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Council approves seeking loan for landfill construction

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City Solid Waste Department employees help Richard Sanchez, left, unload his trailer during one of the city's bulk trash collection days in February. Two of the 30-yard green collection bins were taken to the city's landfill. On Thursday, the City Council discussed taking out a loan to build a new landfill cell and plans to ensure it doesn't fill faster than expected. (Juno Ogle File Photo)

Copyright © 2021 Roswell Daily Record

Making sure the city’s planned new landfill cell doesn’t fill up quicker than anticipated and whether or not to borrow the money to build it took up much of the Roswell City Council’s meeting Thursday night.

The council took almost an hour of a four-hour meeting to discuss and vote on three items related to the construction of a new landfill cell, passing each by a vote of 8-1. Councilor Juan Oropesa was the no vote on each measure. Councilor Jeanine Best was absent from the meeting.

Although each item was separate, the council discussed them at one time.

The first item, Resolution 21-16, authorizes the city to submit an application for $4.5 million in financial assistance to the New Mexico Finance Authority for the construction of the cell and the purchase of a new compactor for the landfill.

The landfill construction is estimated at $3.3 million. The compactor, already in use, was $1.2 million. The council previously approved using funds from the Solid Waste Department for the purchase but had to reimburse the fund with a loan.

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The second item sets a public hearing and vote on a proposed ordinance authorizing a loan agreement with the finance authority for the project.

The third item approved a professional services agreement for $162,316 for bidding and construction management of the cell with Albuquerque engineering firm Souder, Miller and Associates.

The city is seeking to expedite the construction of a new cell, designated as 5A, before the current cell fills up. A topographical survey by the engineering firm in early February estimated Cell 4 was filling faster than anticipated and would reach capacity in July.

Abraham Chaparro, solid waste and facilities director, said a 2017 hailstorm increased the amount of waste brought into the landfill through the following year as residents replaced damaged roofs. A school demolition also increased tonnage.

Councilor Jacob Roebuck asked city staff how the city did not realize before now those increases would shorten the lifespan of Cell 4.

“It’s a little embarrassing for leadership in the city, it’s embarrassing for this council, it’s embarrassing for Joe (Neeb, city manager) and his staff that somehow we missed this very critical thing,” Roebuck said.

Roebuck said he believed the staff had put together a good plan to have Cell 5A operating before the current cell fills up, but if one thing went wrong and the project was delayed, it could mean the city would have to incur great expense to ship its waste to another city.

Neeb said the landfill has been a discussion point since he started as city manager four years ago.

“There’s been a lot of differing extenuating circumstances,” he said, noting a change in leadership at the landfill. The pandemic also slowed some of the city’s processes, he said.

“I wish I could point the finger at one thing and say, ‘This is what it was.’ I think there was a lot of different factors that came into all this,” Neeb said.

“All I can say now is that we’re at this point now, we know exactly what’s going on and we know how to get ahead of it,” he said.

Chaparro, in his presentation, spoke of some of the methods the Solid Waste Department is using to accomplish that.

The landfill now uses a large canvass to cover the open cell most days, rather than covering it with a 6-inch layer of dirt every day, he said. The new compactor compresses trash at a greater rate than the previous one. Yearly topographic surveys will monitor the space being used.

“We’re going to be watching it very closely, how it grows, what’s the life, what can we do better so we won’t have to come across a situation like this again,” he said.

Oropesa expressed concerns about taking on new debt to pay for the cell’s construction.

“The concern I have is going too quickly to borrow money,” he said. “Did we not talk to our legislators to see if we could get some capital outlay money?”

Neeb said the cell’s construction was on the list of projects the city selected in September for its Infrastructure Capital Improvements Plan but it was not among the city’s top five projects.

“When we put that information out, we did not know the severity of how close we were to the end of the life expectancy of unit 4,” Neeb said.

Administrative Services Director Juan Fuentes said the legislative process of capital funding would not benefit the city in this case, as getting the funds are not guaranteed and awarded funds are not available until July or August.

Oropesa asked if the Solid Waste Department had enough funds to cover the construction and compactor purchase.

Fuentes said because the city separated solid waste funds starting in fiscal year 2021, the landfill fund has not had time to build a reserve.

Previously, the funds for water, wastewater, solid waste collection and the landfill were commingled, but the city separated them so each could cover its own operational, personnel and capital project costs.

“The landfill fund itself does not have the ending cash balance for this project,” Fuentes said.

“The solid waste collection fund has some of the resources. Using all of those funds would essentially bring down to a really low level the funds for that operation and the enterprise,” he said.

Fuentes said city staff recommended obtaining a loan so the cash funds that are available could be used in emergency situations, such as buying new trucks or other equipment.

Roebuck said he agreed with the staff recommendation, but, as he did in the Finance Committee meeting, cautioned against getting a loan that lasted longer than the expected 10-year life of the landfill cell.

Current interest rates are low and a 10-year loan could have an interest rate of 1.2% to 1.3%, Erik Harrigan, managing director of RBC Capital Markets, Albuquerque, told the council in a presentation.

Financing both the compactor and the landfill over a 10-year period would result in annual debt service of $150,000 for the compactor and $400,000 for the landfill, Harrigan said.

Harrigan also presented options for financing both over a 20-year period and financing just the construction over 10 years. He said an analysis of the revenue and expenses of the landfill from 2017 to 2019 indicates the city could pay for any of the scenarios he presented.

In other business from Thursday’s meeting, the council took the following actions:

• Approved new Finance Director Janie Davis as a signer on city bank accounts by a vote of 8-1. Councilor George Peterson was the dissenting vote.

• Approved 9-0 resolutions amending the fiscal year 2021 budget, creating a water utility asset management plan and authorizing the sale of surplus property.

• Voted 9-0 to set a public hearing on a proposed ordinance that would amend city code regarding the scheduling of City Council meetings.

• Voted to approve Mayor Dennis Kintigh’s recommendations to fill vacancies for various groups. Approved 9-0 to the Chaves County JOY Center Board were Councilor Jeanine Best, Jan Melton and Dora Gonzales. Appointed 8-0 to the Extraterritorial Zoning Authority were Councilors Best and Margaret Kennard, with Kennard abstaining from the vote. The council also voted 9-0 to appoint Matthew Bristol, Larry Connolly and Mona Kirk to the ETZ Commission.

• The council voted 8-1 to approve a five-year grazing lease to Steve Oldfield for the 3,355-acre Kerr Ranch south of Roswell at $8,694 annually. Peterson voted against the agreement, saying he would like to see the city use the property for recreation or eco-tourism.

• Voted 9-0 to approve two cases from the Planning and Zoning Commission. One vacates an alley in the 700 block of South Kentucky Avenue, allowing the property owner to consolidate two lots. The second approved a 20-lot single-family residential subdivision at North Union Avenue and Country Club Road.

City/RISD reporter Juno Ogle can be reached at 575-622-7710, ext. 205, or reporter04@rdrnews.com.

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