% of the total budget and will cover 3 months of operations. - - -- - -- - - - - - - - - - - - - Farmington Electric Utility Cash Reserve and Transfer Dividend Policy I. PURPOSE The purpose of this policy is to ensure the electric utility maintain a prudent level of cash reserve to ensure the utility ' s ability to operate and maintain its facilities and provide reliable, quality and reasonably priced electricity to its customers while mitigating current and future risks due to unforeseen circumstances. This policy also provides for the annual payment of a dividend to the City for its ownership interest in the Electric Utility. The Farmington Electric Utility is a municipally-owned, non-profit electric utility providing service to 45,000 customers in San Juan and Rio Arriba counties within 171 ~are miles. It is an enterprise fund which receives no tax monies from the public in the municipalities and counties within which it provides electricity to its customers. The Electric Utility does issue bonds to fund large projects; to ensure it receives the lowest interest rates possible on its bonds to mitigate costs to its customers, the Electric Utility has maintained an A+ rating. On a regular basis, the Electric Utility provides information to Fitch and Standard and Poors and is re-evaluated on its rating. Rating agencies, the Utility's financial advisor and management have clearly articulated the need for a detailed policy as to how much cash should be in reserve and under what guidelines should the Electric Utility pay the City of Farmington's General Fund a Dividend Payment. II. ADMINISTRATION The Director of Administrative Services, or his/her designee, will administer the investment of the Electric Utility' s cash and the Electric Utility Director, or his/her designee, will administer the calculation of the cash reserve fund and verify funds reimbursed/paid to the general fund as established in this policy for the Cost Allocation Reimbursement and Franchise Fee to the General Fund for Services Rendered and the Dividend Payment as established in this policy. III. DEFINITIONS c. Capital Expenditures shall mean those f'.md~• expended to purchase Capital Equipment f OnstFuct. renew and / or maintain the electric system for providing reliable elect£!:£ service or meeting federal, state, county or local rules and regulations. d. Capital Fund ~;hall mean the Electric Utility's capital improvement plan to ensure th ~ availabi !ln' of resources to meet a minimum electric construction schedule. Pit!!.tJ '! !·')_!,L>:::•J ' , ~- ~-," •.,u,. ;...- '" .U ' ...1> ,..,~ , 1 ~ o,_.,c·....,,J 1-J,-..,.,,v.,•l.- )o "'~ o}! lll<>.lJ:o•J"r>;1 •o',..-'o'llH·l,l-~1-"lid•l' -2.3- e. b f.~ Cash shall mean those funds on hand or readily accessible through short term investments or expected inter-fund borrowings, bonds or loans. g:-!L__Cash Reserve shall mean the sum calculated pursuant to Section IV.b in this Policy. ~· Customer Utility Deposit shall mean the cash deposits collected from customers as a result of the Electric Utility ' s Rule and Regulation No. 3 wherein if the customer has l1ot had any returned checks, late payment or noticeL; for disconnection for a year may be relunded thereby requiring the utility to maintain surticienl cash in the account ro ensure payment to the customer '.vhen they become eligible for the refund. 1. Construction Deposits shall mean those funds received hy the Electric Utility from its customers to pay for the construction of any facilities necessary for the customer to _j.,~Cost Allocation Reimbursement to General Fund shall mean a net of the cost allocation reimbursement made by the Electric Utility to the General Fund for payment of services rendered by the General Fund to the Electric Utility and payment of services rendered by the Electric Utility to the General Fund, the Water and Waste Water Funds. The amount to be transferred will be based upon the Cost Allocation Plan developed by an independent qualified consultant from the two (2) years prior fiscal year actual data that will be reviewed and agreed upon between the Electric Utility and the Administrative Services Departments. t< . Depreciation shall mean the expense booked vihen the purchase price of a fixed asset is reduced over time, or its useful life, by \vear and tear. k!:L_Dividend Payment shall mean a return on the City' s investment by virtue of its ownership of the Electric Utility and the amount calculated pursuant to Section VII.b in this Policy. fl't:-_Q_,_Franchise Fees shall mean those fees payable to San Juan County, Rio Arriba County, the City of Bloomfield, the City of Farmington or any other entity requiring a franchise payment for the use of rights-of-way and easements. A-;L_ General Fund shall mean the chief operating fund of the City that acqmnts for all financial resources except those required to be accounted for in another fund. &.