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, June 11,2019. The meeting was called to order by Mayor Jackie McKinney. Upon toll call, the following were present: Mayor: Jackie Mckinney Councilors: Linda Garcia Allan Landavazo Yogash Kumar Fran Palochak Also present: Maryann Ustick, City Manager Mayor McKinney said Curtis Hayes, City Attorney, is unable to attend the meeting since he is out of town handling water rights issues for the City. Presented to the Mayor and Councilors for their approval were the Minutes of the Regular Meeting of May 28, 2019. 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. Mayor McKinney recognized the following individuals in the audience: Kent Wilson, Chairman of the Planning and Zoning Commission; Bill Lee, Chairman of the Mckinley County Board of Commissioners; Mark Maryboy, former Navajo Nation Council Delegate and Eduardo Martinez of New Mexico MainStreet. Presented to the Mayor and Councilors were the following Presentation and Information Items: 1. Presentation by Marathon Petroleum — V.J. Smith and Mark Maryboy Mr. Smith and Mr. Maryboy provided an overview of the transition of the local Giant Convenience Stores to Speedway Convenience Stores. Giant and its parent company, Western Refining/Andeavor, became a wholly owned subsidiary of Marathon Petroleum. They assured the Mayor and Councilors the change to their company is in name only and the quality of the products they sell will remain the same. Mr. Smith also provided information about his visit to White Sands Missile Range for the Bataan Memorial Death March earlier this year. He presented the memorial brochure to Mayor Mckinney containing a memorial tribute honoring 77 Gallup heroes from Bataan. MINUTES Regular City Council Meeting — 6/11/2019 Page 2 2. Gallup MainStreet Arts and Cultural District Annual Update Mark Horn, Vice — President and Kara Smith, Executive Director, Gallup MainStreet Arts and Cultural District Mr. Horn and Ms. Smith presented the annual update of the Gallup MainStreet Arts and Cultural District. The key points include the hiring of Ms. Smith as the new Executive Director for the District, maintaining the District’s designation with the State, contribution of $10,000 to the design work of the downtown alleyway project, organization of business owner workshops to participate in the design phase for the Coal Avenue Commons Project, reinvestment statistics for the District, and the partnership with the Ceremonial and Gallup Arts to support the 2019 Best in Show program. The initiatives for the upcoming year include surveying downtown business owners in an effort to better understand how the District can be a resource to the business owners, utilization of the New Mexico MainStreet technical services to help clarify the District’s mission and branding within the community and its business partners, continuation of the Downtown Gallup Ornament Campaign and submission of an application for MainStreet capital outlay funding in support of the Coal Avenue Commons Project. At the request of Mayor McKinney, Mr. Martinez provided information about the Arts and the Military Round Table to be held on behalf of the Department of Cultural Affairs. The Round Table will take place on Wednesday, June 12, 2019 at the Small Business Development Center from 8:30 a.m. to 3:00 p.m. Presented to the Mayor and Councilors for their approval were the following Discussion/Action Topics: 1. Gallup MainStreet Arts & Cultural District Memorandum of Understanding (MOU) and Professional Services Agreement Maryann Ustick, City Manager — Ms. Ustick presented the Biennial MOU Extension from July 1, 2017-June 30, 2020 between New Mexico MainStreet Program, the City of Gallup and Gallup MainStreet Arts and Cultural District, which is a requirement for Gallup to be a partner and participant in the State’s MainStreet Program. She also presented the Professional Services Agreement between Gallup MainStreet Arts and Cultural District and the City in the amount of $40,000 for Fiscal Year (FY) 2020. Discussion followed concerning the scope of work under the proposed professional services agreement for the Gallup MainStreet Arts and Cultural District to provide a unified management and coordination for the revitalization and economic development activities in the central business district of Gallup. Also discussed was the funding and the stakeholder holder meetings that were held relative to the Coal Avenue Commons MINUTES Regular City Council Meeting — 6/11/2019 Page 3 Project. Ms. Ustick said the City was informed that it received capital outlay funding from the State for the project and may be able to obtain additional capital outlay funding through New Mexico MainStreet. With a little additional