City Council

Minutes of the Regular Meeting of the Gallup City Council, City of Gallup, New Mexico, held in the Council Chambers at Gallup City Hall, 110 West Aztec Avenue, at 6:00 p.m. on Tuesday, January 10, 2017. 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 was the Minutes of the Regular Meeting of December 13, 2016 and the Special Meeting of December 15, 2016. Councilor Palochak made the motion to approve the aforementioned Minutes. Seconded by Councilor Garcia. Roll call: Councilors Palochak, Garcia, Kumar, Landavazo and Mayor McKinney all voted yes. Presented to the Mayor and Councilors were the following Discussion/Action Topics: 1. Ordinance No. S2017-1; An Ordinance Authorizing the Issuance and Sale of City of Gallup, New Mexico, General Obligation Bonds, Series 2017, in the Principal Amount of $5,365,000 Maryann Ustick, City Manager — Ms. Ustick introduced Regina Gaysina, RBC Capital Markets, who presented an overview of the proposed Ordinance and the Bond Purchase Agreement with the New Mexico Finance Authority. Ms. Gaysina provided information regarding the City’s total debt service requirements for the outstanding Series 2011 General Obligation Bonds and the new Series 2017 General Obligation Bonds. The true interest cost to the City for the issuance and sale of the bonds is 2.89% and the closing date for the transaction will be February 17, 2017. Discussion followed concerning the City’s bonded capacity of 43.06%, the interest rate for the issuance of the bonds and the anticipated time frame for receiving the bond proceeds to move forward with constructing the roadway improvements. Councilor Landavazo made the motion to approve Ordinance No. 52017-1. Seconded by Councilor Kumar. Roll call: Councilors Landavazo, Kumar, Garcia, Palochak and Mayor McKinney all voted yes. MINUTES Regular City Council Meeting — 1/10/2017 Page 2 2. Request for a Waiver of the Red Rock Park Usage Fees for the 2016 Gallup Inter-Tribal Indian Ceremonial Dudley Byerley, Gallup Inter-Tribal — Indian Ceremonial Mr. Byerley presented the request for the City to waive the fees in the amount of $45,115 for the use Red Rock Park for last year’s Ceremonial. He provided an overview of the Ceremonial’s balance sheet as of December 31, 2016 and profit and loss statement from March through December 2016. Discussion followed concerning the Economic Impact Study for the 2016 Ceremonial which may provide a 30% discount to the fees assessed for usage of Red Rock Park. Mr. Byerley and Sara Keeler answered questions regarding the vendor participation at the exhibit hall during the 2016 Ceremonial, proposed recommendations for improving the 2017 Ceremonial, the increased number of dance groups participating at the 2016 Ceremonial and the events that are held in conjunction with the Ceremonial in the downtown area. Mr. Byerley also provided information regarding the Centennial Club which is a sponsorship program for raising funds for prize money for the exhibit hall during the Centennial Ceremonial. Following discussion, Councilor Palochak made the motion to approve the request for a waiver of the Red Rock Park usage fees for the 2016 Gallup Inter-Tribal Indian Ceremonial. Seconded by Councilor Garcia. Roll call: Councilors Palochak, Garcia, Kumar, Landavazo and Mayor McKinney all voted yes. 3. Ordinance No. S2017-2; An Ordinance Authorizing the Sale of Real Property to Butler Brothers, LLC George Kozeliski, City Attorney — Mr. Kozeliski said the Mayor and Councilors accepted the highest bid submitted for the purchase of the surplus property at 127 Dee Ann Street during the last regular meeting. The proposed Ordinance would authorize the sale of the property to Butler Brothers, LLC in the amount of $155,075. Councilor Kumar made the motion to approve Ordinance No. S2017-2. Seconded by Councilor Garcia. Roll call: Councilors Kumar, Garcia, Landavazo, Palochak and Mayor McKinney all voted yes. 4. Approval of Settlement Agreement with Pueblo of Zuni on G-22 Water Application and Approval of the Purchase of Property for the Settlement and Budget Transfer George Kozeliski, City Attorney — Mr. Kozeliski