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The original item was published from 3/1/2022 1:28:27 PM to 3/7/2022 12:00:01 AM.

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Posted on: March 1, 2022

[ARCHIVED] City Council Work Session Recap for Feb. 28, 2022

City Council Without Masks

In a continuing review of natural gas rates, the Las Cruces City Council has asked the Las Cruces Utilities director to provide two proposals that could be considered for a possible gas rate increase.
 The Council’s request was made during its work session on Monday, Feb. 28, 2022, in Council Chambers at City Hall.

The proposals include one for a possible 30 percent increase in natural gas rates to the small commercial rate class charged by the municipally owned utility. A second proposal is for a 21 percent rate increase with other rate classes absorbing the difference.

The two proposals would apply to the volumetric base-rate portion of the natural gas bill. Any change to the natural gas rate would be phased in during a three-year period.

Las Cruces Utilities Director Delilah Walsh said various increases in the natural gas rate across rate classes are needed to offset a $1.46 million revenue gap for the utility. She added any rate increase of less than 30 percent to the small commercial class will require direction from City Council about how the remaining portion of the rate increase would be made up to offset the revenue gap.

In December 2018, the Las Cruces Utilities Board of Commissioners authorized a rate review for the natural gas utility. It was later determined there is a $1.46 million gap in natural gas revenues. Natural gas rates have not been increased in 11 years.

On Dec. 9, 2021, the LCU Board voted and determined a recommendation to City Council that new rates should be phased-in over three years for all customer classes. The recommendation also stipulated no new debt will be included in the revenue requirement calculation, and that new rates will not be implemented until an Emergency Commodity Recovery Surcharge is complete. The recovery surcharge is anticipated to be completed this summer.

An increase to natural gas rates would cover salary and benefit increases mandated by the City; operation and maintenance expenses; regulatory expenses and system repair and maintenance; and equipment and vehicle purchases. If an increase is not approved, operation and maintenance expenses would be lowered; capital infrastructure and repair projects would be deferred; and equipment and vehicle purchases also would be deferred.

There was Council discussion that the proposed 30 percent natural gas rate in one class could be disproportional to small businesses that are still affected by the COVID-19 pandemic. There was Council consensus to explore the possibilities of finding a possible compromise for a natural gas rate wherein other classes support the cost of service in the system.

Additionally, City staff presented a quarterly update to City Council on the status of General Obligation Bond projects.

The Council learned:

  • Improvements to the Hadley Recreation Complex are complete.
  • Improvements to parks and sports courts are approximately 89 percent complete. Those improvements are anticipated to be completed in April.
  • Work at Unidad Park is about 43 percent done and the project could be finished by early July.
  • Construction of the East Mesa Public Recreation Complex will start this week, as has a portion of Sonoma Springs Avenue, which will provide public access to the complex from Sonoma Ranch Boulevard.
  • Earthwork for the Rinconada and Burn Lake dog parks is about 95 percent complete. Installation of fencing at the Rinconada Dog Park is still ongoing, and work continues on sidewalks, fencing, and utility installation at the Burn Lake Dog Park. Construction of the two new dog parks is estimated to be completed in late September.
  • Construction of the new Animal Services Center of the Mesilla Valley is estimated to be at 44 percent, with completion anticipated in late September.
  • Fire Station No. 3, at 390 N. Valley Drive, is about 97 percent complete. A Temporary Certificate of Occupancy was issued in January, the project is expected to be completed by the end of March.
  • Walking, jogging, and biking trails are about 95 percent complete and are anticipated to be finished by late April.

All GO Bond projects are scheduled to be completed by the end of this year. Information about GO Bond projects is available online at

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