funding from the City, Ms. Ustick is hopeful the project could be advertised for bid this fall. Following discussion, Councilor Landavazo made the motion to approve the Gallup MainStreet Arts & Cultural District Memorandum of Understanding and Professional Services Agreement. Seconded by Councilor Palochak. Roll call: Councilors Landavazo, Palochak, Garcia, Kumar and Mayor McKinney all voted yes. 2. Resolution No. R2019-26; Fiscal Year 2020 Final Budget Adoption — Patty Holland, Chief Financial Officer Ms. Holland presented the proposed resolution adopting the Final Budget for Fiscal Year 2020 for submission to the New Mexico Department of Finance and Administration. Tern Gray, Budget Manager, provided a power point presentation on the key revisions made to the Final Budget since the Preliminary Budget was adopted last month. A copy of the power point presentation is attached hereto, marked as Exhibit A and made a part of these official Minutes. Ms. Gray answered questions regarding the $3.2 million allocation of utility administrative fees of 8.5%. Stan Henderson, Public Works Director, answered questions regarding the West Logan Avenue Reconstruction Project, including the scope of work to be performed, the precise location of the project and the potential of replacing utility lines at the construction site, if needed. Following discussion, Councilor Kumar made the motion to approve Resolution No. R201 9-26; Fiscal Year 2020 Final Budget Adoption. Seconded by Councilor Garcia. Roll call: Councilors Kumar, Garcia, Landavazo, Palochak and Mayor McKinney all voted yes. 3. Contact Award for Economic Development Services for the City of Gallup — Frances Rodriguez, Purchasing Director Ms. Rodriguez presented the results of the proposals submitted for professional services to provide Economic Development services to the City. Two proposals were received; one from the Greater Gallup Economic Development Corporation (GGEDC) and the other from Hatchform, LLC. Based on the determination made by the evaluation team, the proposal submitted by GGEDC was ranked the highest. Ms. Rodriguez answered questions regarding the evaluation of both proposals and how the evaluation committee made their decision. Discussion followed concerning the economic development objectives that could be MINUTES Regular City Council Meeting — 6/11/2019 Page 4 expanded on by the successful vendor. The experience and the qualities of the GGEDC was also discussed. Ms. Ustick advised that there is an increase in price of $49,996 compared to the last contract due to the increased amount of services to be provided under the new contract. Economic development services are funded by the City’s Water and Electric Funds with $125,000 already budgeted for the contract in the Water Fund. A budget adjustment in the amount of $25,000 from Electric Fund reserves is needed to fully fund the contract. Mr. Wilson, who is also on the GGEDC’s Board of Directors, asked the Mayor and Councilors to award the three-year contract to the GGEDC. Councilor Kumar made the motion to approve the contract award for economic development services for the City of Gallup with a budget adjustment of $25,000 from Electric Fund reserves. Seconded by Councilor Landavazo. Roll call: Councilors Kumar, Landavazo, Palochak, Garcia and Mayor McKinney all voted yes. 4. Ordinance No. S201 9-3; Authorizing the Execution and Delivery of a Loan Agreement Between the City of Gallup and the New Mexico Finance Authority in the Amount of $2,942,500 for Street Light Improvements Eric Babcock, — Interim Electric Director Mr. Babcock provided a summary on the current costs for the repair and maintenance of existing streetlights as well as the costs and the work being done to install new street lights. Erik Harrigan, RBC Capital Markets, provided an overview of the proposed financing of the energy performance contract conducted by Engie Services for the replacement of streetlights with LED lighting. Originally, the annual projected cash flow was estimated to be about $24,000 which equated to about $225,000 in total savings over the 10-year financing period. Based on the current interest rates, the annual savings is projected to be about $34,000 per year for a total savings of about $340,000. The All-In-True Interest Costs on the proposed financing is 2.1549%, the total interest on the bonds is $337,001 and the total debt service on the par amount of $3,279,501. The proposed financing will fund: 1) the project in the amount of $2,524,221, 2) the capitalized interest next year, 3) the cost of issuance, and 4) the debt service reserve fund. The bond closing is anticipated to be on July 19, 2019 at which time funds will be available for the project. Mr. Harrigan responded to questions