Work Session Meeting February 10, 2025 MINUTES Work Session Monday, February 10, 2025 @ 1:00 PM City Council Chambers, City Hall PRESENT: Councilor Johana Bencomo, Councilor Yvonne Flores, Councilor Becki Graham, Mayor Eric Enriquez, Councilor Cassie McClure, and Councilor William Mattiace ABSENT: Councilor Becky Corran 1. JOBS OF THE WEEK 1.1 Sarah Raney, New Mexico Workforce Connection presented Jobs of the Week. 2. PETS OF THE WEEK 2.1 Carol Nielson, Animals Services Center of the Mesilla Valley presented Pets of the Week. 3. AGENDA ITEM 3.1 REVIEW EL PASO ELECTRIC COMPANY FRANCHISE AGREEMENT. Adrian Widmer, Utilities Director gave the overhead presentation. Councilor Flores asked so, the franchise, the benefits that the city gets, is the money? What are the terms of the franchise? Adrienne Widmer said it’s pretty much a typical franchise that includes the grant of authority that El Paso Electric can be here and actually provide electric service so that they have overhead, underground, they’ve got the substations and so forth. There are things where the city and the company are going to comply with all present and future laws. There’s a lot of information in there. There’s requirements of record drawings and to get those to us in a timely manner and then that any kind of installation work it’s going to be done in intelligence, we have indemnification for each other. El Paso Electric is going to furnish service, under rules and regulations. They’re going to go out, like they do now, if there are trees in the way of their lines, they are going to trim them. Just the typical franchise agreement. We’re here in your city’s right of way and we are providing service, and we are going to give you X amount of money. Councilor Flores asked so, you said that one of the terms is indemnification for both parties? What does that cover? Is it specific? I mean if there is malfeasance on any part. Adrienne Widmer said so, it is subject to any applicable laws and regulations of the state of New Mexico, or the customer rules of service, and the company shall indemnify and hold harmless the city, its governing body, officers, agents and employees from and against any and all claims or obligations caused by acts of negligence of the company, its officers, agents or employees, contractors or subcontractors in connection with the installation, repair, operation or maintenance of any of the company’s facilities or on any work done as authorized or required by this franchise. The city shall give prompt notice to the company if any claim or suit arising under this franchise and the company and/or its issuer shall have the option to compromise and defend the same to the extent of their own interests. Nothing in this section shall be construed to depart from the present or future law of New Mexico concerning contribution among or between joint tortfeasors. Councilor Flores asked joint tortfeasors in so far as a lawsuit coming from a third party? Henry Becker, Assistant City Attorney said a tortfeasor is an individual found responsible for harm against another individual, in this case I believe the indemnification language refers to multiple people who are their actions are jointly affecting the El Paso Electric line and so, I had my own question about that provision, but we will get back to you about that with the meaning so that might mean, as far as that indemnification provision is concerned. Generally speaking, this indemnification provision is to make sure that El Paso Electric indemnifies the City against claims against the City. So, El Paso Electric, if any claims were successful, would be paying for those. Councilor Flores said but then that brings El Paso Electric to defend that. Henry Becker said correct. Councilor Flores said so then it just turns into a lot of litigation. Henry Becker said as it commonly does, Councilor, there will be litigations sooner or later someone will bring claims. Councilor Flores asked so, in your reading of this, does it in any way bind the city, it’s ‘til many years from now, right? Another twenty years from now, I think? Adrienne Widmer said twenty years after it is fully executed between the Mayor and El Paso Electric. Councilor Flores asked yeah, so, that indemnification agreement can be relied upon if there is a lawsuit against the City, against El Paso Electric and that party suing would be whoever? I’m just trying to understand exactly what the benefits are of being indemnified. It seems like if someone is a wrongdoer, but they’re indemnified, how do you get any relief? Henry Becker said the indemnification provision is a standard one for cities and municipalities, so what it does is if there is a claim against the City, say, I’m just making it up, someone hits a