-&_Interest Expense shall mean any interest paid to banks, bondholders, New Mexico Finance Authority, other organizations and customers for loans, advances or deposits. p-:-.L_Net Income shall mean the GAAP "Income (Lo~ Before Transfers" "Change in Net Position" as shown in the Electric Utility Statement of Revenues, Expenses and Changes in l4:m6 Net Position Assets of the City' s most recent audited comprehensive annual financial report (CAFR). q-:-t. Non-Operating Revenues shall mean GAAP Total Non-Operating Revenues as shown in the Electric Utility Statement of Revenues, Expenses and Changes in Net Position of the City's most recent audited comprehensive annual financial report (CAFR). Non-Operating revenues are that portion of the utilitv's income that is derived from activities not related to its core operations. Non-operating income can include such items as profits and losses from investments, interfund transfers, and customer capital contributions. F-:-J . Operating Revenues shall mean Total Operating Revenues as shown in the Electric Utility Statement of Revenues, Expenses and Changes in Net Position of the City's most recent audited comprehensive annual financial report (CAFR). Operating revenues are generated from a companv's core, day-to-day business activities, which means revenue posted from selling the utilitv's products and ~ .,~ .. Ll:' ·' . ~lrJ..-~ ~"' 1.1 1h ... - ::. "'l'-"" J.>v~ot'r-l:•"" ,), ... ')olol,,.,)r,..j.;,;..}o ;a .. .),..._, ~- ..... 1~8· -2.4- ,------ - -- - - - --- services. Operating revenues can include customer power sales and miscellaneous fees and charges related to providing electric power to the utility's customers. s. Operating Expenses shall mean those expem;es necessary to operate and maintain f acilities O'vVned by the Electric Utility to provide electric ~;eFvice to its customers. t. Operating Fund shall mean the Electric Utility's operating and maintenance exRense accounts not including capital expenditure~;, electric construction, amortization r ' .._ .._ . . .._ fu r new construction in accordance 'tVith the Electric utility's Rule and Regulation No. 17 prior to July I, 2008 . ln accordance to the Rale at that time, the total, a portion or r ene of the deposit may be refunded to the customer upon a three year period thereby b:;;:::!:::t~:i ~; :~ ::~:~:::rt:~:::~~==l~:::::::~~::::::::c~::re is still a balance owed to customers for construction that has been delayed due to obtaining easement I rights of way. ~ Renewal and Replacement Fund shall mean the ca~;h reserve to ensure the utilil)' '>Viii ~ ave sufticient cash to rebuild or replace equipment in case of a major loss. IV. CASH RESERVE a. Purpose of Cash Reserve The following will be used to calculate the minimum cash reserve the Electric Utility should maintain to ensure it has sufficient funds should unexpected events occur such as long term damage to a generation facility requiring costly repairs, major investment in facilities required by federal or state laws and regulations, lawsuits, whereby a delay would occur prior to recovery from customers through rate increases, a wind or ice storm that would damage electricity delivery structures or facilities or there be a downturn in local area economics that would impact the collection of near-term revenues. b. Calculation of Cash Reserve The Electric Utility Cash Reserve shall be calculated l:lSffi.g by multiplying the upcoming budget year expense estimate by twenty-five percent (25%). and will be the sum of t8e following: 1. Twenty fin percent (25%) of the electric utility's Operating Fund; plus, 11. One hundred (100%) of the Current Portion.:Q.[princi~ and interest on Electric System Revenue Bonds; plus, 111. One hundred percent ( l 00%) of Restricted Cash Accounts, Refundable Construction Deposits, Customer Utility Deposits, ~ense Accounts and Bond Contingency Resen'e; plus, tY. One hundred percent (I 00%) equal to t8e largest insurance deductible related to the Electric Utility's insurance coverage; plus, Y. One percent (1%) of the original cost of the electric utility's assettP.rior to any ~reciation deductio!!§::f!lus, 1> ... I-'~'"' I >tO<dll<>..UO!I<I" o')lo(;..)<..,\,14\H.dOto<. -2.5-  v1. AAy reserve aeeouAts v1hich may be recommeAded by the PUC aAd ~ lemeAted by City Council iH the future . The cash reserves shall be maintained for the strict purpose of Electric Utility emergencies and refunding monies deposited by customers on a temporary basis. The Electric Utility' s cash reserves shall not fall below the amount calculated pursuant to this section unless an emergency occurs. In the event of an emergency or unforeseen circumstance to expend the cash reserve below the 25% policy reserve level, notice will be given and information shared with the Public Utility Commission (PUC) as soon as practicable. The intent is to provide transparency and due diligence relative to the PUC, but nothing herein should be interpreted as limiting the City Manager's discretion within existing City Council policy or any new action by the City Council. V. FRANCHISE FEE a. Purpose of Franchise Fee The Purpose of the Franchise Fee is for the Electric Utility to pay the municipality for the use of its rights of way within the City of Farmington City limits. b. Calculation of Franchise Fee The Franchise Fee to be used in the upcoming budget year