posed about the term of the proposed financing for the project, the total savings over the life of the financing period and the continued energy savings realized in year ten and beyond. MINUTES Regular City Council Meeting — 6/11/2019 Page 5 Mr. Babcock answered questions pertaining to the total number of street lights to be replaced and the work to be performed under the proposed project. Daniel Alsup of the Modrall Law Firm, provided a summary of the proposed ordinance which authorizes the execution and delivery of the Loan Agreement with the New Mexico Finance Authority for the project. Following discussion, Councilor Palochak made the motion to approve Ordinance No. S2019-3; Authorizing the Execution and Delivery of a Loan Agreement Between the City of Gallup and the New Mexico Finance Authority in the Amount of $2,942,500 for Street Light Improvements. Seconded by Councilor Garcia. Roll call: Councilors Palochak, Garcia, Kumar, Landavazo and Mayor McKinney all voted yes. 5. Requesting Budget Adjustment in Order to Cover the Utilities Account for Electric Eric Babcock, Interim Electric Director — Mr. Babcock presented the request for a budget adjustment in the amount of $120,000 from Fund 507 cash balance to pay for all of the Electric Department utility bills for the remainder of the fiscal year. Ms. Ustick responded to Councilor Landavazo’s question regarding the budgeting of funds for the Electric Department’s utility bills next fiscal year. Councilor Landavazo made the motion to approve the request for a budget adjustment to cover the Utilities Account for Electric. Seconded by Councilor Palochak. Roll call: Councilors Landavazo, Palochak, Garcia, Kumar and Mayor McKinney all voted yes. 6. Request for Approval to Serve Alcoholic Beverages at Fox Run Golf Course — Matthew Alcala, Director of Golf Mr. Alcala presented the request on behalf of golf tournament representatives for approval to serve alcoholic beverages at the golf course for the following tournaments: Chamber of Commerce, Big Brothers Big Sisters, Miyamura Booster Club and RMCH. If approved, the alcohol sales will be available at the beginning of the tournament to tournament participants and will cease at the conclusion of the tournament. Councilor Landavazo asked about the boundaries for the golfers’ consumption of alcohol and potentially having people driving golf carts intoxicated. Mr. Alcala said the new golf carts can be programmed to restrict where the golf carts can be driven, how fast the golf carts can be driven and the golf carts can be monitored remotely by City staff. Councilor Landavazo asked how the service of alcohol will be controlled. Mr. Alcala said the dispensing of alcohol will be done by licensed servers. MINUTES Regular City Council Meeting — 6/11/2019 Page 6 Sammy Chioda, representing the Rocket Café, Liquor and Lounge, said security is also required for venues where picnic licenses are issued. He said the reason for providing alcoholic beverages during the golf tournaments is to provide hospitality and a convenience to the golfers which will yield an increase in participation at tournaments. He also said alcoholic beverages will be dispensed in a responsible manner since their license is on the line. Mayor McKinney commented on a conversation he had with Mr. Lee a couple of days ago regarding the fact that the City could not receive any revenue from the sale of alcoholic beverages nor are the tournament sponsors able to receive any proceeds from such sales. Mr. Lee said based on his conversation with Marie Chioda from the Rocket Café, Liquor and Lounge, no one can benefit from the sale of alcohol unless they have a liquor license per State law. In further conversations with Mr. Alcala and Mrs. Chioda, Mr. Lee said golfers will not be allowed to bring their own coolers if the sale of alcoholic beverages is permitted at the golf course. Mr. Lee also spoke in favor of having a beer and wine license at the golf course to be available year round which will go a long way toward the sustainability of the golf course. Mr. Chioda said if the Mayor and Councilors are not comfortable in making a long-term decision regarding the sale of alcoholic beverages at the golf course, he recommended the sales of alcohol at the golf course on a provisional basis. Mayor McKinney said municipalities with beer, wine and food services is how they make their golf courses more sustainable. He also said golfers who bring their own coolers to the golf course creates burden on City crews having to remove additional litter from the trash cans at the tee boxes. Mayor McKinney said if the service of alcoholic beverages are permitted during tournaments at the golf course, golfers will not be permitted to bring outside alcohol