City discusses electric franchise with Socorro Electric

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The Socorro City Council started the process of renewing its franchise agreement with Socorro Electric Cooperative during the council’s regular meeting Aug. 16.

The city’s attorney, Nann Winter of Stelzner, Winter, Warburton, Flores, Sanchez & Dawes in Albuquerque, explained a franchise agreement is really a rental agreement by which the local government allows a utility to occupy public rights of way, usually at a price, and there are rules.

She said franchise agreements expire, and the city’s agreement with the co-op, originally made in the 1970s, has lapsed. She said the agreement continues on a month-to-month basis, not much unlike a lease between landlord and tenant, as long as both entities continue behaving in the same manner — such as SEC continuing to pay franchise fees to the city and the city allowing SEC the use of the right of way.

Winter said the agreement with SEC was so old it probably had rules the city would like to change. She suggested city department heads discuss with the council changes they would like to see. She also suggested the city hold public hearings to get citizen input on this and other franchise agreements.

Winter noted some things the city can’t control through the franchise agreement, such as rates the co-op charges its customers. Other things it can influence, such as behaviors in the city’s rights of way, unmaintained poles and how quickly the co-op must respond to outages.

Mayor Ravi Bhasker asked if the city has the right to look at the co-op’s books to make sure SEC is paying the appropriate percentage in franchise fees to the city.

“Under generally accepted accounting principles, you have an audit right,” Winter said. “You have the right to look at everything that generates an income. They can’t just give you a select few pieces of paper.”

She added the city can pull statements the co-op files with the Public Regulation Commission to compare that with what the co-op forwards to the city.

Bhasker asked about the SEC’s use of the city’s rights of way to co-locate other utilities.

Winter said generally, a utility cannot allow another company to piggy-back on its lines without telling the city about it.

“This is your taxpayers’ real estate … nobody but Socorro can give another provider permission to use your real estate,” Winter said.

Winter said the city needs to know every entity using a facility in the city’s right of way, and should have a separate agreement with each user. For example, if a pole gets knocked down, the city’s firefighters would want to know what services were on that pole.

To start working up a new franchise agreement, Winter suggested the city start with a couple of open meetings and take public comment. She noted the franchise agreement was both an ordinance and a contract between the city and utility; it is a negotiation with the utility, but also requires a public process.

Winter noted the franchise agreement was a three and a half page document from 1972, with no reference to insurance and very limited reference to audit rights. She added even the franchise agreement for the tiny village of Corrales and its utility is a 26-page, single-spaced document.

Councilor Nick Fleming noted the old agreement stipulates franchise fees only be charged to residents’ utility bills, and asked if that was the norm. Winter said it was not.

“Generally speaking, it’s on gross revenue — regardless of the source of revenue,” Winter said.

She said for whatever reason, in 1972 the city decided not to charge franchise fees for any electricity sold for industrial consumption like manufacturing or mining; not to charge educational institutions and not to charge any city account.

“Now that one I have seen; the city of Raton also does not get charged franchise fees on city accounts,” Winter said.

Councilor Gordon Hicks asked if the city could see what other franchise agreements charge the different customers. Winter said she has multiple examples, and will find some for communities close to Socorro’s size for the city to examine.

Luis Aguilar, president of the SEC Board of Trustees, said it was about time for the city and the co-op to discuss franchise terms. He requested the city share everything they were looking at with the co-op.

“And that way, just like a choir, let’s all sing from the same sheet of music,” Aguilar said.

Bhasker said it could be months, possibly even a year, before a new franchise agreement is put together. He listed things that need to be discussed: the “spaghetti” that needs to be taken off the poles; co-locating lines without the city’s knowledge, which was something he’d mentioned on purpose; the question of whether to charge franchise fees to educational institutions and the issue of auditing the co-op’s books.

Aguilar said the books are available at the co-op for the city to review at any time.

Bhasker said the city’s franchise agreements with CenturyLink and Comcast have also lapsed and will have to be examined.

In other business, the Socorro City Council:

• Approved an agreement with Socorro County to donate property in the city’s industrial park to the county where the county can built its new detention center. Bhasker noted the county will clean up the property and do landscaping, and the project will enhance the city’s industrial park area.

• Accepted a MAP grant through the New Mexico Department of Transportation to complete the dog leg on J.O. Gallegos Road. Bhasker noted the city has been doing the road piecemeal, and has already completed the entrances to J.O. Gallegos from Frontage Road and El Camino Real. The resolution states the total cost of the project is $192,691, with the DOT share to be $144,518 and the city’s match to be $48,173.

• Approved the city’s infrastructure capital improvement plan for 2015-2019. The top five priorities, in order, are: U.S. Highway 60 improvements — adding one or two lanes entering city limits, which is also on Socorro County’s ICIP; wastewater expansion — extending sewer lines and improving the sewer plant; building of the rodeo/recreation facility; reconstruction and drainage improvements on Texas, Vermont and B streets; and drainage infrastructure and detention ponds on Cuba Road.

• Accepted a community transformation grant of $40,000 through the state Department of Health to expand opportunities for healthy eating and active living for local children.

• Set up a new fund to accommodate a $5,000 DOH grant for Socorro County Options, Prevention and Education, Socorro’s community health council.

• Reappointed Betty Salazar, Gilbert Apps and Joe Daniel Saavedra to the city’s Police Oversight Commission for two-year terms beginning Oct. 1. Chuck Zimmerly and Santiago Naranjo were appointed to one-year terms beginning Oct. 1 on the POC.

• Appointed David McDaniel and Michelle Herring to the city’s Juvenile Justice Committee for one-year terms.

• Approved a job description for the city’s information technology director position.