[Editor's Note: This is the second portion of the Grant County Commission work session on Tuesday, Jan. 9, 2018. One more will follow.]
By Mary Alice Murphy
Santa Clara Mayor Richard Bauch made a plea to Grant County commissioners at the Tuesday, Jan. 9, 2018 work session asking the county to partner with the village to secure ownership of Fort Bayard.
"We believe that Fort Bayard is a great resource for all of Grant County," Bauch said. "We had a Senate bill last year, but we ran out of time on it. In committee, the members said the village may not be large enough to manage it by themselves. We ask the county to partner with us in a 50-50 ownership of Fort Bayard."
He said he had discussed the option with Santa Fe, and it was suggested the village needed a JPA (joint powers agreement) with a large investor or the county, because they are concerned about the size of the village and having enough resources.
"It could be an MOU (memorandum of understanding) or a JPA," Bauch said. "The document I'm asking you to consider could be an MOU until we get ownership and then it would be a JPA."
He suggested Fort Bayard could be managed with a managing board with a couple of commissioners and a couple of village trustees to oversee the operation Fort Bayard. "The maintenance is up to the village. The county would be more in-kind stuff like using equipment."
Commissioner Gabriel Ramos thanked Bauch for all the work he has done. "You did a great job last year with the Americorps members boarding up the buildings Also I want to thank the people who put together the museum. The museum is pretty awesome."
"We have put $474,000 this year in grants, donations and in-kind services into Fort Bayard," Bauch said. "We realize it's a significant project, but we feel it's an resource for all of Grant County, for tourism and other economic development. Once we have ownership, we will have access to a lot more resources to make it a reality."
Ramos suggested including all the municipalities, the university, as well as the county to combine all the resources to fix Fort Bayard. "I hope we can include everyone."
Commissioner Harry Browne said he realized the document Bauch brought to the commissioners is a preliminary draft.
"We wanted to get the concept out there," Bauch said. "It is subject to county changes. Sen. Morales submitted SB 71 again, I think is the number, but it's a short session. We are hoping to be successful."
Browne said he would focus on big concepts. He asked if the main purpose of the document is to transfer ownership to the county and the village. "We would need an agreement ready to receive the property."
Bauch said he believes the property would not transfer until July 1, which would allow the many details to be ironed out, such as water rights.
Browne said owning the property should be added to the purposes of the document. He also asked what would happen if the project fails.
Bauch said the village is looking for transfer of the property. "If the project fails within 10 years, it would revert to the state. Anything we do in the meantime would revert to the state. The village and the county would get equipment and such back, and then the rest to the state."
"We are emphasizing this agreement at this point is the whole business plan, hinges on and is supported by having a large tenant to take over some of the buildings," Bauch said. "The Gila National Forest is interested in leasing. Their bidding process begins a year from now for a 20-year lease. If we don't get ownership, we lose the opportunity to bid."
Browne pointed out that a JPA creates a new organization, whereas an MOU doesn't.
Bauch explained that General Services Department Cabinet Secretary Ed Burckle had at first thought a JPA was necessary, but now says an MOU or a JPA would be sufficient.
County Attorney Abigail Robinson said she thinks the state would give direction on what is required for the transfer.
"I see a JPA as a separate board to own the facility," Browne said. "The board would supervise an executive director. If you establish the village as the executive director, my concern is that the board has the authority to fire the executive director. In what sense does the village report to the county? And what happens with dissatisfaction on the part of the county?"
Bauch said the intent is for the day in and day out operations to fall on the village. The county can give direction. "The board would make the decisions. With employees, we would have responsibility for ours and the county for theirs."
"What recourse does the board have if the village/executive director doesn't do what the board wants?" Browne asked. "Hopefully everything would work fine. Could you see a situation where it would be better to have independent management?"
Bauch said the intent was to keep expenses, such as a site manager, to an absolute minimum. "Should the board dissolve, everything goes back to the state. That is leverage for the county, if things aren't working out with the village to just walk away from the agreement."
"Assuming we all want this to work, it prevents things from happening that are really egregious, but it makes it difficult to enforce a small decision," Browne said.
Bauch said he was thinking that an initial $50,000 each from the village and the county they could keep it going. He said General Services came up with a cost of $50,000 for electricity because that's what they are spending.
Browne inserted: "Do you see $50,000 of work out there?"
Bauch replied that he personally does not, but "we know they are budgeted for maintenance, partially for one person out there, maintaining pumps and doing a bit of repair work. After we have ownership, we would have a better idea of the costs. We're looking at a basic amount to keep it from deteriorating further."
Browne said it looks like the initial money would go to the village "or in my preference into a special fund.
Bauch said the village would be the fiscal agent and would build a separate account for Fort Bayard.
"My concern that it is a fairly large project for a small village, so my thought was that the county should be the fiscal agent, because we deal with a lot more money," Browne said.
"We are willing to discuss those details," Bauch said.
Browne said: "It would address the concern that it's too large a project for a small village. We'll all work out a budget. If the county doesn't approve the budget, the village could still approve it. I prefer we partner in the approving."
Commissioner Alicia Edwards said she thought it was a legislative action that cannot be done in the interim, and would put it back a year. Bauch said he believed that was correct.
"To transfer the whole property would be by the Legislature, assuming it is worth more than $100,000," Bauch said. "Pieces can be done administratively. For instance, the museum."
Edwards said she is assuming it cannot be done this session. "If it took longer, is it feasible that the state could do pieces over the year in order to deal with the timing issue of the Forest Service bid?"
"I don't think we would get enough over a year," Bauch said. "It doesn't seem feasible."
Edwards asked why is it different now from a previous conversation to include Western and the municipalities.
