Underground fuel storage tanks have been a major liability for businesses and local governments if the tanks leak and contaminate the ground around them.
Ignacio has an underground tank at its public works shop. Interim Town Manager Mark Garcia told town trustees on July 20 that the town has not been doing cathodic protection testing to make sure the tank metal isn't corroding. "The state says we have to do that. Maybe this is an opportunity to remove the tank," he suggested. The town would fuel its vehicles using gas cards at local gas stations instead.
He said the lowest price quote to remove the tank and do compliance testing was $7,500, versus about $1,500 a year to have a consultant do cathodic protection testing.
"It's not a budget line item (to remove the tank), but if we want to look at re-developing that site, this might be the time to remove that tank," Garcia said. "Most governments use fuel cards instead of keeping fuel tanks. If there's contaminated soil, there could be more expense. That tank has been there for a long time, so there could be some minor contamination."
New public works director Jeremy Schulz advised that if the tank stays, someone on staff will have to be trained and certified as an underground fuel tank operator.
Garcia said the Environmental Protection Agency wants a decision on this. "If there's no objection, we'll correspond with the EPA that we'll remove the tank. We'll find the bid that's most appropriate, do some background checks."
The tank isn't losing fuel, he said, but Schulz speculated there will be some surface contamination to be addressed.
Garcia also recommended making two seasonal public works employees permanent, so that Schulz and Stan Cox won't be the only ones on call to respond to after-hours emergencies. He proposed making Cox a foreman so that Schulz can spend more time overseeing grant projects. Trustees did not indicate any objections.
The town is applying for grants for a utility mapping project, with the town trying to get an extension of a previous grant, and to create a capital improvement plan with an analysis of utility rates. The town also has applied for a grant for gas line replacement.
A downtown revitalization grant for town branding will be overseen by Development Director Dan Naiman.
Treasurer Diana Briar reported on town finances through June. She reported that town sales tax revenues are doing well for the first six months of 2016, unlike Durango and the county where sales tax revenue has been down somewhat. A share of county sales tax is the town's big revenue source. Briar advised, "I think for next year, we'll need to be more conservative for county sales tax."
The 2016 budget projected $280,000 for town sales tax and $720,000 for the town share of county sales tax revenue.
Garcia said, "The local sales tax numbers are better than projected, in line with projections for Family Dollar. Revenue-wise, I think we are fairly on track." The Family Dollar opened at the end of April.
Briar said the first six months were not affected by a tribal sales tax exemption that's actually been a law for a long time, (a state law passed in 2014 supposedly clarified the requirement) as reported in the Times on June 24, but prospects for eligible tribal members to seek the exemption started in June. The tribe sent notices directly to town businesses. "They (tribal members) have to request it, or it's not granted," Briar said.
Briar and Garcia complained about the long time, about three months, that it takes for the county to remit county sales tax to the town. "I've only gotten county sales tax through April," Briar said. Town sales tax is remitted directly by the state on the first of each month, Briar told the Times. The amount for May arrived in July.
The town had spent 54 percent of its general fund budget as of June 30, Briar reported. That's town hall staff and operating costs, public works, police, community development, parks, and municipal court. The budget for the year is $1,748,470. Spending as of June 30 was at $941,744.
The town gets its water and sewer services and natural gas from the Southern Ute Indian Tribe. Those funds are supposed to be self-supporting. The tribe adjusts its rates each October. Last fall the town didn't pass through water and sewer rate increases to town customers.
Briar reported that water revenue is averaging $18,500 a month versus $18,000 in expenses. The narrow positive amount is because the rate increase wasn't passed through, she said. "There are some repairs that staff have to do that could put us over" for spending versus revenue, she said.
The gas system is in good shape for revenues versus expenses, Briar said.
The sewer fund is the biggest problem, with revenue averaging $38,800 a month and expenses averaging $41,200, she said. Again the deficit is because the October rate increase wasn't passed to customers. "When we budgeted last year, we budgeted expenses higher than revenue," Briar told the Times. "We budgeted that it would go in the red" and draw down fund balance. The 2016 budget projects $400,836 for sewer fund revenue and $499,843 in expenses.
Briar and Garcia proposed moving the town's bank accounts from Wells Fargo Bank in Ignacio because of high service charges and fees for things like talking to a live teller. Trustees worried about the logistics and security of someone taking daily deposits to Bayfield instead of across the street. They were mindful of the embezzlement loss from 2015 that came to light in January this year. Former town employee Jackie Mejia pled guilty to embezzlement charges in June. She is scheduled to be sentenced on Sept. 1.
The loss was $66,655. The town's insurance covered all but a $5,000 deductible, Briar said.
Trustees will consider the proposal to change banks at their August meeting.
At the June 15 town board meeting, there was considerable debate about the town's sign code. The sign code is on the town web site, www.townofignacio.com. It's in the Municipal Code, chapter III land use, section 3.7.1.
