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COMMISSION STUDIES ECONOMIC STATE

 

November 16, 2018

Germaine Chappelle Speaks to Commission.

Commission Studies

Economic State

by David Edward Albright, TALON

At the San Juan County Commission meeting, moved to Thursday, November 8, due to the Election, two lengthy presentations regarding the economy were heard. The first was a remote video from Santa Fe by Juan Torres, Finance Department Director of New Mexico Economic Development, joined by Economist Ryan Eustice with the same agency. The other presentation, 'Potential Energy Transition Act Legislation', by Germaine Chappelle, with Chappelle Law Firm, discussed a study of the transition to renewable energy and the impact of the impending San Juan Generating Station closure.

County Clerk Tanya Shelby gave election turnout results and thanked her "phenomenal staff" and other departments who helped with the election. Mike Stark, Chief Operating Officer, presented county employee, Douglas Begay, with a 'Significant Achievement Award' for his "quick thinking and quick action" in putting out a fire on a county water truck on August 22, 2018.

Opening the Economic Development report, Torres stated that New Mexico has 249 'qualified census tracts', meaning they're "qualified under the new market tax credit program", with required characteristics, such as a low to medium income ratio and high unemployment and blight/brown yield issues. A Federal bill passed in December 2017 allowed governors to designate 25% of these as 'opportunity zones'. Their job was to work with county managers and economic development organizations and tribal entities to determine which ones would be selected. Sixty-three were designated in New Mexico, including five in San Juan County.

Eustice said the bill, only six pages long, was "one of the most drastic changes to the economic development world that we've seen in recent years". The bill was intentionally written "broadly" to allow capital to flow into these zones, "almost unregulated for as much growth as possible". Included are tax provisions and benefits that allow individuals to invest capital gains into a fund---then into an opportunity---providing a shelter for those funds for ten years. Torres said, "Research has shown there is anywhere from $3-7 trillion dollars in unrealized capital gains that are sitting on the sidelines...because of their tax burden." The idea behind the law is to give investors an incentive to invest. Newly-release rules will help to clarify investment eligibility for certain zones. The so-called "sin businesses"---casinos, liquor stores and massage parlors---will not count as an 'opportunity zone'.

Their approach in working with communities is to "educate, advise and connect... utilizing a story map for each zone", Torres said. He advised communities and local government to look at the infrastructure (roads/utilities) that would make designated zones more attractive and viable for investment. Visit their website: https://gonm.biz.

'Transferring Sobering Center Property and Improvements Back to City of Farmington' was presented by Stark. It was approved. He also detailed, 'Supporting the Updating of the Blanco Mesaverde Pool Rule'; approved without discussion.

Chappelle's presentation shared results of a study regarding the energy transition with respect to renewables and the planned closure of the San Juan Generating Station (SJGS). San Juan County, City of Farmington, Four Corners Economic Development, San Juan College and the Central Consolidated School District (CCSD), Kirtland and Emergency Management met to study PNM's Integrated Resource Plan. She said, "we've been trying to gather the information we need to understand what's at stake, and whether or not we have options with respect to closure...what the impacts really are going to be...and as we all might imagine---those impacts are severe." She declared they have "developed a strategy to put ourselves in the best position to either stop closure, which is unlikely, or at least give us a glide path so we can...pivot and diversify the economy".

"Five years ago PNM indicated that if we as a community helped them shut down two units at SJGS and get approval to install pollution-control equipment, they would keep that open until about 2032", Chappelle said. A year later they said, "nope---we're going to shut down in 2022". She said, "As a result of their efforts, SJGS is one of the most technologically, operationally-sound---it also meets all national pollution-control standards." Considering closure impacts, both San Juan Community College and CCSD issued educational bonds valued at over $40 million, based on the assumption of plant operation to 2032. Revenue losses in the Kirtland area and to the college will be significant and the State of New Mexico will lose over $50 million per year. CCSD has already seen a decrease in employees and has lost about 300 students. "PNM has conceded", she said that "closure will actually increase electricity rates and a loss of over 1500 jobs". "Obviously property taxes will increase", she stated. "What's the reason for the shutdown so soon...it benefits shareholders at the expense of rate-payers and our schools." Her report concluded with a discussion of the mandate that renewable energy be 20% of the energy production pie; also, the economic quandary of meeting base and peak electricity load demands during the transition---as California is experiencing. A California study showed an increase in electricity costs of between 60 and 80%, causing what's been termed 'energy poverty'. "We need to find ways to give us more time to diversify the economy," she said of their goal.

Commissioner Jim Crowley explained details of the 'Potential Energy Transition Act Legislation', including funding options and its components which allow increased transition time. Mike Stark read that same 'Resolution 18-19-27, which was approved. Doug Echols presented 'Renewal of Intergovernmental Agreement for Ambulance Services', which will now include Kirtland. It was approved, as was a three-month lease agreement with PESCO. Stark introduced Devin Neely, new Public Relations Manager for the County. Emergency Manager, Mike Mestas, gave an update on the Animas River spill, from a BP well (into ditches) south of La Posta Road.

During 'Public Input' Victor Snover spoke as both a private citizen and Mayor of Aztec. "We have hundreds of wells inside the city limits," he said, expressing his concern with additional drilling, more issuing of permits and increased water consumption. There will be a special commission meeting on November 13 to discuss a personnel issue and no regular meeting on November 20.

 

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