said the City has reached a settlement with the Pueblo of Zuni concerning MINUTES Regular City Council Meeting — 1/10/2017 Page 3 the City’s G-22 water rights application. All hydrologists, including the City’s hydrologist, have indicated that there will be an effect on the Rio Nutria as the City pumps the G-22 wells in Gallup. Rather than trying to monitor well levels in the future, which will be quite expensive, the parties agree to have the City purchase property in the Rio Nutria headwaters. If the City’s G-22 application is approved by the State Engineer, the City will place a conservation easement on the property and transfer the property, or a portion of it, to the State of New Mexico, preferably the New Mexico Department of Game and Fish. The property identified for the settlement is owned by R.T. Krouth Rev. Trust. The City plans to purchase 158.7 acres in the amount of $140,000 plus closing costs. If the City’s G-22 application is not approved by the State Engineer and if the City decides to sell the property, Zuni Pueblo will have the first option to purchase the property for the City’s cost in acquiring and holding the land, not to exceed $160,000. In addition, the City would transfer a one-acre well site to the Pueblo of Zuni that is immediately adjacent to Zuni Pueblo. Mr. Kozeliski recommended approval of the Settlement Agreement with the Pueblo of Zuni, approval of the purchase of the property for the settlement and a budget transfer of approximately $150,000 from the Risk Management Fund for the purchase of the property. Councilor Garcia made the motion to approve the Settlement Agreement with the Pueblo of Zuni on the City’s G-22 Water Application, the purchase of the property from R.T. Krouth Rev. Trust for the settlement and the budget transfer as presented. Seconded by Councilor Kumar. Roll call: Councilors Garcia, Kumar, Landavazo, Palochak and Mayor McKinney all voted yes. 5. Acceptance of License Agreement from Gallup Land Partners, LLC for the Placement of a Flag Pole George Kozeliski, City Attorney — Mr. Kozeliski said the Veterans Helping Veterans would like to place a flag pole on the bluff to the north of the Miyamura exit off Interstate 40. Gallup Land Partners, LLC, owners of the property, has granted a license to allow for the placement of the flag pole and to run a power line to be used for the lighting of the flag pole. Discussion followed concerning the possible placement of a solar panel to light the flag pole area and the close accessibility to an existing electrical line that could also be used for powering the lights. The size of the American flag to be flown at the proposed location was also discussed. Councilor Palochak made the motion to accept the License Agreement from Gallup Land Partners, LLC for the placement of a flag pole. Seconded by Councilor Landavazo. Roll call: Councilors Palochak, Landavazo, Kumar, Garcia and Mayor McKinney all voted yes. MINUTES Regular City Council Meeting — 1/10/2017 Page 4 6. Acceptance of an Easement tram Michael Gonzales for Utility Purposes — George Kozeliski, City Attorney Mr. Kozeliski said Allifer, LLC is the successor in interest to the property on the east side of the Yah-Ta-Hey junction north of Gallup. In 1977, the City agreed to provide water to the property; however, the present water line, which runs from the meter on the west side of the junction and under Highway 491, is in bad condition and needs to be replaced. To resolve the matter, Mr. Gonzales has granted an easement to the City to run a water line across his property from the Navajo Gallup Water Supply Pipeline, which is located east of Highway 491, to Allifer’s property. In exchange for the easement, the City will grant a water tap to Mr. Gonzales. Councilor Garcia made the motion to accept the easement from Michael Gonzales for utility purposes. Seconded by Councilor Kumar. Roll call: Councilors Garcia, Kumar, Landavazo, Palochak and Mayor McKinney all voted yes. 7. Approval of Promotion Contract with Walt Eddy for Best of the Best Rodeo —George Kozeliski, City Attorney Mr. Kozeliski presented the proposed contract with