[Editor's Note: This is the first of several articles to cover the presentations on Jan. 11, 2022 and the review of the regular meeting to take place on Jan. 13, 2022. It covers the presentation on the North Hurley sewer system.]

By Mary Alice Murphy

Grant County District 1 Commissioner and Chair Chris Ponce noted at the beginning of the meeting that the Jan. 11, 2022 work session was being recorded, but technical problems had made live-streaming unavailable.

County Manager Tim Zamora said the issues would be resolved by the regular meeting on Thursday, Jan. 13, 2022.

The first presentation discussed the North Hurley sewage system, which is owned by the county, as North Hurley is unincorporated.

Karl Pennock has done a feasibility study on the potential to eventually hand the system over to a municipality, likely Hurley, which provides water to the area, Zamora said. He noted the sewage goes to the Bayard Treatment Plant. "We want to get the county out of the sewer business. We'll use ARPA (American Rescue Plan Act) funding to update the feasibility study."

Pennock represents the Rural Community Assistance Corporation, he said. "We are a member of a rural community partnership. I've been working with Tim to tie the work with potential USDA and Health and Human Services funding. We provide services at no charge to the entity. I work with water and sewer systems. We also offer lending for interim funding of projects."

He presented an overview of the system. "The system is relatively new. It was installed in 2013 and serves 85 active accounts. There continue to be revenue challenges. Grant County is running the system at a net operating loss. We want to get all the users to pay for the system. A substantial amount of funds hasn't been collected over the years. Not having the water and the sewer under the same authority is a problem."

Pennock said the five-year median household income of the area is about $23,000, and the population has been declining. "The current monthly rate is $38.75. What [County Financial Officer] Linda Vasquez does is monitor it to use the funding to pay off a USDA loan. Every year she has to report the income statement. The county is operating the system at a loss of around $34,000 a year. The bills are bringing in about $32,500, but the system costs about $66,000 annually to run. That does not include depreciation. So, to make up the net operating loss, Grant County has provided transfers in to cover the loss. In fiscal year 2021 it cost $53,800 to cover the operating losses. We also have a past due amount of about $38,000. The county is not collecting enough. If you continue this pattern of collections, the fiscal year 2022 budget will bring in about $38,000 in collections, but operating costs are going up to $75,000, debt stands at $14,000, so that is a substantial loss of about $58,000. And that's if you look at a 2 percent increase in rates. If you continue to lose money, the loss on operations by FY 2027 will be about $200,000. The county has proposed to have Hurley manage the operations and the county would provide a subsidy to Hurley to begin the process of changing authority over to Hurley. You need to adjust rates. The subsidy to Hurley is to provide for increases in rates over time. The six-year revenue forecast will have about 83 active users with a 2 percent rate increase, but with a 100 percent collection rate rather than the 78 percent you have now. This would over time bring the system into financial balance. If Hurley had authority, it could discontinue wastewater service to those who don't pay. It would also allow the political entity to borrow and provide funding as the system ages."

He addressed affordability. "The rate increases have to be sensitive to the low-income households. There would also be a potential for Hurley to increase connections to maybe 100, with more houses, more trailers."

He noted the county would need to reach out to Hurley to engage the leadership and provide incentives to Hurley to run the system.

Ponce said he and Hurley Mayor Ed Stevens have had numerous conversations about the issue, "but sometimes I feel we are miles apart. I would love it if you, Tim, and others would meet with the mayor. I'm not sure how close we are, but I think we want to start that first step."

Zamora said he would engage with Mayor Stevens.

District 3 Commissioner Alicia Edwards said she thought Southwest New Mexico Council of Governments Priscilla Lucero should also be at the table.

District 2 Commissioner Javier "Harvey" Salas asked who provides maintenance of the system.

Facility and Grounds Maintenance Supervisor Jason Lockett said the county is responsible, but "we are in conversation with Bayard to provide the maintenance."

Salas asked what the cost of sewage in other municipalities is and who provides the rates.

Lockett said he would look into the costs.

Zamora said Hurley provides water to the area.

Salas asked about the status of the pump replacement in the lift station.

Lockett said: "The whole lift station is being upgraded, so it will be at 100 percent capacity."

Salas asked what the county's responsibility is for the system.

Zamora said the payment for maintenance goes to Bayard from the county.

Pennock said even if the collection were at 100 percent, the operations would still be at a loss. "The county would get about $36,000 instead of about $30,000. If there were more active connections, the situation would be brighter."

Zamora said if the county reduces the losses, by increasing connections, there would have to be new housing, as only a few are not connected at this time.

District 5 Commissioner Harry Browne asked how the rates compare to other communities.

Pennock said he thought the rate was substantially higher. "But to break even, a rate of $88 would be more than the residents could pay."

Browne asked how the payment to Bayard came about.

General Services Director Randy Villa said some of the $30,000 payment to Bayard includes maintenance costs.

Browne said it seemed exorbitant for taking care of wastewater.

Edwards asked about the upgrading of the lift station. "You noted that the technology had changed since 2013. Can we expect the technology to change that much over the next eight years and we'll have to do it all over again?"

Lockett said the whole project is costing $220,000. He explained that sewer systems no long need catch tanks, as the new pumps carry the waste directly to the treatment plant.

Edwards wondered if the 2013 system might have been potentially a cost saving measure so the system wasn't as up-to-date as it could have been. "I think we need to have an idea of budgeting for future updates."

Lockett said the upgrade was not only putting in new pumps, but also upgrading everything inside of the lift station with a coating to minimize corrosion. The lift station serves only North Hurley.

The next article will cover the Grant County Community Health Council presentation.