shall be calculated annually using the previous year's audited actual revenues earned through established Electric Utility Tariffs within the City of Farmington city limits multiplied by five percent (5%). VI. COST ALLOCATION REIMBURSEMENT TO GENERAL FUND a. Purpose of the Cost Allocation Reimbursement to General Fund The purpose of the reimbursement to the General Fund from the Electric Utility is to compensate for the cost of central services and support the General Fund provides to the Electric Utility. Because the Electric Utility incurs expenditures that benefit the General Fund, the amount of the reimbursement is the difference between the expenditures incurred by the General Fund to benefit the Electric Utility and the expenditures incurred by the Electric Utility that benefit the General Fund. b. Calculation of the Cost Allocation Reimbursement to General Fund The calculation of the Cost Allocation Reimbursement to the General Fund will be based upon actual expenses incurred in the fiscal year two years prior to the budget year being developed. For example, for budget year 2012, 2010 actual expenses will be used for the calculation. An independent qualified cost allocation plan consultant will perform a review and analysis of the support service expenditures and complete the calculation of full cost allocations between funds. ~·-·- .... i<I~~;Jo .,)1 ...uo. <!t>G ...,.-,.)<,...a. a,,... -2.6- VII. DIVIDEND PAYMENT a. Purpose of the Dividend Payment The purpose of the Dividend Payment is to pay the City for its ownership of the Electric Utility. As the owner of the Electric Utility, the City will be paid an annual Dividend based on the net income of the Electric Utility. b. Calculation of the Dividend Payment The calculation of the Dividend Payment will be based upon the net iaeeme sum of operating revenues plus non-operating revenues (excluding "transfers in" and customer capital contributions) multiplied by feft;l pereent (40%) five percent (5%) . Net ineeme is defined in Seetien:!!L:PcQ:f this peliey. ~on-Qo perating revenues and ~W&-operating revenues are defined in Section III.Fi. and Ill.qj . of this policy. VIII. INVESTMENT OF ELECTRIC UTILITY CASH It is intended that Electric Utility fund (cash) balances be fully invested at all times in investment instruments that are appropriate. Investments will be made by the City Treasurer or his/her designee after consulting with the Electric Utility Director about cash flow requirements. The City' s Investment Policy shall govern all investment transactions. IX. REVISIONS Revisions to this Policy will be approved by majority vote of the City Council. Proposed revisions will first be submitted to the City's Board of Public Utility Commissioners for their recommendation prior to being presented to the City Council. X. SECTION 7: APPROVAL This Electric Utility Fund Cash and Dividend Policy was approved by the City Council on May 10, ~ AprillOMav , 2018. Original: 2001 Revision # 1: October 7, 2003 Revision #2 : August 7, 2007 Revision #3 May 10,2011 .,.,.. lo!< " ... u...iHI'I(J~.~..,_.... tol-'rU<. •fliioV.....:k' ... n.o~ -:><.,} -2.7-  RESOLUTION A RESOLUTION SETTING AND ESTABLISHING A REGULAR MEETING DAY, TIME AND PLACE FOR THE CITY COUNCIL MEETINGS PURSUANT TO CITY COUNCIL RESOLUTION NO. 2013-1466 AS RATIFIED WHEREAS, pursuant to the provisions of Resolution No. 2013-1466 as ratified, each board, commission, commission or other policy making body of the City of Farmington which holds regular meetings shall annually establish a regular meeting day, time and place; and WHEREAS, the City Council of the City of Farmington has determined and does recommend to the City Council that the regular meeting day, time and place of the City Council Meetings of the City of Farmington and the location where a copy of the agenda of such meetings may be obtained shall be as set forth in this resolution. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FARMINGTON: That the regular meeting day, time and place of the City Council Meetings of the City of Farmington shall be held on the second and fourth Tuesday of each month at 6:00p.m., in the Council Chambers, Municipal Building, 800 Municipal Drive, Farmington, New Mexico and the location where a copy of the agenda of the regular meeting may be inspected seventy-two (72) hours in advance of such meeting shall be at the City Clerk's Office, Municipal Building, 800 Municipal Drive, Farmington, New Mexico. PASSED, SIGNED, APPROVED and ADOPTED this lOth day of April, 2018. By__________________________ Nate Duckett, Mayor -3.0-  ORDINANCE NO. 2018-1306 AN ORDINANCE AMENDING SECTION 26 - 2 - 40 OF THE FARMINGTON CITY CODE DEALING WITH PENALTIES FOR VIOLATION OF WATER USE RESTRICTIONS WHEREAS , Lake Farmington is the City's primary protection against drought; and WHEREAS , current snow pack is at 52 . 