to the golf course. Councilor Landavazo said if the request to serve alcoholic beverages at the golf course is approved, he recommended approving the service of alcoholic beverages for the tournaments previously stated. Councilor Palochak said she wants to see the golf course succeed and to see local golfers who have been traveling to Grants to play golf to return to Fox Run. She also wants to help non-profit organizations with their fundraising efforts and supports the service of alcoholic beverages at the golf course since alcoholic beverages are offered at other golf courses. Councilor Garcia said she supports the language in the agenda documentation allowing for the service of alcoholic beverages to participants in the tournament and for alcohol sales to cease at the conclusion of the tournament. MINUTES Regular City Council Meeting — 6/11/2019 Page 7 Councilor Kumar agreed with Councilor Garcia and based on his observations during other events, such as the Route 66 Freedom Ride and Flight, the service of alcoholic beverages is controlled. He also supports the sale of alcoholic beverages at the golf course on a regular basis because the process of dispensing alcohol is controlled. Sarah Piano commended the Mayor and Councilors for supporting the Fox Run Golf Course. She commented on the lack of support by Grants’ city government of their golf course and believes Fox Run will draw golfers from Grants and surrounding areas. She also spoke in favor of serving alcohol at Fox Run Golf Course on a permanent basis. Mayor McKinney commended the tournament organizers in the audience for their work and fundraising efforts for charitable causes. He also commented on the City’s options for providing food and beverage services at the Fox Run. Following discussion, Councilor Kumar made the motion to approve the request to serve alcoholic beverages at Fox Run Golf Course for the Big Brothers Big Sisters golf tournament, the Chamber of Commerce golf tournament, Miyamura Booster Club golf tournament and the RMCH golf tournament. Seconded by Councilor Palochak. Roll call: Councilors Kumar, Palochak, Landavazo, Garcia and Mayor McKinney all voted yes. 7. G-80 Water Rights Settlement Agreement — Dennis Romero, Director, Gallup Water and Sanitation Department Mr. Romero provided the background information pertaining to the City’s G-80 Application which was filed in 1981 and the protests filed by the Navajo Nation and the Bureau of Indian Affairs (BIA) shortly thereafter. Under the water rights negotiations for the City’s G-22 Application, the total acre-feet per year (AFY) for the G-80 Application was reduced from 5,600 AFY to 2,600 AFY. Since 1981, the City never withdrew the G-80 Application. Recently, the Navajo Nation met with City staff to inquire about the possibility of purchasing groundwater to deliver to the Chichiltah area south of Gallup. In response to this development, the City and Navajo Nation have agreed to provide groundwater from the City’s Regional System to the Navajo Nation per the agreements that are already in place. At the request of former City Attorney George Kozeliski, the Navajo Nation agreed to examine the possibility of dropping their protest to the City’s G-80 Application. Over the course of a year, the Navajo Nation finally agreed to withdraw its protest. Under the proposed G-80 Water Right Settlement Agreement, there is no fiscal impact to the City at this time as the Navajo Nation will withdraw its protest and the City will move forward with its G-80 Application. The Navajo Nation has offered to negotiate with the BIA to get the BIA to withdraw their protest to the G-80 Application. Approval of the G-80 Application by the Office of the State Engineer would remove existing administrative caps on water produced from the City’s existing water wells. MINUTES Regular City Council Meeting — 6/11/2019 Page 8 Discussion followed concerning the City’s positive outlook for the future with the Navajo Gallup Water Supply Project, G-22 and G-80 Water Rights Application and solar power generation; the Bureau of Reclamation’s funding of the project reaches to deliver water to Chichiltah and the Navajo Tribal Utility Authority’s (NTUA) support of the proposed settlement agreement. Following discussion, Councilor Landavazo made the motion to approve the G-80 Water Rights Settlement Agreement. Seconded by Councilor Palochak. Roll call: Councilors Landavazo, Palochak, Garcia, Kumar and Mayor McKinney all voted yes. 8. Acceptance of FY20 NM Tourism Department Cooperative Marketing Grant and Budget Adjustments Maryann Ustick, City Manager — Ms. Ustick said the City received the grant in the amount of $13,525, in which the City will be matching in the amount of $11,500 in accordance with