powerline, something like that, loses power and there are damages associated. An individual can sue the City, I don’t mean they may have a good reason to, but they may, for some reason, and then this indemnification provision allows the City to rely on El Paso Electric to pay any damages that are actually established in a judgement. It’s entirely hypothetical, but yes, we can rely on this indemnification provision for that reason. Councilor Flores asked ok what is the benefit to El Paso Electric? I mean, that’s our benefit, the City’s benefit, being indemnified, what’s their benefit? Rico Gonzales, El Paso Electric, said your question is specific to the indemnification. What’s the benefit for us to have that in there, or the benefit overall for having a franchise agreement with the City? Councilor Flores asked well, I guess it encompasses both, Mr. Gonzales, but the indemnification part, is it automatic, is it just as our legal councilor noted? If there is an accident, an electrical line goes down, or something, then the City is indemnified from being sued by the tortfeasor. And then El Paso Electric would be totally responsible for defending against it or what? Rico Gonzales said I don’t know if I’ll go into specifics of whether someone is sued if they have the right to sue the City or El Paso Electric. What I will say is in looking at other franchises, indemnification for the municipality who is signing on to the franchise has always been part of franchises that I have seen. I think from a more specific perspective of indemnification, and the value of that to El Paso Electric, if it pleases the council, I’m happy to bring in our counsel to talk about that a little bit more from a historical perspective and maybe a legal perspective, but there’s always been in any franchise and I’ve now worked on Mesilla’s, Anthony’s, Sunland Park’s, a few of the counties we serve, this indemnification language is part of having the franchise agreement. Councilor Flores asked are there any terms in that agreement that would allow, well there would have to be litigation if there were any questions as to whether there should be or not be indemnification, right? Or does it just go to an arbitrator? Rico Gonzales said I don’t know the answer to that question. So, I’ll have to get that to you, but I’ll get that to you as soon as this afternoon. To the benefit of the franchise, for El Paso Electric, so, we serve this territory, it’s a territory that the state has provided to us and the franchise provides for our trucks to be able to be in the roadways of the city to be able to provide service to your constituents and our customers for the extended period of time. And it also gives our crews and leadership the ability to have something written down that says this is the way that we are going to be doing our work. So, we are not necessarily needing to go through permitting for every single piece of work that we do. It also allows us to be in an emergency in roadways incase something happens with the line or the like. So, from our perspective, it’s a very valuable tool to getting the work done that we need to do in the long-term piece, and to that end, that’s where we agree to collect the franchise agreement funds and get them over to the City and as a piece of ensuring that it’s compensated one way or another being in the roadways and alleyways and the like of the City. Councilor Flores asked so, it sounds like it’s a one-way benefit for the City or is there a benefit to EPE? Rico Gonzales said all of that is the benefit that we see. Councilor Flores asked to avoid litigation? Rico Gonzales said not necessarily to avoid litigation, but to be able to use your roadways and your alleyways to repair and improve the lines that we have for our customers. So, we get that opportunity to be there with the agreements that are inside these pages. Councilor Flores said so that’s pretty much the benefit you get out of this agreement. Rico Gonzales said yeah. Councilor Bencomo asked the agreement is for twenty years and that’s normal, that’s a standard franchise agreement timeline? Adrienne Widmer said different franchises can have different years and so previously we’ve even seen them where they’re at ten, fifteen years and so on this one, we negotiated back and forth, and we said, ok we do it for twenty, then we will review it in ten years. If something else comes up, then we will circle around and get together and have a discussion again. There’s nothing that stops us from having additional discussions, but I think it gives a longer-term comfort level to both the City and El Paso Electric that we know what each of us is supposed to be doing for twenty years with a ten-year review to find out is that working or is there