Mr. Eddy for the promotion of the 2017 Best of the Best Rodeo. The proposed contract is similar to the 2016 contract with Mr. Eddy and provides for base pay for promoting the rodeo and certain bonuses based on the increased number of entries for the rodeo. Mr. Eddy answered questions regarding the contestants and he also provided an overview of the promotions of the rodeo which appeared on RFD TV. Discussion followed concerning the promotion of the rodeo on GallupCalendar.com. Councilor Landavazo made the motion to approve the promotion contract with Walt Eddy for Best of the Best Rodeo. Seconded by Councilor Palochak. Roll call: Councilors Landavazo, Palochak, Garcia, Kumar and Mayor McKinney all voted yes. 8. Approval of Budget Adjustment to Close Out the 2016 Best of the Best Rodeo Patty Holland Chief Financial Officer — Ms. Holland presented the financial information concerning this past year’s rodeo. As a result, the rodeo account is currently underfunded by $57,135.57; therefore, she recommended approval of a budget adjustment from the Lodgers Tax Fund in the same amount to close out the year. Ms. Holland also provided a summary of the improvements made in hosting the 2016 rodeo. MINUTES Regular City Council Meeting — 1/10/2017 Page 5 Discussion followed concerning the ongoing expenses throughout the year that involve the rodeo account. Councilor Kumar asked for a comparison of the financial data for the rodeo on an annual basis. Councilor Garcia made the motion to approve the budget adjustment to close out the 2016 Best of the Best Rodeo. Seconded by Councilor Palochak. Roll call: Councilors Garcia, Palochak, Landavazo and Mayor McKinney all voted yes. Councilor Kumar abstained. Motion carried. 9. Approval of Budget Adjustment for the 2017 Best of the Best Rodeo — Tanya Martinez, Legal Assistant Ms. Martinez presented the financial information and budget recommendation for this year’s rodeo. The rodeo account is currently underfunded by $52,311.30; therefore, she recommended approval of a budget adjustment from the Lodgers Tax Fund in the same amount to fully fund the rodeo account. Councilor Palochak made the motion to approve the budget adjustment for the 2017 Best of the Best Rodeo. Seconded by Councilor Garcia. Roll call: Councilors Palochak, Garcia, Landavazo and Mayor McKinney all voted yes. Councilor Kumar abstained. Motion carried. 10. Write-off of Miscellaneous Accounts Receivable Bad Debt — Patty Holland, Chief Financial Officer Ms. Holland presented a list of accounts receivable invoices that are at least four years old or have been determined as uncollectable. She recommended approval of the write-off of bad debt. In writing off the bad debt, the City does not forgive them as it actively work accounts that can be collected if the opportunity presents itself. Mayor McKinney instructed Ms. Ustick and Ms. Holland to address the rounding issues in the system where insignificant amounts ranging from 1 cent to 6 cents per account are proposed for write-off. Ms. Holland said the mailer has been addressed and such insignificant amounts will not appear on the list of bad debts in the future. Councilor Palochak expressed concerns with the high dollar amounts that have accumulated for the disposal of waste water by septic service businesses. Mr. Kozeliski said the City allows the septic service businesses to utilize the City’s waste water facility on a continual basis since it does not want the businesses to improperly dispose of the sewage anywhere else. Mr. Kozeliski said there are trial dates scheduled for the City’s cases against the septic service businesses. Regarding the outstanding amount listed MINUTES Regular City Council Meeting — 1/10/2017 Page 6 under Owest Corporation for joint pole usage, Councilor Palochak asked Ms. Holland to verify that the amount has been paid. Following discussion, Councilor Kumar made the motion to approve the write-off of miscellaneous accounts receivable bad debt. Seconded by Councilor Landavazo. Roll call: Councilors Kumar, Landavazo, Palochak, Garcia and Mayor McKinney all voted yes. 11. Allocation of Lodgers Tax Funds