the grant agreement. Of that amount $2,025 is reimbursement based and requires a budget adjustment to increase revenues and expenditures. The funds will be used to optimize the City’s search engine and to purchase ads by using New Mexico firms. Councilor Kumar made the motion to accept the FY20 New Mexico Tourism Department Cooperative Marketing Grant and a budget adjustment in the amount of $2,025. Seconded by Councilor Garcia. Roll call: Councilors Kumar, Garcia, Landavazo, Palochak and Mayor McKinney all voted yes. Comments by Public on Non-Agenda Items None. Comments by Mayor and City Councilors Councilor Garcia thanked Adrian Marrufo, Solid Waste Director, and his staff for their work on picking up trash on the north side of town. Councilor Kumar thanked City staff for their work in preparing the City’s budget for next fiscal year. He commented on the work being done by GGEDC on workforce development. He also said Jennifer Lazarz, Tourism and Marketing Manager, attended the IPW Conference and was able to get 7-8 committed bus tours to stop in Gallup. At the request of Councilor Landavazo, Mr. Romero provided an update on the project at Verdi Drive and Highway 66. Mr. Romero said the contractor, at the direction of the New Mexico Department of Transportation, installed a cathodic protection system to help prevent the rebar from rusting. Concrete was poured earlier in the day and once the concrete cures, the crews will backfill, compact and repair the roadway. Mr. Romero is MINUTES Regular City Council Meeting — 6/11/2019 Page 9 hopeful that the project will be completed by the end of the week. Councilor Landavazo shared his positive comments about the Arts Crawl event from last Saturday. He commended Rhonda Quintana for her work in coordinating the event. He encouraged everyone to keep supporting Gallup. Councilor Palochak thanked the Electric Department for their work in repairing an outage on the west side of town. She also agreed with Councilor Landavazo regarding his comments about last weekend’s Arts Crawl event. Councilor Palochak said she was in North Carolina for the last 10 days and was glad to be back home. Mayor McKinney provided an update on the Field of Dreams Memorial in honor of David “Amos” Schmaltz.” At the recommendation of Mr. Schmaltz’s family, the unveiling of the memorial will be on July 6, 2019 at 11:00 a.m. Regarding Mr. Smith’s presentation at the beginning of the meeting, Mayor McKinney said Mr. Schmaltz was the son-in-law to Carlo Menini, a survivor of the Bataan Death March. Comments by City Manager and City Attorney Ms. Ustick said the City received the bill from the County, in the amount of $419,730, for prisoner care at the Adult Detention Center. The City originally budgeted $610,251 for the prisoner care costs, which results in a savings of $190,500. There being no further business, Councilor Landavazo made the motion to adjourn the meeting. Seconded by Councilor Palochak. Roll call: Councilors Landavazo, Palochak, Garcia, Kumar and Mayor McKinney all voted yes. Jkie McKinney, Mayor\. ATTEST Approved 6/25/2019 li CITY OF GALLUP FY 2020 FINAL BUDGET PRESENTATION FOCUS: GENERAL FUND )) Balance EY 2020 General Fund Operating Budget: $29,884,322 Capital Budget: 1,601,220 Total GE Budget: $3 1,485,542 Budget for FY 2020 estimated cash reserves: $8,086,460 2 Key Revisions from Preliminary Budget General Fund: i. LocalOrdinance 1-13-1 Compensation of Municipal Judge states the annual salary Is eighty percent (80%) of the annual salary of a full-time NM State Magistrate Judge. An update received, reflects an increase of $5,306. Funded from anticipated lapse salary. 2. Capital Project added: A. West Logan reconstruction (design) 100,000 3 Key Revisions from Preliminary Budget Legislative Appropriations: fY 2020 1. Animal Control $400,000 2. Detox Building Repairs $500,000 EY2019 1. Police Vehicles $455,000 2. Playground of Dreams $75,000 r 3.1Gallup Veteran Memorial $50,000 4. Gallup Indian Hills Park $100,000 5,rPl. Station Building $6,000,000 6. Coal Ave. Commons $677,000 7. W. Aztec Ave. Storm Drainage $150,000 Total $8,407,000 4  General Fund FY 2020 Revenue Budget Interest on Investments, 100,000 0.38% Fines And Forfeits Miscellaneous 561 503 Charges for Servis, 1,601% 2.11% Licenses and Permits,.._—_-——-— 224,000, 0.84% • TotalTaxes a Licenses and Permits • Charges for Services a Fines And Forfeits • Interest on Investments a Miscellaneous Total Revenue $26,629,721 Excludes transfer $3,249,295 5  General Fund FY 2020 Expenditure Budget Executive Legislative, - 520,034,2% rJucial, 769,068, 4% / Elections, 347,318, 2% I Executive Legislative - • Judicial • Elections • Finance & Administration • Public Safety Total Expenditures $31,485,542 6 C ff iUSuO11SGn