City Council

Minutes of the Special Meeting of the Gallup City Council, City of Gallup, New Mexico, held in the Council Chambers at City Hall, 110 West Aztec Avenue, at 5:00 p.m. on Tuesday, October 13, 2015. The meeting was called to order by Mayor Jackie McKinney. Upon roll call, the following were present: Mayor: Jackie McKinney Councilors: Linda Garcia Allan Landavazo Yogash Kumar Fran Palochak Also present: Maryann Ustick, City Manager George Kozeliski, City Attorney The Mayor and Councilors conducted a Work Session concerning the following topic: 1. Electric Power Supply Options Edward Padilla, Rio Energy, LLC and Ed — Reyes, Jr., Enchantment Energy Consulting, LLC Mr. Reyes and Mr. Padilla provided a power point presentation entitled “Planning for Gallup’s Energy Future, The 10 Year Plan.” A copy of the power point presentation is attached hereto and made a part of these official Minutes. Mr. Reyes, Mr. Padilla and Richard Matzke, Electric Director, answered questions posed by the Mayor and Councilors regarding the recommendations for Gallup’s energy future. Discussion consisted of the following matters: • The carbon tax which will be imposed in a few years as a measure to reduce coal generation; • The implementation of a solar farm for Gallup since the solar investment tax credit expires next year; • The 70 acres of City owned land required to develop a 9 megawatt solar farm to produce 2.5 to 3 megawatt of power, which equates to the 10% limit allowed for City owned generation under the Power Purchase Agreement with Continental Divide Electric Cooperative; and • The timeframe for the City to issue a Request For Proposals (RFP) for the solar project and to construct the proposed solar farm to qualify for the solar investment tax credit. Mr. Kozeliski said a preliminary site has been identified for the proposed solar project north of Warehouse Lane near the area where the Allison Bridge groundbreaking ceremony was held. The site contains 89 acres of City owned land and is located near MINUTES Regular City Council Meeting — 10/13/2015 Page 2 an electric substation, which is requited for the project. Mr. Kozeliski also said the reason why the maffer has not been presented to the Mayor and Councilors until now is that the City needed to own its substations. The purchase of the substations from Public Service Company of New Mexico did not occur until June 2015. Mayor McKinney recommended proceeding with a REP for a solar project as previously discussed. Ms. Ustick said a REP may be issued administratively and a contract with the most responsive vendor will be presented to the Mayor and Councilors for their consideration at the appropriate time. Mayor McKinney also recommended having staff review all City owned land that is located near its electric substations in order to consider the best possible location for constructing the proposed solar farm. There being no further business, the Work Session adjourned until the Regular Meeting at 6:00 p.m. ac ie McKinney, Mayor ‘N Afl ST: Alfr Abeita II, City Approved 10/27/2015  Planning for Gallup’s Energy Future The 10 Year Plan October 13, 2015 CITY OF * GALLUP Contents • Current Situation • Current State of Energy Market • CPP • NM Energy Plan • Coal • Natural Gas • Renewables • Transmission • Gallup Timeline • Options • Risks • Recommendations - — CITY OF : GALLUP Current Situation • CDEC Agreement General Terms Expires 6/30/2022 Western Area Power Administration (WAPA) Allocation • Includes Integration Services • WAPA Replacement Power (WRP) • Allowance for City Owned Generation (COG) • 5% Limit (Increases to 10% on 7/1/16) • SeIf-Gen • Renewables • 3rd Party Gen - CITY OF GALLUP Current Situation • Transmission • City controls its rights to NITS and P2P • Opportunity for decreases • Manage TSGT Monthly • Tie Mendoza and Ft Wingate to PNM or Gallup System • Planning Horizon • WAPA Integrated Resource Plan every 3 years - • Solar Investment Tax Credit Exp 12/31/2016 • Contract Exp 6/30/2022 CITYOF - GALLUP Current State of the Energy Markets • EPA’s Clean Power Plan • Drives New Generation away from Coal • Emphasizes Efficient Natural Gas Generation • Promotes Renewables • Implementation begins 1/1/2022 • NM Energy Plan —All of the Above Strategy • Coal Generation will decrease • California SB136$ (2007) — • SJGS Abandonment • 4 Corners Retirement • Navajo Generating Station CITY