17 percent of normal and precipitation is at the 30 - 50 percent level; and WHEREAS, precipitation projections on February 20, 2018 going forward indicate a 33 - 40 percent probability of normal , the Palmer Drought Index at -1.9 to +1.9 (near normal) category and the stream flow indicator at the Azte c gauge was 79 percent of normal; and WHEREAS, the Farmington City Council reviewed the Drought Management Plan and recommendations at its regular Work Session meeting of February 20, 2018 ; and WHEREAS , the Farmington Board of Public Utility Commissioners did , at their regular meeting of March 14, 2018 , review the proposed rate changes as presented in the Drought Management Plan and recommend to the City Council that the current penalties for violation of water use restrictions be so amended. NOW , THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF FARMINGTON THAT: SECTION ONE : Section 26 - 2-40 of the Farmington City Code is amended to read as follows: Sec. 26 - 2 - 40. - Penalties for violation of water use restrictions . (a) All violations of stage 2 , 3 or 4 water use restrictions shall be under the jurisdiction of the water conservation hearing officer, who shall be the city manager, or such other person designated by the city manager, to serve as an impartial arbitrator at any hearings related to the enforcement of this chapter . Any person, firm , or corporation who is determined to have violated any required provision of this division shall be required to pay the following fees: Stage 2 - Water shortage watch First violation Notice of violation-no fee. Second violation $100.00 Third violation $300.00 Fourth and subsequent violations $500.00 or termination of service . Stage 3 - Water shortage warning First violation Notice of violation - no fee . Second violation $200.00 Third violation $400.00 Fourth and subsequent violations 500 . 00 or termination of service . Stage 4 - Water shortage emergency First violation $200 . 00 Second violation $400 . 00 Third or subsequent violations $500.00 or termination of service. PASSED , APPROVED, SIGNED AND ADOPTED this 10 th day of April, 2018 . Nate Duckett, Mayor SEAL ATTEST: Dianne Smylie, City Clerk -4.0-  CITY OF FARMINGTON INTER-OFFICE MEMORANDUM TO : Mayor Duckett and City Council FROM : Kristi Benson, CPPO, CPPB Chief Procurement Officer it.b DATE: April 3, 2018 SUBJECT: RFQP: Professional Engineering Services for the Four Corners Regional Airport, RFP #18-125464 USING DEPARTMENT: Airport ======================================== A proposal opening was held on March 20, 2018 for Professional Engineering Services for the Four Corners Regional Airport. Three offers were submitted . The Central Purchasing Department concurs with the recommendation from the evaluation committee to begin negotiations with Armstrong Consultants, Inc. , the top evaluated firm . The in-state or Veterans preference does not apply due to federal funding . The final rankings are listed below: Armstrong Consultants, Inc. -Albuquerque, NM Bohannan Huston , Inc. -Albuquerque, NM WHPacific, Inc. -Albuquerque, NM Kristi Benson (Presenter) Council Meeting April10, 2018 Close/Reopen xc: H. Andrew Mason, CPFO, Administrative Services Director Julie Baird, Assistant City Manager Michael Lewis, Airport Manager File - 18-125464 Evaluation Committee: Drake Dalton , Public Works David Sypher, Public Works Julie Baird, Administration Jennifer Breakell, Legal Michael Lewis, Airport -5.0- ,-------- - - - - -- -- - - - - - · - - - CITY OF FARMINGTON INTER-OFFICE MEMORANDUM TO: Mayor Duckett and City Council FROM: Rosalyn Potter, CPPB Contracts Administrator DATE: April4 , 2018 SUBJECT: Engineering Services for 20th Street- Phase 3, RFP #18-125434 USING DEPARTMENT: Public Works ---------------------------------------- A proposal opening was held on March 22, 2018 for Engineering Services for 20th Street- Phase 3. Three (3) offers were submitted. The Central Purchasing Department concurs with the recommendation from the evaluation committee to begin negotiations with Russell Planning & Engineering, Inc., the top evaluated firm. The in-state or Veterans preference was given to qualified Offerors. The final rankings are listed below: Russell Planning & Engineering, Inc. -Durango, CO Souder, Miller & Associates- Farmington , NM Occam Engineers Inc. -Albuquerque, NM Rosalyn Potter, Contracts Administrator (Presenter) City Council Meeting 4/1 0/18, Close/Reopen xc: H. Andrew Mason , Administrative Services Director David Sypher, Public Works Director Nica Westerling, City Engineer File - 18-125434 Evaluation Committee: Virginia King, Public Works Nica Westerling , Public Works Melody Coyner, Legal -6.0- -------------------~~~------ Regular Meeting of the City Council , City of Farmington, New Mexico, held in the Council Chamber at City Hall at 6:00 p.m. on Tuesday , March 27 , 2018 . The open regular session was held in full conformity with the laws and ordinances and rules of the Municipality . Upon roll call , the following were found to be present , constituting a quorum : MAYOR Nate Duckett COUNCILORS Linda G. Rodgers Sean E . Sharer Jeanine Bingham-Kelly Janis Jakino constituting all members of said Governing Body . Also present were: CITY MANAGER Rob Mayes ASSISTANT CITY MANAGER Julie Baird CITY ATTORNEY Jennifer Breakell CITY CLERK Dianne Smylie The meeting was convened by the Mayor . Thereupon the following