Ellen Mills asks questions submitted by League of Women Voters members for Los Alamos County Manager Harry Burgess during Tuesday’s webinar. Photo by Maire O’Neill/losalamosreporter.com
Los Alamos County Manager Harry Burgess used his time as guest speaker Tuesday during a League of Women Voters virtual meeting to bring members up to date on the County’s budget hearings and delve into several issues related to the local COVID-19 response.
LWV members noted later that they were pleased with the depth of Burgess’s presentation on the budget and his in depth answers to questions they asked following the presentation.
Budget hearings began Monday and Burgess said the hearings themselves are really the tail end of the process. In December he starts giving guidance for budget development to the various County departments asking them to remain consistent with what they already have in place.
“I ask them to remove all those one-time approvals from the prior year and leave us with just a base budget that would be enough to keep the lights on and keep their operations as each department performs them on an annual basis while maintaining the same number of personnel with each specific program that was already enacted included,” he said.
Then monies are added for a variety of things such as health insurance and the annual salary plan as well as the opportunity for staff to get raises based on performance. Contractual issues with an outside agency that performs or provides a certain level of services are added and sometimes those are multi-year contracts with an annual increase. All these items are put into a base budget so that when staff go before Council there is a basis for operations moving forward, Burgess said.
“Any increases or additions to what we’re performing at present would be the subject of Council deliberations. The budget presentation to Council consists of the base budget and budget options,” he said.
Burgess said obviously for this year the COVID-19 emergency has caused everyone to operate a little bit differently and Council is now solely broadcasting meetings from the Municipal Building instead of having in-person attendance with everyone now attending from home via Zoom. He said budget planning began in December before the words COVID-19 were known and that some of the preparations were towards a different situation than we have today.
At the end of March, a summary of a budget proposal was sent to every household in the County but it did not consider any COVID changes.
“We did not restart our process when we changed our operations for this COVID response, but we did give updates to Council on how this emergency may affect both our expense side and our response need as well as our revenue side because with certain businesses closing or not serving the public right now revenue generation in the form of taxes is not occurring,” Burgess said.
He noted that the County is operating in some austere times with the COVID emergency so it has largely reduced its operations.
“We have sent personnel home to telecommute or in some cases they were placed on emergency paid leave, which means that they have to stay aware, follow emails and be available for call-back if needed,” Burgess said, adding that certain personnel such as himself come to the office when necessary such things as signatures and approvals.
“There are a number of operations that are still fully functional – everything from law enforcement, fire and EMS operations, utilities, solid waste and the eco-station as well as a number of parks and recreation personnel that need to maintain the existing parks and some of our infrastructure so that when we reopen it remains functional,” he said. “Obviously everything needs to be maintained even when it’s not being used on a daily basis. So we still do have quite a contingent of individuals that are actually physically coming to work on any given day and providing a certain level of service.”
He said construction activity was deemed to be an essential service and in order to do new construction people must be able to obtain permits and have the necessary follow-up inspections to get their project completed.
“We haven’t closed our doors completely but we certainly have sent as many people home to either telecommute or simply be available for future needs as – as many as possible to be responsive to the governor’s directives,” Burgess said.
He showed slides of the breakdown of budget revenue noting that as an incorporated county, Los Alamos has authority to tax both gross receipts and property.
“Because of that we have a somewhat unique perspective because most counties would have the inverse, showing the majority of their revenue coming from property tax and very little coming from GRT,” he said.
Burgess said the majority of the County’s revenue is from GRT with about 95 percent coming from Los Alamos National Laboratory and so that is a consideration when County staff are looking to develop the budget for the coming year.
“The Laboratory is still operating today. We’re seeing fewer people in transit between their home and the Lab itself, but as I understand, 77 percent of their personnel are now working from home and the remainder have to come in to the Laboratory to do certain mission-critical or security-critical work that they cannot perform from their house. However, they’re fully operational despite the fact that many people are working from home. What that means is that the contractor, Triad National Security, is still performing their contract and when they are paid by the federal government that generates gross receipts tax for our community,” he said.
Burgess noted that although there are many restaurants and retail locations closed right now, that is a small portion of the County’s overall revenue collections.