OF GALLUP Current State of the Energy Markets • Natural Gas • Natural gas at lowest prices in 20 years • Fuel of Choice in the west • New Combined Cycle Generation efficiency • Renewables • Solar-Investment has passed Wind • Wind-Still Economical at Utility Scale • Geothermal-Geographically limited • Small Scale Hydro-Geographically & Environmentally Limited CITY OF GALLUP Gallup lime line CITY OF * GALLUP - Supply Options for Consideration • Short Term — Solar • ITC Exp 2016 • Lease/Purchase Structure $7-9 Million (3 MW) - • Takes advantage of the Allowance in Contract • Long Term — Natural Gas • Plant Participation ($1200/kw $60 MM @ 50 MW) - • Blend and Extend • w/CDEC Extend with Lower Post Exp Rate — • W/3td Party Step in with laddering Structure — • Prep for re-entering the Market via REP in 2019- 2020 timeframe - CITYOF GALLUP Transmission/Distribution Options • Transmission/Distribution • Consider Upgrades with Short Term Reliability improvement on PNM Line • Modifications/Upgrades to Bulk Transformers • Apply for a discount rate from TSGT • Longer Term Upgrades to eliminate TSGT P2P • Transmission Studies • 115kV Expansion • 115kV Realignment (Associated with TSGT P2P) ($15-20 MM) • Coordinate studies via Economic Development and Infrastructure Expansion plans CITYOF GALLUP Risks • CPP Implementation effects • NM Plan compliance unknown • TSGT Exposure expected to be high • Significant changes in Nat Gas Market • Effects Gallup Post CDEC Contract • Significant • Exposure to TSGT Transmission rate increases • General Debt Market conditions CITY OF * GALLUP Recommendations • Short Term • Issue Solar Project REP • Preliminary Identification of Transmission and Transformer Upgrade Options Request a Discount on TSGT P2P Rate • Long Term • Develop Transmission Plan • Submit Transmission Study Requests to PNM • Assess Economics of Various Upgrades • Implement High Value Upgrades CITY OF : GALLUP Minutes of the Regular Meeting of the Gallup City Council, City of Gallup, New Mexico, held in the Council Chambers at City Hall, 110 West Aztec Avenue, at 6:00 p.m. on Tuesday, October 13, 2015. The meeting was called to order by Mayor Jackie McKinney. Upon roll call, the following were present: Mayor: Jackie McKinney Councilors: Linda Garcia Allan Landavazo Yogash Kumar Fran Palochak Also present: Maryann Ustick, City Manager George Kozeliski, City Attorney Presented to the Mayor and Councilors were the Minutes of the Regular Meeting of September 22, 2015. Councilor Kumar made the motion to approve the September 22, 2015 Regular Meeting Minutes. Seconded by Councilor Garcia. Roll call: Councilors Kumar, Garcia, Landavazo, and Mayor McKinney all voted yes. Councilor Palochak abstained. Motion carried. The Mayor and Councilors presented a Proclamation declaring October 22, 2015 as Gallup Pink Day and the month of October 2015 as Breast Cancer Awareness Month. Sandra McKinney and MarIa Chavez accepted the Proclamation. Presented to the Mayor and Councilors were the following Discussion/Action Topics: 1. Professional Services Agreement with the Gallup-McKinley County Chamber of Commerce for the 2016 Gallup Visitor’s Guide Maryann — Ustick, City Manager Ms. Ustick said the proposed agreement would allow the Chamber of Commerce to oversee and manage the design, content, production, sales and distribution of the 2016 Visitor’s Guide. There is no change in the agreement from last year. The cost for the services to be provided under the agreement will be $35,104 to be subsidized by lodger’s tax funds. David Hinkle, President/CEO of the Gallup-Mckinley County Chamber of Commerce, disseminated copies of the 2015 Visitor’s Guide and provided an overview of the services to be provided under the proposed agreement. Discussion followed concerning the distribution and the availability of the Visitor’s Guide. MINUTES Regular City Council Meeting — 10/13/2015 Page 2 Following discussion, Councilor Palochak made the motion to approve the Professional Services Agreement with the Gallup-Mckinley County Chamber of Commerce for the 2016 Gallup Visitor’s Guide. Seconded by Councilor Landavazo. Roll call: Councilors Palochak, Landavazo, kumar, Garcia, and Mayor McKinney all voted yes. 2. Acceptance of Easements from Gallup Land Partners, LLC for Reach 27.6, Project #6 of the Navajo Gallup Water Supply Project (NGWSP) — George Kozeliski, City Attorney Mr. Kozeliski