proceedings were duly had and taken: INVOCATION : The invocation was offered by Reverend Rebecca Morgan of First Presbyterian Church. Councilor Jakino led the Pledge of Allegiance . CONSENT AGENDA : The Mayor announced that those items on the agenda marked with an asterisk (*) have been pla c ed on the Consent Agenda and will be voted on without discussion by one motion. He stated that if any item did not meet with approval of all Councilors or if a citizen so requested, that item would be removed from the Consent Agenda and heard under Business from the Floor . *MINUTES: The minutes of the Regular Meeting of the City Council held March 13 , 2018 and the minutes of the Swearing- In Ceremony/Organizational Meeting of the City Council held March 12 , 2018 . *WATER PURCHASE CONTRACT between the City and Upper La Plata Water Users Asso c iation for purchase of treated bulk water ( initial five-year term with up to three five - year automatic renewal periods) . *RESOLUTION NO. 2018 - 1663 approving the Foothills Drive Enhancement Project (Phase II) and accepting funds from the Transportation Alternative Flex Program administered through the New Mexico Department of Transportation. *CONFIRMATION OF THE REAPPOINTMENTS of F . Chester Miller III and Tyson Gobble as Liquor Hearing Officers (terms to expire March 2022) . *WARRANTS PAYABLE for the time period of March 11, 2018 through March 24 , 2018 , for current and prior years, in the amount of $9 , 027 , 265.18 . There being no requests to remove any items , a motion was made by Councilor Rodgers , seconded by Councilor Sharer to approve the Consent Agenda, as presented , and upon voice vote the motion carried unanimously. ROAD SAFETY WEEK PROCLAMATION The Mayor presented Leadership San Juan c lass members Melissa Wood , Kelly Reeves and Brandy Vega with a Proclamation declaring April 1 through 7, 2018 as " Road Safety Week." -7.0-  RECOMMENDATIONS FROM THE PLANNING AND ZONING COMMISSION : *CONSENT AGENDA : Community Development Director Mary Holton requested that the Planning and Zoning Commission recommendations marked with an asterisk (*) be placed on the Planning and Zoning Commission Consent Agenda and voted on without discussion by one motion . She asked that if the items proposed did not meet with approval of all Councilors or if a citizen so r equested , the item would be removed from the Consent Agenda and heard in regular order. *(1) Adoption of the recommendation from the Planning and Zoning Commission as contained within the Community Dev e lopment Department Petit i o n Report to approve Petition No . ZC 18-0 1 from Leaf Properties , represented by Doug Kinsey , requesting a zone change from the MF - M, Multi - Family Medium Density , District to the LNC , Local Neighborhood Commercial , District for 5 . 47 acres of property located on Wildflower Parkway approximately 576 feet east of Wildflower Mesa Drive. *(2) Adoption of the recommendation from the Planning and Zoning Commission as contained within the Community Development Department Petition Report to approve Petition No . SUP 18 - 12 from Mr . 4s LLC , doing business as Traegers , represented by Scott We aver , requesting a Special Use Permit to al l ow a bar to be operated at 5170 College Boulevard , Suite 106 in the LNC , Local Neighborhood Commercial , District , subject to the use meeting all building and fire code requirements . There being no requests to remove any items , a motion was made by Councilor Rodgers , seconded by Councilor Sharer to approve t he Planning and Zoning Commission Consent Agenda , as presented , and upon voice vote the motion carried unanimously . PUBLIC HEARING/RESOLUTION NO . 2018 - 1664/SUBSTANTIAL AMENDMENT TO THE COMMUNITY DEVELOPMENT BLOCK GRANT ("CDBG" ) 2017 ANNUAL ACTION PLAN Mayor Duckett called the public hearing to order. Associate Planner Teri Clashin reported that staff is proposing a substantial amendment to the 2017 CDBG Annual Action Plan for the purpose of reallocating the funds remaining in the Fiscal Year 2010 CDBG allocation ($32 , 338) to the Farmington Boys and Girls Club Teen Center Expansion project for a total distribution of $271 , 964 . She noted that t he proposed amendme n t has be e n open for publ i c review and comment since February 26 , 2018 and pointed out that the Council directed staff to proceed with the proposed amendment at the February 13 , 2018 regular City Council meeting. She requested adoption of Resolution No. 2018 - 1664 approving the proposed amendment . There being no response to the Mayor ' s call for public comments , the public hearing was closed . Thereupon , a motion was made by Councilor Rodgers , seconded by Councilor Sharer that Resolution No . 2018 - 1664 be passed and adopted as presented . The roll was called with the following result : Those voting aye : Linda G. Rodgers Sean E . Sharer Jeanine Bingham-Kelly Janis Jakino Those voting nay: None The presiding officer thereupon declared that four Councilors having voted in favor thereof , the said motion carried and Resolution No . 