“To date our conversations with the Laboratory are that they intend to continue in the same operational structure and we do not anticipate a significant reduction in our overall tax revenue because of that fact,” he said.
Looking at the proposed budget for FY2021, revenues have a 3 percent increase despite the COVID crisis – after taking into account all the potential impacts, Burgess said. Comparing the base budget to last year’s, he said some of the numbers are higher and some are significantly lower after taking out the one-time expenses.
“Overall we have expenditures of $61,520,000 which represents a .6 percent increase over last year’s number. Our proposed base budget is only slightly larger than last year’s for the general fund,” he said.
Burgess noted that there had been some concerns that the total proposed budget is about $26 million higher but that is primarily for a planned project with the Utilities Department which involves replacing the White Rock Wastewater Treatment Plan which will cost them $21 million which has to be budgeted in this next year.
After presenting the base budget, County staff then goes back to Council and ask them for changes, he said.
“We provided to Council a total of 65 budget options which are things that have come up that are operationally needed or specific requests from the community or from Council for new programs,” Burgess said. He explained that he took the requests and ranked them A, B, C, or D just to give a first pass at these various projects so that Council has an idea of his perspective of the importance of the individual requests pursuant to the County’s obligations to provide services to the community.
With regard to reserves in the budget, Burgess explained that municipalities are required by the state to have a 3/12ths reserve and counties are required to have a 1/12th reserve because they get a GRT distribution every month so they have a more regular revenue stream and don’t need as much in reserves
“The County has taken an extra step. Beyond those state-mandated reserves we have our own financial policy that requires us to also set aside an additional 20 percent of our annual revenue for our reserves. For this year, that amounts to $14.8 million that the County has over and above those state requirements,” he said. “There is also just over $14 million in additional reserves or surplus which is the number Council has to play with when they’re considering those budget options. They don’t have to spend all that, but they know that they have it available.”
He said the County is healthy in that it has additional reserves per its own policies but also has almost the same additional amount of unassigned reserves beyond the stipulated 20 percent.
“We have a very healthy budget that allows us to provide a high level of service to our community and it’s through years of conservative practices that we’re able to build up and even maintain that surplus,” Burgess said.
Subsequent questions from LWV members included a couple about the wearing of face masks during the COVID public health emergency. Burgess said that in New Mexico, the Department of Health has taken primary operational leadership because they’re coordinating medical resources beyond Los Alamos County borders.
“So the directives you’ve seen have been coming from the governor and not the County Council as far as restrictions on businesses that operate and other regulations such as the stay-at-home come from the governor’s level. We do not in our charter locally the authority to do certain things that the governor does. We do not have the authority to initiate martial law, for example, as that was not considered in our charter and we did not give our own elected officials the authority for those types of actions,” he said.
Burgess said the County has been following and supporting the state’s directives to date, encouraging where it can. He noted that County employees have been encouraged to use face masks but that there have been difficulties procuring them. Some have been ordered from businesses and the County has arranged with local sewing groups to provide employees with masks.
“We couldn’t really mandate them until we had them. We are encouraging our employees to wear them when they’re interacting with the public and when they can’t maintain that six-foot distancing that has been recommended. If you look at the governor’s order it similarly did not mandate the wearing of face masks but recommended them. It used the word ‘voluntary’ in the directive itself. So we don’t have the authority to go into a business or total to someone walking down the street to enforce a governor’s directive that doesn’t exist. There is no mandatory wearing of face masks,” he said.
Burgess noted that County Councilors have reached out to Smith’s management and has been maintaining communications with them on the face mask issue as well as having shopping hours for seniors.
“We have been following up with them to encourage and promote the use of face masks – identifying the fact that people are concerned and encouraging them to provide staff with masks so that they can wear them and direct them to do so. We cannot, but the employer could, direct their own employees to wear them. Our communication is more about encouraging them as opposed to sending the police in and asking them to do it very directly,” he said.
Burgess also fielded a question about LANL’s mandate to produce plutonium pits in Los Alamos. He was asked what influence he has to ensure that decision is carefully considered by the Lab since so many parties affected live in Los Alamos and enjoy the safe, natural beauty of the town and if he meets with Lab Director Thom Mason or his staff to discuss such changes.