"The intent of the MOU was to show Santa Fe of the entire county's interest in Fort Bayard," Bauch said. "This one is intended to transfer ownership to the village and the county."
"If we had the MOU, which shows support of all entities for this project, why not have the same people participate in a JPA?" Edwards asked.
Bauch said he sees it as a 10- to 15-year project, with all revenues going back into Fort Bayard to make it attractive enough to be a tourist draw. "Several other communities expressed support of the project, but have no interest in ownership. They don't want to put money in. Personally, if we have four, five or six equal owners, it feels like it would be more difficult to manage. I think it's easier with two partners."
"I understand that logic," Edwards said. "I'm very much in favor of the idea, and agree it will benefit the whole county. My next question concerns the whole plan, which hinges on a large tenant. There is no guarantee it will be the Forest Service. Have you identified any other potential large tenants?"
Bauch said one lease with the Gila National Forest would be enough to sustain the property. He said Americorps and YCC might be interested in a presence and have to go into smaller leases. "We identified three or four other large groups that could do it together. With a lease of $150,000 a year, we could maintain the property. If more than that, additional money could go back into improving the property."
Edwards said it is her understanding the state will not give up the water rights.
"Part of the legislation that we can lease water from the state," Bauch said. "The state is amenable to a lease for 35 to 45 acre-feet of water for fire protection and to provide water to the buildings. The village has also run an additional sizeable water line to New Mexico 152 that we could tap into."
Edwards asked if the transfer and the water lease would happen at the same time. "We need a 99-year lease on the water."
Bauch replied that both are part of the legislation.
"If the transfer happens, and the state balks on leasing the water, are we obligated by that legislation?" Edwards asked.
Bauch said he didn't think so. "A JPA could be dissolved at any time by both parties."
"The biggest risk to the county is to put effort and in-kind into it," Bauch said, "and if it should fail, the county is out what it invested. But it's not going to fail. The advantage of a partnership is that the county can go for grants that the village cannot apply for and the village can apply for funding that the county cannot apply for. We could use each other's funds as matching money. The risk to the county could be minimal. The intent is for more in-kind services from the county."
Edwards asked what the date would be for the Forest Service, were it to get the bid, to start paying.
"I'm not sure, but at this point, it could be four years out from an award," Bauch said. "We have about a year to get the process ready for us to bid. After the contract is awarded they have six to eight months to prepare and move in. I think when they move in they start paying."
Bauch said the village expects to continue to maintain it for at least three years as is. "The cost of $150,000 is for when it was in full operation. We are estimating $25,000 to $50,000 annually right now."
Edwards noted that estimates rarely go down.
Commissioner Billy Billings said he supports the plan, but the county needs to minimize risk. "We have to watch what we're obligated for."
Bauch said he did not know of any grants for maintenance. "The state is not maintaining any of the buildings. The village is mowing and filling potholes. Electricity costs would be minimal. The state will keep a couple of buildings and pay for them. I don't see it as a major investment at this point. The national cemetery is stand-alone. We can find out what the electricity cost is now, which last years was a couple of hundred a month. The most usage is for the state warehouses. The state uses the old laundry for a new shop. The building would transfer to us, so we would have a lease with the state for use of the building. The state would continue to pay the utilities."
Edwards asked if Bauch had an estimate to bring buildings up to the standards required by the Forest Service, should they be the large tenant.
Bauch said it was expected to cost about $3 million, the entity financing it, with the lease being collateral for a loan to take six to eight months to bring it up to standards. "It's part of the business plan."
Edwards said she assumed it would take longer than six to eight months.
Commission Chairman Brett Kasten asked if the state were considering "giving the whole property to us or keeping some for the state."
Bauch said of the 468 acres, "we were going to request only about 320, the remaining about 150 acres would stay with the state, including the well tanks, which would remain with the state. The national cemetery is stand alone and the state will keep the acreage on the west side because the Department of Health has the intent to build a warehouse or evacuation facility west of the cemetery."
Kasten asked what historical regulations would "we be shackled with?"
"We have trained with the State Historic Preservation Office," Bauch said. "We can do anything inside the buildings. The exteriors have to remain as they are. We would need to look at archaeological issues. As far as the structures, as long as we go back to the stucco, we're fine."
Kasten said, in the JPA, he was struggling with was when "we get down the road, if the village is unable to take care of its fiscal responsibility and the county had to take it over."
"I don’t have an answer," Bauch said. "The county could leave the project."
Kasten said the last appraisal he saw for the property was a negative $3 million and the demolition cost a couple of million, so it's up to a negative $5 million. " I don't know why we can't do it administratively."
Bauch said the village looked at appraising the property, but the lowest estimate for an appraisal was $30,000. "We got a professional opinion that essentially the property has no value at all. The land has significant value, but it would cost $12 million to $15 million to demolish the buildings, and we estimated in business plan that it would cost $18 million to $20 million to build brand new. They outweigh one another."
Ramos asked how current the village's audits are and a copy of the village's budget.
"All our audits are up to date, with no findings," Bauch said. "I can give you our budget."
Browne asked about insurance.
Robinson said it can be worked out in a JPA. "It may be possible to have the insurance individually for the organization. It would need to be worked out."
"At what point do we need to enter into an MOU or JPA?" Billings asked.
Robinson said, if the legislation passed, it could be contingent on the formation of an entity.
Bauch said he had looked into the insurance issue. "If the village annexed Fort Bayard, the increase would not be dramatic. As specific buildings are leased, the lessee would take over the insurance. It would cost us a bit more if we utilized the theater as a community center because of liability."
"I appreciate your consideration," Bauch said. "We feel an agreement between the two entities would be workable. We could consider an advisory committee with the other communities and the university, advising the management board."
The next article will complete the work session agenda.