2018 - 1664 was duly passed and adopted . COUNCIL BUSIN ESS Commendation of Staff/Dumpster Weekend Councilor Rodgers announced that she participated in Dumpster Weekend and she extended her sincere appreciation to the Parks and Recreation Department for organizing and operating the event . - 7.1 -  CITY ATTORNEY BUSINESS City Attorney Jennifer Breakell presented for discussion a proposed ordinance dealing with penalties for violations of water use restrictions . The title of such ordinance being : AN ORDINANCE AMENDING SECTION 26 - 2 - 40 OF THE CITY CODE DEALING WITH PENALTIES FOR VIOLATIONS OF WATER USE RESTRICTIONS. There being no discussion , Ms . Breakell announced that the proposed ordinance will be presented for final action at the April 10, 2018 regular City Council meeting . There being no further business to come before the Council , a motion was made by Councilor Sharer , seconded by Councilor Rodgers to adjourn the meeting at 6 : 14p . m. , and upon voice vote the motion carried unanimously. The City Clerk certified that notice of the foregoing meeting was given by posting pursuant to Resolution No . 2013 - 1466, et seq. Approved this 10th day of April , 2018. Entered in the permanent record book this 11 th day of April , 2018 . Nate Duckett, Mayor SEAL ATTEST : Dianne Smylie , City Clerk -7.2-  Work Session of the City Council , City of Farmington , New Mexico , held Tuesday , March 20, 2018 at 9 : 00 a . m. in the Executive Conference Room at City Hall, 800 Municipal Drive , Farmington , New Mexico , in full conformity with the rules, regulations and ordinances of the municipality . At such meeting the following were present , constituting a quorum: MAYOR Nate Duckett COUNCILORS Linda G. Rodgers Sean E. Sharer Jeanine Bingham- Kelly Janis Jakino constituting all the members of the Governing Body . Also present were: ACTING CITY MANAGER David Sypher CITY ATTORNEY Jennifer Breakell CITY CLERK Dianne Smylie DEPUTY CITY CLERK Andrea Jones PRESENTATION/COLD MILLED STREETS PROGRAM Utilizing a PowerPoint presentation, Public Works Director David Sypher briefly discussed the process of obtaining millings ; reviewed the completed cold mill projects from 2013 , 2015 and 2016 ; and provided before and after pictures of the 2017 cold mill streets pilot program , noting that these projects do not include rejuvenating oil or seal coat. He presented the typical cold mill paving residential street cross section and he detailed the cost comparison of maintaining versus cold mill paving a dirt street , pointing out that the payback period is approximately 6 . 1 years. Mr. Sypher reported that not all 19 miles of the current dirt streets within the city limits will be candidates for the cold milled streets program and he discussed the pre - qualifying questions and ranking matrix for the program. He stated that a survey of planned utilities will be done the year the paving is to be installed and he reported that 51 percent of the frontage property owners must be in favor of the paving for it to remain on the program schedule. He announced that the program aims to complete one mile of cold mill paving per year and he presented the 5 - year preliminary plan of the program . Mr . Sypher pointed out that the 20 year projected completion timeline is dependent on several factors and he emphasized that this timeline requires that all future subdivisions within the City ' s planning and platting jurisdiction be required to comply with the paving requirements outlined in Section 6 . 4.7 of the Unified Development Code . Concluding the presentation , Mr . Sypher praised City Engineer Nica Westerling and Streets Superintendent Chad Fuller for their efforts in creating this program . In response to Councilor Sharer ' s questions , Mr . Sypher reported that the life of a cold milled street is approximately 10 years and requires the same ongoing maintenance as all other paved streets and he confirmed that cold mill paving is, in essence , repurposing materials from torn up streets . Responding to the Mayor ' s inquiries , Mr. Sypher explained that the millings can be stored for a very long time but that they compact and become harder to work with over time and he stated that it would be best to consider utilizing a contractor for paving the road around Lake Farmington due to staff limitations . Noting that the matrix will be helpful when speaking with constituents , Mayor Duckett thanked Mr. Sypher for presenting this program to the Council and he pointed out that the condition of the dirt roads within the city limits have dramatically improved with the addition of the street roller. FIRST AMENDMENT/AGREEMENT FOR OPERATION AND MAINTENANCE OF THE WATER AND WASTEWATER PLANTS , COLLECTION AND DISTRIBUTION SYSTEMS AND MAINTENANCE OF SELECTED STORM WATER AND IRRIGATION SYSTEM COMPONENTS - 8.0 -  Referring to a handout that was distributed to the Council , Public Works Director David Sypher reviewed the scope changes to the agreement for operation and maintenance of the water and wastewater systems with Operations Management International , Inc. ( "OMI") and explained that some components will move to a core fee and others will move to an additional service