to Gallup Main Street Arts and Cultural District (GMSACD) for the Purchase of Window Wraps Jennifer Lazarz, — Tourism and Marking Manager Ms. Lazarz presented the recommendation by the Lodgers Tax Committee for the proposed allocation of $5,000 in lodgers tax funding to the GMSACD for the window wraps. She provided information on the images and messages that could be displayed on the window wraps to be used on the windows of vacant buildings in the downtown area. Councilor Palochak made the motion to approve the allocation of lodgers tax funds to the Gallup Main Street Arts and Cultural District for the purchase of window wraps as requested. Seconded by Councilor Garcia. Roll call: Councilors Palochak, Garcia, Landavazo and Mayor McKinney all voted yes. Councilor Kumar abstained. Motion carried. 12. Bid Award for I.H. Ford’s Highway 66 Addition Alley Sewer Improvements — Dennis Romero, Water and Sanitation Director Mr. Romero presented an overview of the emergency project for the replacement and reroute of a portion of the waste water collection system affecting one restaurant (Taco Bell) and three homes in the area. The project consists of the installation of 260 linear feet of 8-inch sewer line, 130 linear feet of 4-inch sewer line, grease interceptor and appurtenances, two manholes, relocation of utilities in the Highway 118 right-of-way, installation of 40 linear feet of curb and gutter, installation of a wheelchair ramp on the sidewalk and sidewalk drains, and the patching of asphalt following completion of the project. Mr. Romero recommended award of the project to the sole responsive bidder, Dallago Corporation, in the amount of $124,559.38. Discussion followed regarding the sewer lines affecting the building east of Taco Bell and sewer line options that would require the City’s review and approval if the Taco Bell property is redeveloped in the future. MINUTES Regular City Council Meeting — 1/10/2017 Page 7 Councilor Kumar made the motion to approve the bid award for l.H. Ford’s Highway 66 Addition Alley Sewer Improvements as presented. Seconded by Councilor Garcia. Roll call: Councilors Kumar, Garcia, Landavazo, Palochak and Mayor McKinney all voted yes. 13. Resolution No. R2017-J; Annual Determination of Notice Under the Open Meetings Act Alfred Abeita, City Clerk — Mr. Abeita said the New Mexico Open Meetings Act requires all public bodies to determine at least on an annual basis, what constitutes reasonable notice to the public of its meetings. The proposed resolution provides recommended notice procedures for the Council to conduct its regular, special, and emergency meetings. The proposed resolution is also considered sufficient and reasonable notice of the regular meetings of the City Council to be held at 6:00 p.m. on the second and fourth Tuesdays of each month. Councilor Palochak made the motion to approve Resolution No. R201 7-1. Seconded by Councilor Kumar. Roll call: Councilors Palochak, Kumar, Garcia, Landavazo and Mayor McKinney all voted yes. 14. Approval of Grant Agreement with the New Mexico Department of Transportation for Local Traffic Enforcement Programs Chief Phillip — Hart, Gallup Police Department Chief Hart presented the proposed grant agreement with the New Mexico Department of Transportation to be used for the following traffic enforcement programs: End DWI, Buckle Up and Click It or Ticket and the Selective Traffic Enforcement Program. The total amount of the grant award is $51,918. Discussion followed concerning the use of the grant for stop sign enforcement for selected areas in the city. Councilor Garcia made the motion to approve the Grant Agreement with the New Mexico Department of Transportation for local traffic enforcement programs. Seconded by Councilor Kumar. Roll call: Councilors Garcia, Kumar, Landavazo, Palochak and Mayor McKinney all voted yes. The following Presentation and Information Item was presented to the Mayor and Councilors: MINUTES Regular City Council Meeting 1/10/2017 Page 8 1. Proposed Downtown Tax Increment Financing (TIE) District for the Newly Designated Metropolitan Redevelopment Area (MRA) Maryann