County officials concerned about state funding

Joshua Kellogg

FARMINGTON — San Juan County CEO Kim Carpenter believes the upcoming legislative session will create more concerns than any session in his career.

Carpenter, other county administrators, members of the County Commission and local lawmakers discussed some of those concerns about the upcoming session during a meeting on Dec. 14 at K.B. Dillon’s restaurant.

State Rep. Paul Bandy, R-Aztec; Sen. Steve Neville, R-Aztec; and Sen. Bill Sharer, R-Farmington; were present along with San Juan County Sheriff Ken Christesen, San Juan County Alternative Sentencing Division Administrator Jennifer Miller and Traci Neff, administrator for San Juan County Juvenile Services.

The top items on Carpenter's agenda include the possibility that the hold harmless subsidies for counties and cities could be immediately repealed instead of phased out as currently planned, and figuring out how to proceed with a $3 million grant for the construction of phase one of a Flora Vista wastewater project.

During the discussion, Neville said he believes a bill that would repeal the hold harmless subsidies — created to protect local governments from revenue losses when food and medicine were exempted from the state's gross receipts tax in 2004 — will appear during the legislative session that starts on Jan. 17.

Gov. Susana Martinez signed legislation in 2013 that is phasing out the payments over a 15-year period that started in 2015.

County Operations Officer Mike Stark said in a telephone interview Thursday the county is already anticipating a loss of $160,000 for the upcoming fiscal year due to the hold harmless phase-out. If the payments are repealed immediately, San Juan County would lose about $2.3 million in annual funding.

The loss of $2.3 million would create some instability in the county’s budget, Carpenter said in a telephone interview Thursday.

He said the possible repeal of the hold harmless payments might create the need for local governments to impose a tax on food and medicine.

But county officials have no idea what kind of revenue such a tax might generate. Carpenter said they have not been able to get any answers or information from state officials.

The County Commission is looking at shifting $3 million in grant funds to capital projects described as “shovel ready.”

During the meeting, lawmakers suggested the commissioners pursue reauthorizing a $3 million state grant that was designated for the first phase of the Flora Vista Wastewater project to other top projects to ensure the money is not returned to the state.

The $9 million project would connect Flora Vista’s wastewater system to Farmington’s. Leaky and improperly installed septic systems in the area have been identified as a possible source of human waste that has been detected in the San Juan and Animas rivers.

The project is short about $6.1 million, and low-interest loans were the funding sources the county has found to pay for the project, according to a memo to the San Juan County Commission.

The group that would own and operate the system, the Flora Vista Mutual Domestic Water Association, has turned down previous offers to fund the project with loans, according to the memo.

At the San Juan County Commission meeting on Tuesday, commissioners are scheduled to vote on reauthorizing the $3 million state grant to fund two other projects and part of a third.

It would put $2.35 million toward the Upper La Plata and North Star Regional Connection project, $500,000 towards the Blanco and Harvest Gold Water Connection project and remaining funds toward the North Star and Flora Vista Water Systems Regional Connection project.

The $2.35 million project would tie the Upper La Plata Water Users Association water system to the North Star Mutual Domestic Water Consumers Association system. Stark said it would provide service to the East Culpepper Flats subdivision, where people currently haul water to their homes.

The Harvest Gold system has been on boil-water advisory since June because of failing water treatment systems and other infrastructure problems, and is one of two systems owned by AV Water Co. The $500,000 project would build a permanent connector between the two systems.

Tuesday’s meeting is scheduled for 4 p.m. in the commission chambers in the San Juan County Administration Building at 100 S. Oliver Dr. in Aztec.

Joshua Kellogg covers education for The Daily Times. He can be reached at 505-564-4627.