authorization which will enhance the overall scope of the agreement while providing greater efficiency . He reported that the most substantial change to the agreement is the addition of the unidirectional flushing program and he presented a section of relatively new ductal iron pipe that has nontoxic "scum" buildup , noting that the maximum scour velocity of unidirectional flushing will remove this buildup which can extend the life of the pipes by up to 25 years . Mr. Sypher explained that the net cost for the proposed amendments is $135 , 416.40 and he announced that the Public Utility Commission unanimously recommended approval at their March 14 , 2018 meeting . Following brief discussion , a motion was made by Councilor Rodgers , seconde d by Councilor Sharer to approve the first amendment to the agreement between the City and Operations Management International , Inc . for operation and maintenance of the City ' s water and wastewater plants , collection and distribution systems and maintenance of selected storm water and irrigation system components , and upon voice vote the motion carried unanimously . COMMERCIAL VENDING ON CITY - OWNED PROPERTY SUPPORTING THE OUTDOOR RECREATIONAL INDUSTRY Utilizing a PowerPoint presentation, Parks , Re creation and Cultural Affairs Director Cory Styron briefly rev iew ed the historical background of mobile vending on City - owned property and he provided a list of the vendors and their respective locations from 2016 and 2017. He reported that so far in 2018 staff has updated and reviewed the request for proposal ("RFP") for commercial vending and hosted the Outdoor Recreation Industry Initiative ("ORII") Base Camp workshop in conjunction with the Farmington Convention and Visitors Bureau ("CVB") , San Juan College Center for Small Business Development , the Metropolitan Redevelopment Agency and the Bureau of Land Management ("BLM" ) . He stated that staff is working with the BLM to provide an additional community workshop focusing on doing business with the BLM and announced that staff plans to continue providing annual ORII workshops to help support the outdoor recreational industry in Farmington . Concluding the presentation , Mr. Styron reported that Paddle & Shiver Shack will be providing watercraft rental at Lake Farmington , Animas Outdoors will be providing tube and bicycle rentals at Animas Park and DNV Hotdogs and Shelly ' s will be providing food at Berg Park in 2018 , noting that staff expects increased interest from potential vendors as the temperatures rise . In response to Councilor Rodgers' inquiry, Mr . Styron reported that staff tries to keep track of local vendors and continues to look for commercial vending opportunities . PROPOSED FEES FOR THE BEACH AT LAKE FARMINGTON , OUTDOOR PATIO AT THE AQUATIC CENTER AND FOOTGOLF AT CIVITAN GOLF COURSE Utilizing a PowerPoint presentation , Parks , Recreation and Cultural Affairs Director Cory Styron reported that staff is proposing a small - and a large - party rental fee for The Beach at Lake Farmington for private parties and he stated that the proposed fee for a small party is $200.00 for two hours for 1 - 100 participants, lifeguards and entry pass for up to 15 vehicles ($5 . 00 for each additional vehicle) and $300.00 for a large , two - hour party for 101-200 participants , lifeguards and entry pass for up to 25 vehicles ($5 . 00 for each additional vehicle ) . Mr . Styron explained that the fees recover the cost of the lifeguards and some of the lake access fees and pointed out that market comparison for pricing is limited because The Beach is very unique . Regarding the outdoor patio at the Aquatic Center , Mr . Styron provided the market comparison for pricing and reported that staff is proposing a $100 rental fee for 1 - 20 attendees for a minimum of two hours during public swim times and a $150 rental fee for 21-40 attendees for a minimum of two hours during public swim times . He stated that the patio is an underserved space that provides separation from other users in the facility along with direct access to the pool . Concluding his presentation , Mr . Styron stated that staff is proposing a $5 . 00 fee for FootGolf at Civitan Golf Course and he explained that this new program is priced to be a family activity. Additionally , he stated that this course is alongside the golf course and he noted that there is minimal impact to the golfers. - 8.1 - - - - - - - - - - - - - - -- -- -- -- - - - ------ In response to inquiries from the Mayor and Councilor Rodgers , Mr . Styron stated that catering would be allowed at the private parties at The Beach and he explained that alcohol is usually the trigger that necessitates security , noting that alcohol is prohibited and that staff will investigate the need for security at this type of special event . Noting that it is a great asset to the community, Councilor Sharer announced that he often takes his daughter to play FootGolf at Civitan Golf Course and he confirmed that it does not interfere with the golfers playing the course . There being no further discussion , a motion was made by Councilor Rodgers , seconded by Councilor Sharer to approve the proposed new fees for The Beach at Lake Farmington, the outdoor patio at the Aquatic Center and FootGolf at Civitan Golf Course , as presented , and upon voice vote the motion carried unanimously . BID/CONTROL BUILDING FOR TWIN PEAKS SUBSTATION Chief Procurement Officer Kristi Benson reported that bids for purchase of a control building for Twin Peaks Substation (Electric) opened on February 13 , 2018 with seven bidders participating . She recommended that the bid be awarded to McKinley Sales Company on its low bid meeting specifications after application of five percent in-state preference of $340 , 900 . In response to Councilor Sharer ' s inquiry , Ms . Benson explained that negotiations are not allowed as part of the bid process and that the bid is awarded to the lowest bidder meeting specifications . Thereupon, a motion was made by Councilor Rodgers , seconded by Councilor Sharer to award the bid for purchase of a control building for Twin Peaks Substation to McKinley Sales Company as the lowest responsible bidder, and upon voice vote the motion carried unanimously. At the Mayor ' s request , it was the consensus of the Council to direct staff to make a presentation regarding the procurement process at a future City Council meeting. BID/TERMINAL LINE RELAY PANELS Chief Procurement Officer Kristi Benson reported that bids for purchase of terminal line relay panels (Electric) opened on March 6 , 2018 with three bidders participating. She recommended that the bid be awarded to McKinley Sales (Keystone) on its low bid meeting specifications after application of five percent in - state preference of $197 , 364 . Thereupon, a motion was made by Councilor Sharer , seconded by Councilor Rodgers to award the bid for purchase of terminal line relay panels to McKinley Sales (Keystone) as the lowest responsible bidder , and upon voice vote the motion carried unanimously. PROPOSED ORDINANCE AMENDING SECTION 26 - 2 - 40 OF THE CITY CODE DEALING WITH PENALTIES FOR VIOLATIONS OF WATER USE RESTRICTIONS City Attorney Jennifer Breakell requested permission to publish notice of intent to consider adoption of a proposed ordinance amending Section 26 - 2 -4 0 of the City Code dealing with penalties for violations of water use restrictions , noting that in - depth information on this item was presented to the Council at the February 20 , 2018 Work Session. Thereupon a motion was made by Councilor Rodgers , seconded by Councilor Sharer to direct the City Attorney to publish notice of intent to consider adoption of a proposed ordinance in accordance with State Statutes . The roll was called with the following result : Those voting aye: Linda G. Rodgers Sean E. Sharer Jeanine Bingham-Kelly Janis Jakino Those voting nay : None -8.2- - - - - - - - - - - - -- -- - -- ----------- The presiding officer thereupon declared that four Councilors having voted in favor thereof, said motion carried. COUNCIL BUSINESS Update of Farmington , New Mexico ' s Wikipedia Website Page Mayor Duckett requested that staff update the Wikipedia website page for Farmington, New Mexico , noting that it appears to have been last updated in 2006 . CLOSED MEETING A motion was made by Councilor Rodgers, seconded by Councilor Sharer to close the meeting to discuss request for proposals for a mock audit pursuant to Section 10 - 15-1H(6) NMSA 1978. The roll was called with the following result: Those voting aye: Linda G. Rodgers Sean E. Sharer Jeanine Bingham-Kelly Janis Jakino Those voting nay: None The presiding officer thereupon declared that four Councilors having voted in favor thereof , the said motion carried. The Mayor convened the closed meeting at 9 : 56 a.m . with all members of the Council being present. Following the closed meeting , during which meeting the matter discussed was limited only to that specified in the motion for closure, a motion was made by Councilor Rodgers , seconded by Councilor Sharer to open the meeting for further business , and upon voice vote the motion carried unanimously . The open meeting was reconvened by the Mayor at 9:59 a . m. with all members of the Council being present. REQUEST FOR PROPOSALS/MOCK AUDIT Contracts Administrator Rosalyn Potter announced that proposals for a mock audit (Electric) opened on February 13 , 2018 with 12 offerors participating and stated that presentations with the top two evaluated firms were held on March 12 , 2018. She recommended that the contract be awarded to Proven Compliance Solutions (PCS) as the top evaluated firm. Thereupon, a motion was made by Councilor Sharer , seconded by Councilor Rodgers to award the proposal for a mock audit to Proven Compliance Solutions (PCS) , as recommended by the Contracts Administrator, and upon voice vote the motion carried unanimously . There being no further business to come before the Council , a motion was made by Councilor Rodgers , seconded by Councilor Sharer to adjourn the meeting at 10:00 a.m., and upon voice vote the motion carried unanimously. APPROVED this lQth day of April , 2018. Nate Duckett , Mayor SEAL ATTEST: Dianne Smylie , City Clerk -8.3-