Ustick, — City Manager and Charlie Deans, Community By Design Ms. Ustick said as part of the Gallup Downtown Redevelopment Plan that was adopted by the Mayor and Councilors several months ago, different funding options were identified for potential projects within the MRA. One of the funding options available is the creation of a TIE District that can be used to generate funds over a period of time. If the Mayor and Councilors provide direction for the implementation of a TIF District, staff will present a Resolution for their approval next month. Mr. Deans provided a power point presentation concerning the proposed TIE District for the Metropolitan Redevelopment Area. A copy of the power point presentation is attached hereto, marked as “Exhibit A” and made a part of these official Minutes. Mr. Deans answered questions regarding the review of the funds generated by the TIE District and set aside in the redevelopment fund and the length of time it takes to generate funds in the redevelopment fund. Ms. Ustick also explained how the Redevelopment Plan is used as a guide for projects that will make a significant impact in the downtown area. Discussion followed concerning private/public partnerships that could be created in financing significant projects, county participation in the TIE District which is allowed by state law and proposed amendments to the State Redevelopment Code to allow Gross Receipts Tax increments as an option for financing redevelopment funds. Mr. Deans said Metropolitan Redevelopment Areas will be the theme of the Main Street Winter Quarterly which will be held in Santa Fe on February 8-10, 2017. Councilor Palochak made the motion to adjourn into closed session for the purpose of discussing the possible acquisition of real property. Seconded by Councilor Landavazo. Roll call: Councilors Palochak, Landavazo, Kumar, Garcia and Mayor McKinney all voted yes. The Mayor and Councilors adjourned into closed session pursuant to §1O-15-1-H(8) NMSA 1978 Comp. (as revised). Following the closed session, Councilor Palochak made the motion to reconvene the regular meeting. Seconded by Councilor Kumar. Roll call: Councilors Palochak, Kumar, Garcia, Landavazo and Mayor McKinney all voted yes. Mr. Kozeliski certified for the record that the matters discussed during the closed session was limited to the possible acquisition of real property. Comments by Public on Non-Agenda Items None. MINUTES Regular City Council Meeting — 1/10/2017 Page 9 Comments by Mayor and City Councilors Councilor Garcia thanked Ms. Lazarz for the information she received where Gallup was featured in an article entitled “40 Beautiful American Towns You Never Heard Of’ in the Country Living Magazine. She also attended Coffee with a Cop at the Octavia Fellin Public Library and said the event was a success. Councilor Garcia thanked Mary Ellen Pellington, Library Director, for her hospitality during the event. Councilor Landavazo said he received positive feedback from the public for police officers patrolling and making a presence in the neighborhoods. He also encouraged everyone to keep building Gallup. Councilor Palochak wished everyone a happy new year. She will hold a Neighborhood Meeting on Thursday, January 12, 2017 at 6:00 p.m. at Stagecoach Elementary School. She will hold another Neighborhood Meeting on Thursday, January 19, 2017 at 6:00 p.m. at Turpen Elementary School. The freedom march honoring Dr. Martin Luther King, Jr. will be held on Monday, January 16, 2017 beginning at the Gallup Cultural Center. Mayor McKinney wished everyone a happy new year. Comments by City Manager and City Attorney Ms. Ustick said the Strategic Planning Update will be held March 29-30, 2017. Arts Crawl will also have a planning session on Saturday, January 14, 2017 at 4:30 p.m. at the El Morro Events Center. There being no further business, Councilor Palochak made the motion to adjourn the meeting. Seconded by Councilor Landavazo. Roll call: Councilors Palochak, Landavazo, Garcia, Kumar and Mayor McKinney all voted yes. Allan Landavazo, Mayor Pro Tempore Approved 1/24/2017 I I x w City of Gallup Downtown Tax Increment