something that we need to make changes to. Councilor Bencomo said thanks for clarifying that, Adrienne, just thank you to the parties that came together to make these negotiations, I won’t pretend to know more than any of you, so I appreciate that work. And then just lastly, I think this isn’t for today’s meeting, but in the future, I would love to discuss how to best invest the fees coming in. Rather than just going into the general fund or again how we can best invest these back into our community. I know that that can happen at a future time. But that was really the only clarifying question I had, thank you. Councilor Mattiace said streetlights, maybe someone can answer this, either David or Rico or Adrienne, sometimes I get that the lights are City, and sometimes I get the lights could be El Paso, the streetlights and I have some lights out on Mesa and Haggerty, and since I have all three of you here, maybe we can get those repaired and turned on. So, here’s my request. And then on the investment idea that Mayor Pro-Tem had, it would be nice to have some kind of dedicated funds so that when people feel that there’s not enough lighting in their street, we could actually tap a fund that we could get those streetlights up and installed quicker than going through a lengthy process. Mayor Enriquez asked is there a deadline when this is to be signed off or issued? Adrienne Widmer said no, not necessarily, but like anything else, the sooner the better. So, I know that El Paso Electric has been asking when are we taking it? So, we got the ok to bring it forward, and so it is completely up to you all. So, we can schedule the first read whenever you’d like and then I do believe that the City Manager was hoping we would have further discussions when it comes to what you all want to invest that money into. Mayor Enriquez asked just for El Paso Electric’s timeframe what kind of date are you looking at? Rico Gonzales said I think as soon as we can do it would be fantastic, we’ve been going on an implied franchise and so it takes I believe it is 30 days in this franchise that we would need to once it is passed to be able to implement the 3% and that mostly takes into our billing system, get that into the billing and get that cycled in and so yeah, we would be willing to see rules amended and you guys go into full council and do it right now. No, I’m kidding. Mayor Enriquez said we’d all like to see that, but not going to happen. Rico Gonzales said it was just an idea. Mayor Enriquez said the other thing is looking at a twenty-year term, I think long term would be good, would El Paso Electric or anyone be opposed if we reviewed every seven years as opposed to ten years? I think a lot of impact fees are viewed that way as well so it would be an opportunity to maybe review it every seven years. Rico Gonzales said I won’t sit here and negotiate right now, but I don’t think that would be a big issue, but I’ll take that back to our general counsel and ask them and if that’s a change I think that’s an easy change to make in the document per se. Councilor Bencomo asked just a clarifying question, so since 2009 we’ve been operating under a 2% franchise fee then? Rico Gonzales said under an implied franchise, so it ended in 2009, but the statute allows us to continue as long as everyone is ok with what it is. So, yes, we’ve been at 2% on the bill, so you can see it on your bill, that it says City of Las Cruces franchise fee and it sits right there. Councilor Bencomo said ok, interesting. And then that’s actually my next question, the passthrough really is ultimately this 1% increase the customer will end up seeing the impact of that. Rico Gonzales said that’s right, the passthrough, I think we pay it quarterly? Ok, we pay it quarterly so that it comes in, we put it into an account, we send it over, it’s never part of any of our rate making, it’s never part of our rate case, it’s just a straight yeah. Councilor Bencomo asked is there any particular reason why we hadn’t brought it up before since we’ve been operating under this implied franchise agreement for this long? Rico Gonzales said I think we’ve just been having negotiations going back and forth and a little bit of change in City Manager and change at El Paso Electric and you know, things happen and so it comes on and falls off, but I think we’ve got the efforts of all aligned to be here today. 4. ADJOURNMENT 4.1 Councilor Johana Bencomo moved, seconded by Councilor Becki Graham, to Adjourn at 1:31 p.m. RESULT: Carried MOVER: Councilor Johana Bencomo SECONDER: Councilor Becki Graham AYES: Councilor Johana Bencomo, Councilor Yvonne Flores, Councilor Becki Graham, Mayor Eric Enriquez, Councilor Cassie McClure, and Councilor William Mattiace Mayor City Clerk