Clarifying Tax and Rate Increases

Only Gerald Nichols, Taos County’s Chief Appraiser, and KCEC’s CEO Luis Reyes can truly clarify or explain the impact of tax and electricity rate increases in the County or at the Coop. Gerald did it for the TMS Board on Monday and Luis invited the press to his office on Tuesday. We urge political leaders—especially–and journalists as well as members of the public to consult with Gerald in the future before engaging in tax talk. If the schools had met with Gerald and understood the implications of selling bonds earlier than anticipated, perhaps the public and the politicians would be suffering less today–due to real “tax lightning.”

This morning, according to Taos Horse Fly, Mayor Darren Cordova, will recommend to the Town Council later this month that the proposed GRT increase be withdrawn—due to the economic difficulties Taosenos are experiencing. We applaud the Mayor for his wisdom and diplomacy.

Basically, property tax evaluations are driven by state mandates and are set in response to the market value of property. If the base value of the property in the county expands in total, the tax rate declines. If the base value contracts, the rate goes up to maintain debt service, government overhead, etc. The Assessor’s office evaluates the numbers and the Treasurer’s office collects the money–but the state sets values for property. Don’t blame the County’s three graces—Elaine, Darlene, and Vangie.

Here’s how we understand KCEC’s proposed rate increase, according to Luis. We are using general terms. For instance, the Coop will ask for an increase in the residential “access fee”—from $10 to $20–to cover overhead expenses. In this way, KCEC can count on fixed fees to pay overhead even as the purchase price of power—fuel and energy charges—fluctuates. So as consumers use less electricity due to efficiencies or benefit from alternative sources like solar, the Coop will be able to function and pay its overhead.

In the past, efficient use of electricity by members very often resulted in losses to the Coop. The Coop is looking for stable sources of revenue to maintain the enterprise. Think of the systems or access fee like the fee assigned by the phone company, which covers the costs of poles, wires, meters, etc. You pay for the phone service (landline) whether you make phone calls or not. According to Reyes, the price per kilowatt for members may actually drop a marginal amount.

A Coop, as Luis said, is debt driven. Long-term USDA—RUS loans keep infrastructure costs low so that the costs to members remain affordable. That’s his answer to critics, who question Coop debt. KCEC designs rates based on a 5% return as opposed to investor owned utilities, which require a 10% return on capital—as does Tri-State. There are several classes of rates: residential, residential seasonal, small business (shops), large businesses (Grocery stores and ski areas), irrigators, and the Moly Mine—among others.

Rates vary according to class and are designed to be as fair as possible, according to Reyes. The Coop will notify members of the proposed increase in a mailing. Those who fill out protest forms are required to meet with the Coop prior to the PRC hearing in a mediation session. If differences and questions can be ironed out, so much the better. If not, then protestors will have their day at the PRC hearing.

Reyes notes that the PRC will focus on rates and very likely ignore issues of “diversification” and “policy”—complaints about Propane or Tri-State. He acknowledges, “There’s no good time to raise rates.” The rates are basically designed to reduce the amount paid per kilowatt hour for homeowners. If the homeowner or business engages in efficiencies like using CFLs and energy-wise appliances or manages power use by working during the “off-peak” hours in a timely manner, then the end user may see a savings—regardless of the increase in the access fee or raise in rates—according to Luis.

Now it’s time to turn our eyes to the blue skies and fight with the air force—a worthy opponent. According to news reports, the Obama war machine wants to make mincemeat of our skies. And the NSA wants to continue processing material for WMD at LANL–that “nest of spies.” We need to unite in our opposition to the government’s proposed adventure in ornithological conversion to the dreaded “Osprey.”

TAOS COUNTY BOARD OF COMMISSIONERS

EMERGENCY MEETING

THURSDAY, SEPTEMBER 23, 2010

8:30 A.M.

TAOS COUNTY COMMISSION CHAMBERS

NOTICE TO THE PUBLIC

Notice is hereby given that the governing body of Taos County, the Board of County Commissioners, will hold a Emergency Meeting on Thursday, September 23, 2010, at 8:30 a.m. The meeting will take place at the Taos County Commission Chambers located at the Taos County Courthouse Complex, Administration Office, 105 Albright Street-Suite A, Taos, New Mexico.

AGENDA

I. Call to Order

II. Roll Call

III. Pledge of Allegiance

IV. Approval of Agenda

A.             Amendments

B.             Withdrawn Items

V. Action Item– Discussion, consideration, and decisions regarding the following:

A.            Approval of Amended Property Tax Rates – Darlene Vigil, County Assessor

VI. Adjournment