said Gallup Land Partners, LLC has granted three easements to the City of Gallup over its land for the eastern reach of the NGWSP. Councilor Landavazo made the motion to accept the easements from Gallup Land Partners, LLC for Reach 27.6, Project #6 of the Navajo-Gallup Water Supply Project. Seconded by Councilor kumar. Roll call: Councilors Landavazo, Kumar, Palochak, Garcia, and Mayor McKinney all voted yes. 3. Acceptance of Easements from the Gallup-McKinley County Schools for Reach 27.6, Project #6 of the Navajo Gallup Water Supply Project — George kozeliski, City Attorney Mr. Kozeliski said the Gallup-Mckinley County Schools has granted two easements to the City of Gallup over its land near Juan de Onate Elementary School and north and west of Sunshine Canyon. The easements will be used for the eastern reach of the NGWSP. Councilor Garcia made the motion to accept the easements from the Gallup-Mckinley County Schools for Reach 27.6, Project #6 of the Navajo Gallup Water Supply Project. Seconded by Councilor kumar. Roll call: Councilors Garcia, kumar, Landavazo, Palochak, and Mayor Mckinney all voted yes. 4. Approval of Easement Agreement with John F. Grenko and Acceptance of an Easement from John F. Grenko for Reach 27.6, Project #6 of the Navajo Gallup Water Supply Project George Kozeliski, City Attorney — Mr. kozeliski said Mr. Grenko’s family owns the property through the hogback cut on the north and south side of Interstate 40. The proposed easement agreement with Mr. Grenko will provide for the installation of three water taps free of charge to the Grenko family in exchange for the Grant of Easement to the City of Gallup. The easement will be used for the eastern reach of the NGWSP. MINUTES Regular City Council Meeting — 10/13/2015 Page 3 Councilor Palochak made the motion to approve the easement agreement with John F. Grenko and to accept the easement from John F. Grenko for Reach 27.6, Project #6 of the Navajo Gallup Water Supply Project. Seconded by Councilor Kumar. Roll call: Councilors Palochak, Kumar, Garcia, Landavazo, and Mayor McKinney all voted yes. 5. Resolution No. R201 5-31; Special Appropriation Project Fiscal Agent for 1 5-0520-STB Gallup Waste Water Treatment Plant Improvements $150,000 Vince Tovar, Gallup Water and Sanitation Director — Ms. Ustick presented the proposed Resolution designating the Northwest New Mexico Council of Governments as the fiscal agent for the project. Councilor Landavazo made the motion to approve Resolution No. R201 5-31. Seconded by Councilor Palochak. Roll call: Councilors Landavazo, Palochak, Garcia, Kumar, and Mayor McKinney all voted yes. 6. Gallup 1-40 Exits Landscape Master Plan — Stan Henderson, Public Works Director Mr. Henderson presented the proposed Landscape Master Plan for the four interchanges of Interstate 40 within the city. He also presented the following interchange themes and estimated construction cost for each interchange: 1) Exit 16, Route 66 Theme, $1,517,187.34; 2) Exit 20, Navajo and Zuni Crossroads Theme, $1,387,080.96; 3) Exit 22, Chaco Culture Theme, $1,457,344.69; and 4) Exit 26, Geology and Greater Landscape Theme, $3,629,633.11. Although there is no funding available at the present time, Mr. Henderson recommended approval of the proposed master plan as the basis for programming future landscaping projects with the New Mexico Department of Transportation and the Federal Highway Administration. Discussion followed concerning the funding of the interstate highway landscaping projects in Albuquerque. Will Moses of MRWM Landscape Architects, provided information on the matter. Further discussion followed concerning possible funding sources at the state and federal levels for the landscaping projects and the possibility of phasing the projects and scaling back the projects depending on available funding. Councilor Palochak made the motion to approve the Gallup 1-40 Exits Landscape Master Plan. Seconded by Councilor Garcia. Roll call: Councilors Palochak, Garcia, Kumar, Landavazo, and Mayor McKinney all voted yes. 7. 