Financing (TIE) District Charlie Deans CommunityByDesign January 10, 2017  Metropolitan Redevelopment Area Plan Economic Development Tools • Public/Private Partnerships — doesn’t violate NM “anti-donation clause” — allows “lair value” (below appraisal) when there are tangible public benefits through Development Agreements — no prohibition on “Retail uses” as in LEDA (>10,000 pop) • Funding and financial tools — Tax Increment Financing (TIE) Districts — Property Tax deferrals or credits — Issuance of Revenue Bonds — State/Federal Brownfield funding opportunities — NMMFA Low Income Housing Tax Credits bonus points — CDBG Funding eligibility (blighted designation without meeting LMI criteria)  Tax Increment Financing Districts How TIE works... ci) D ci) > ci) Increment set aside in fund for TIE District Baseline reveue retained by city/cunty Year 0 Year 5 Year 10 Year 15  Tax Increment Financing (TIE) Districts • Only requires City Council approval (no election or petition). • Uses existing property tax for the increment not a new tax or tax - increase. Can include the County’s increment with BoCC approval. • TIE funds generated in the district are spent in the district. • TIE funds can be used for projects and operational purposes. • Shows a commitment by City to developers for private reinvestment. • Revitalization results in increased GRT and property tax revenues.  NM Communities with MRA Plans: MRA Plans approved MRA Plans approved with • Clovis TIFITIDD districts • BarelaslAbq • LasCruces(TIDD) • Farmington • Abq Downtown • Deming • Nob Hill/Abq • Truth or Consequences • Lovington • Belen • Las Vegas • Gallup • Raton • Questa • Silver City • Santa Clara • South Valley/Historic Bridge • Carrizozo • Lordsburg • Roswell • Roy • Mosquero • Grants (in process) • Tucumcari (in process) • Tularosa (in process) • Santa Rosa (funding approved) • Aztec (funding approved)  4 * --.——  Gallup Projected Tax Increment Collected Over 20 Years TOTAL TAX INCREMENT PROJECTION FOR 252 Individual Year Cumulative Years PARCELS IN DISTRICT YEAR 1 $2,199 $2,199 2 $5,435 $7,634 3 $8,813 $16,447 4 $12,348 $28,795 5 $15,150 $43,945 6 $19,760 $63,705 7 $21,870 $85,575 8 $26,600 $112,175 9 $28,290 $141,065 10 $32,400 $173,465 11 $36,500 $209,965 12 $39,200 $249,765 13 $43,500 $293,265 14 $47,600 $340,865 15 $49,500 $390,365 16 $53,100 $443,465 17 $57,200 $500,665 18 $60,000 $560,665 19 $63,500 $624,165 20 $66,800 $690,965 TOTAL $690,965  Gallup Projected Tax Increment Collected Over 20 Years $800,000 $690,965 $700,000 $62434 $600,000 $560, I’ $500461 $500,000 $400,000 . . $39y.1’ $293,211’ — $300,000 $249,yt r....’ “. ./, .. .. ;. • .... ‘,.4 ;j c $200,000 $173,fp” $100,000 7 634 $16,447 j’ $0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20  Las Vegas Projected Tax Increment Collected Over 20 Years $1,600,000 4 $1,508,216 $1,400,000 $1,366 16 7- S / $1,231 16 $1,200,000 $1,103 6 —- $982, $1,000,000 /4 I $800,000 t 3 .•, $600,000 $567,3 $48131’ $402,V $400,000 $330,,31fr” $265,0fr” $206,9fr0’” $200,000 $155,9,.—’ $112,116 $75,416 $48,201 $7,790$21,368 $0 2 3 4 5 6 7 $ 9 10 11 12 13 14 15 16 17 12 19 20  Silver City Projected Tax Increment Collected Over 20 Years $700,000 $6?6,069 $600,000 $572,069 $520,069 $500,000 $471,069 $424,569 $400,000 $380,069 $337,569 / A $300,000 $225,069 r $200,000 . L’ $193,069 , $163,069 > , . $109,569 $100,000 $85,569 65,569 48,069 32,334 9,547 ,30 $0 • 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20  TIE District next steps. • Mayor/City Manager writes letter to County Treasurer to establish baseline city property tax on District parcels as per (proposed date- usually new year or mid-year tax billing period). Copy NM Tax and Revenue Department and County Assessor on letter. • County Treasurer works with Assessor on collections and setting up special TIE fund. • City Treasurer/CEO establishes Redevelopment Eund for deposit of funds from Treasurer/Assessor. This can be monthly, bi-annually or annually. City CEO reports to Mayor and Council the fund amount. • City Council creates Redevelopment Board and decides how TIE funds are spent within the district.