“With respect to Laboratory policy, that is not an area that I have influence. I’m not in that group. We do however, meet with Lab management regularly. I don’t meet with Director Mason, I meet with the federal representative, Mike Weiss the NNSA Site Manager and Thomas Johnson who is the Site Manager on the Environmental Management side. Mr. Mason is a contractor to the federal government and they work obviously at their direction,” he said. “Our Council chair interacts with Mr. Mason on a regular basis to keep those lines of communication open. We also travel to Washington, DC multiple times a year to promote County and community interests.”
He said usually when the County gets involved in situations with the Lab, they are areas of mutual interest that the County is trying to promote.
“We have not entered into a situation where we’re trying to direct the mission of the Laboratory as that is not what we’re elected or employed to do necessarily. However, when it comes down to community safety, we do promote those types of issues and it’s come into effect with cleanup, it’s come into play with the traffic situation. It’s certainly an issue with the housing considerations right now. Obviously the whole community has been Lab property at one time and much of that property is transferred to us to then put into use for housing or business. We do interact from the point of trying to promote a safe and healthy community,” he said.
Burgess noted that the County has lobbied quite a bit for legacy waste cleanup monies and been successful in doing so. He said when specific issues arise such as the discovery of certain materials on DP Road that occurred back in February, the County interacts with the Lab to ensure the safety of the community as it tries to mitigate those issues. He said That includes everything from responses and responders, to having trained personnel on site to be able to determine whether or not there is a hazard.
“So the answer is a bit of yes and a bit of no but it’s focused on the points of specific interaction where we have mutual interests as opposed to trying to direct Laboratory operations. I will say that the County Council did pass a resolution supporting the pit production mission and that was obviously interest in the economic influence of having additional people and mission here as opposed to seeing that mission go elsewhere. That was two years ago, so they have expressed support for the mission while also promoting that it’s done safely and that none of that activity negatively affects the people living here,” Burgess said.
He noted that in prior years as well as this year the County always makes a point of discussing directly with the Laboratory finance and procurement departments what their spend is going to be.
“It doesn’t matter what the budget is. What matters is what they spend because there might be a given year like this where for whatever reason they don’t get to fully expend the amount or certain times when we have had continuing resolutions at a federal level where they reduced the amount of money that can be spent by the federal government at the Laboratory. We have to be responsive to those influences,” Burgess said.
He said the County has been in communication with the Laboratory as this year’s budget was being prepared.
“We typically meet with Lab personnel in the December to February timeframe to get an idea of their expected spend over the next fiscal year. We asked some very directed questions about how the situation was going to change and we followed up in March after the various closures occurred to see if there had been any change between their anticipated spend before and after. Because they’re still operational, because they have not layed anyone off and have not stopped any of their projects, they’re still projecting a similar spend over the next fiscal year which would support our original numbers that we proposed,” Burgess said.
He said to be conservative the County has reduced its revenue numbers by $1.5 million for FY2021 and FY2020 budgets. He noted that the County doesn’t anticipate getting any revenue from its investments over the next fiscal year.
“I recognize that we are different from many of our other communities that are suffering from such a loss of retail businesses. We’re not anticipating the same type of effects on our community,” he said.
Asked if the County was working on having any more COVID-19 testing events scheduled such as the April 9 event at Overlook Park, Burgess said at the time the Department of Health came out for that event they also tested everyone at the BeeHive Community in White Rock.
“That day, we were talking to the individual in charge of these pop-up testing sites and he indicated that the state was first trying to get around to the majority of the communities to do these one-day tests to address that need but that then they would be recirculating in order to come back and do additional testing later. They also wanted to come back to specifically test our other retirement homes,” Burgess said
Since that time he noted that the Department of Health also stood up a regular testing site by appointment every Monday and Wednesday morning for a couple of hours at the Public Health Office in Los Alamos.
“I anticipate that’s going to be their answer for the near future until we get to a point where they’re doing more specific action or broad-based testing to work on reopening plans because of conversation on how testing will drive that. Both the existing testing and anti-body testing may be useful in determining if people have had COVID-19 and are no longer susceptible,” Burgess said.