2016 Proposed Capital Outlay Legislative Priorities — Maryann Ustick, City Manager MINUTES Regular City Council Meeting — 10/13/2015 Page 4 Ms. Ustick reminded the Mayor and Councilors of the legislative capital outlay priorities they approved at the September 8, 2015 Regular Meeting. Since then, City staff and the City’s lobbyist reviewed and made changes to the City’s capital outlay recommendations for the Mayor and Councilors’ consideration. Once the Mayor and Councilors approve the final list of legislative priorities, Ms. Ustick will present them at a Joint Meeting with the Mckinley County Commission to be held on Tuesday, October 20, 2015 at 1:30 p.m. The City’s and County’s legislative delegation have been invited to the Joint Meeting. Ms. Ustick said the City’s legislators have stressed that any funds that have been allocated by the State need to be expended during the year of receiving the funds. Accordingly, staff recommended removing the new Rocky View Park and Playground Project from the list of priorities since the City will be receiving an allocation this fiscal year in the amount of $160,000 for the initial phase of the project. Additional funds may be requested next year for additional work to be done on the Rocky View Park and Playground Project. Staff also recommended removing the Old Zuni Road Bridge Reconstruction Project from the list of priorities since the design of the new Lincoln Elementary School may have an impact on the bridge project. Once the design of the school has been completed, Ms. Ustick said the Old Zuni Road Bridge Reconstruction Project will be presented to the Mayor and Councilors for legislative priority consideration. Staff recommended the carryover of the following projects for the final list of priorities: 1) New North Side Concrete Skate Board Park Project; 2) Police Department Vehicles Replacement Program; and 3) Downtown Coal Avenue Alley Reconstruction Project — Phase I (from First Street to Second Street). Staff also recommended the addition of the following projects to the final list of legislative priorities: 4) West Jefferson Avenue Reconstruction Project; 5) Indian Hills Park Lighting Improvements Project; and 6) Sky City Park Improvements Project. Discussion followed concerning estimated costs for constructing the new Rocky View Park and Playground. Following discussion, Councilor Landavazo made the motion to approve the 2016 Proposed Capital Outlay Legislative Priorities. Seconded by Councilor Palochak. Roll call: Councilors Landavazo, Palochak, Garcia, Kumar, and Mayor McKinney all voted yes. Comments by Public on Non-Agenda Items None. Comments by Mayor and City Councilors Councilor Palochak said she recently visited the Waste Water Treatment Plant and reported on the progress being made concerning the odor control issues. MINUTES Regular City Council Meeting — 10/13/2015 Page 5 Councilor Landavazo said there was a large crowd on hand during the Arts Crawl last Saturday night. He also said former Councilor Cecil Garcia is going through some serious health issues and asked everyone to keep Mr. Garcia in their thoughts and prayers. Councilor Kumar asked if City staff is following its plan regarding the eradication of mosquitos. J.M. DeYoung, Assistant to the Manager, said staff is following its mosquito eradication plan and asked to be contacted if there are specific areas of the City that need to be addressed. Councilor Garcia said she was excited about the City’s plans for constructing a solar farm. Based on a discussion he had with others earlier in the day, Mayor McKinney commended Chief Robert Cron and the police officers of the Gallup Police Department for all work they do. Mayor McKinney said the Gallup Airport Terminal will be officially dedicated to Joe Danoff on Thursday, October 15, 2015 at 10:30 a.m. Comments by City Manager Ms. Ustick said the Business Improvement District’s trash receptacle project has been delayed since the person in charge of the project has been out on a hunting trip. She thanked Vince Alonzo, Parks and Recreation Director, and his staff for providing assistance with the project. Ms. Ustick said a meeting on the final design of the proposed skateboard park will be held on Thursday, October 15, 2015 at 6:00 p.m. at the El Morro Events Center. Ms. Ustick also said the Na’Nizhoozhi Center, Inc. (NCI) has already opened the winter shelter program which will be available to those in need every evening at 6:00 p.m. There being no further business, Councilor Kumar made the motion to adjourn the meeting. Seconded by Councilor Landavazo. Roll call: Councilors Kumar, Landavazo, Palochak, Garcia, and Mayor McKinney all voted yes. Jackie McKinney, Mayor ATTEST: Aditer Approved 10/27/2015