Los Alamos County Board of Public Utilities Meeting - February 18, 2026

The Board of Public Utilities met in regular session on Wednesday, February 18, 2026, in the Council Chambers at the Municipal Building in Los Alamos, New Mexico. Six members were present and Member Charles Nakhleh was absent. The board approved the agenda, acted on two action items, received a preliminary FY2027 budget presentation, and approved a water storage tank maintenance task order and a White Rock Substation transformer preparation task order. The agenda and minutes list the meeting as running from 5:30 p.m. to 8:02 p.m.

Consent Calendar

• The consent agenda was approved 4-0 with Member Nakhleh absent. The only remaining consent item after the agenda amendment was approval of the January 2026 regular session minutes.
• The draft minutes text refers to the January 15, 2025 regular session, while the agenda and staff report identify the minutes as the January 14, 2026 regular session; no correction was made on the record for this apparent typo.

Public Comments & Testimony

• No oral public comments were made during the initial or final public comment periods. One unnamed Zoom participant did not raise a hand when invited to comment.

Department Business

Water Storage Tank Inspection and Maintenance - Task Order No. 4 with Souder Miller & Associates

• Deputy Utility Manager James Alarid presented Task Order No. 4 under AGR22-67b for potable water storage tank inspection and maintenance services, covering tank cleaning, water level indicator repairs, hatch sealing, leak repair, and full inspections.
• The work responds to a New Mexico Environment Department sanitary survey conducted October 7-8, 2025 that identified 36 corrective actions. DPU had already addressed 18 items, and the remaining items must be completed by April 7, 2026. Procurement authorized the work as an emergency procurement.
• The board approved the task order in the amount of $149,212 plus applicable gross receipts tax, including a 15% project contingency, and recommended Budget Revision 2026-41 in the amount of $185,441 to Council. The motion passed 4-0, with Member Nakhleh absent.
• There is a small discrepancy in the source materials: the staff report and motion use $149,212 and a 15% contingency, while the attached SMA proposal letter states $149,217 and the budget revision form states a 19% contingency.

DPU FY2027 Budget Presentation

• Deputy Utility Manager Joann Gentry presented the preliminary FY2027 budget and FY2028 projection. The proposed FY2027 expenditure budget is $100,071,991, an 8% decrease from the FY2026 adopted budget. The FY2028 projection in the packet is $145,507,481.
• No action was taken on the budget. Staff will return in March with a final budget for board approval and then Council consideration in April.
• The presentation covered a 10-year capital plan, an unchanged FTE count of 107.65, salary and union agreement assumptions, and rate trajectories. Draft rate assumptions included 8% electric distribution in FY2027 and 7% in FY2028; 9% gas in FY2027 and FY2028; 8% potable and non-potable water in FY2027 and FY2028; and 7% wastewater in FY2027 and 8% in FY2028. A staff narrative in the agenda packet describes FY2028 electric as 9%, conflicting with the 7% shown in the financial forecast table.
• Richard Valerio presented the debt coverage ratio projection: 1.15 for FY2027 and 0.85 for FY2028, both below the board's 1.3 target. An Electric Distribution Option 2, assuming a $4 million grant for the EA-4 project and delaying $4.5 million in bonding to FY2029, would improve the FY2028 debt coverage ratio to 1.34.
• Board members raised questions about reserve target calculations, large swings in unrestricted cash balances, LANL FY2028 load growth, gas sales shortfalls, and the impact of lower debt coverage on future borrowing. Chair Gibson suggested the board revisit the 2016 reserve policy, and Philo Shelton recommended holding a reserve discussion at the March 4 work session. Additional budget discussion was also scheduled for March 4.

White Rock Substation Transformer Project - Task Order No. 3 with Sanbros Corp.

• Deputy Utility Manager Dennis Astley presented Task Order No. 3 under AGR24-04d for preparation work at White Rock Substation. The new transformer foundation requires four piers 21 feet below grade because rock is about 30 feet deep, and the work includes rerouting SCADA and DC power cables for transformer T2, excavating the oil containment pit, and installing conduit.
• Board members asked technical questions about the bus connection and conductor sizing. The cost of drilling the large piers will be covered by a separate task order.
• The board approved Task Order No. 3 in the amount of $299,719.24 plus applicable gross receipts tax for a term of 120 days. The motion passed 4-0, with Member Nakhleh absent.

Board Business and Reports

• Chair Robert Gibson thanked Vice Chair Matt Heavner for presiding previously and reminded members to keep the executive assistant informed of their availability for future meetings.
• Utilities Manager Philo Shelton reported on Elk Ridge with 22 homes connected to the new system and about 150 remaining, recruitments, Electric Coordination Agreement negotiations, chromium plume monitoring, the Two Mile Canyon 18-inch water line repair, PFAS sampling, DP Road staging area work, and the vertical switchgear project coming in under budget at about $3.1 million against a $3.3 million budget. Member Eric Stromberg asked whether Elk Ridge homeowners had paid any out-of-pocket costs; Shelton was not aware of direct costs but noted possible water heater replacements.
• County Manager Anne Laurent reported on the aquatic center closure except for Leisure Lagoon, Fire Station 4 rebuild bidding, a February 26 special meeting with the school board about North Mesa housing, broadband bond closing and a 3-5 year buildout, a meeting with DOE EM official Tim Walsh, a March 23 trip to Washington, D.C., and NMED fines issued to DOE-EM.
• Council Liaison Ryn Herrmann reported that the February 17 Council meeting recognized the Finance and Procurement Division, approved the short-term power purchase agreement with Tenaska Power Services, and approved broadband bonds 7-0.
• The Environmental Sustainability Board liaison report was not given because both liaisons were out of town.
• Member Jennifer Hollingsworth volunteered for the County Audit Committee and was appointed by Chair Gibson for the remainder of calendar year 2026. The draft minutes state calendar year 2025, but the agenda and staff report say 2026, an apparent typo.
• Board expenses were none.

Status Reports and Upcoming Agenda

• The board reviewed the January status reports covering Electric Reliability, Accounts Receivables, and Risk and Safety with no comments.
• For the March-June tickler, the board removed the UAMPS presentation from March 4, delayed the Final EV Plan to the April regular meeting, discussed removing the broadband briefing, and adjusted utilities manager performance review timing because of member travel. The agenda-setting meeting is planned for Friday, February 27, 2026.

Key Outcomes

• Agenda approved as amended 4-0, moving budget revision item 4.b from the consent agenda to Department Business.
• Consent agenda approved 4-0, containing only the January 2026 minutes.
• Task Order No. 4 with Souder Miller & Associates and Budget Revision 2026-41 approved and forwarded to Council.
• FY2027 budget presentation received; no action taken; final budget presentation expected in March.
• Task Order No. 3 with Sanbros Corp. approved for the White Rock Substation transformer preparation project.
• Member Hollingsworth appointed to the County Audit Committee for 2026.
• Roll-call results in the draft minutes sometimes list Member Nakhleh as voting yes despite his absence; the votes are recorded as 4-0 in the transcript.