City Council approves $147 million budget; Spending plan funds new recreation center, convention center expansion and water meter replacements
The Roswell City Council on Tuesday afternoon unanimously approved a $146.5 million spending plan for the city, a budget amount nearly large enough to match Jerry Jones’ purchase of the Dallas Cowboys for $150 million in 1989.
The $146,493,825 budget for the 2017-18 fiscal year is a significant increase from the city’s 2016-17 budget of $117 million, in large part due to several projects underway, including a $23 million recreation center, a $21 million citywide water meter replacement project and $7 million convention center expansion.
Funding for the projects will be paid by revenues from bond sales, but the capital projects are nevertheless included in the city’s annual budget, explained city Finance Director Monica Garcia.
City Manager Joe Neeb noted $68.7 million of the $146,493,825 budget are allocated for capital projects, $40.1 million for personnel costs and $37.6 million for operating expenses.
“Personnel is our best asset, but they’re the most expensive asset we have as well,” Neeb said.
City revenues are being boosted by two new sales taxes that went into effect July 1, and a third new sales tax that will go into effect in January.
The budget also increases the city’s reserves by $1.7 million, with an estimated cash balance of $18.6 million at the end of the fiscal year on June 30, 2018. New Mexico governmental entities are required under state law to maintain a cash balance of one-twelfth of their annual spending.
City staff said the goals for the 2018 budget were to produce a balanced budget, to continue with increasing reserves, to continue with infrastructure projects, to maintain current levels of service, to prepare a plan to audit departments and to formulate a policy to establish a sustainable budget process.
The city’s final budget must be submitted to the New Mexico Department of Finance & Administration by July 31. The city’s 2017-18 fiscal year began July 1. The city’s preliminary budget had to be submitted to the DFA by June 1. The preliminary budget is primarily constituted with operating expenses, and did not include savings from the prior fiscal year. Neeb explained that funds allocated to various departments, but not spent, roll over into the next fiscal year’s budget.
Previously approved capital projects, like the new recreation center and aquatics facility at Cielo Grande Recreation Area and the new water meters, are carried forward from year to year. The city has begun the process to replace the city’s 19,000 existing mechanical water meters with wireless meters, which transmit data from the meter to towers and then to city utility offices.
Consultants say the “smart meters” make leak detection, customer service and billing more efficient. City staff estimates the installation of the smart meters could save the city $1.7 million annually by more accurately gauging water and sewer usage, $1.2 million in increased billings and $536,530 a year in savings on maintenance and operations.
The new budget also funds 3 percent step increases for city employees, while most new and amended positions are on hold, pending further review. The city’s 2016-17 budget of $117,066,086 included no pay raises for city employees, but these were ultimately funded for the city’s unionized employees after the unions lodged complaints. The city’s 2015-16 budget included 1.5 percent cost-of-living pay raises for all city personnel.
The new budget commits $1.2 million of general fund revenues for street improvements and repairs.
“Which, I tell you, is woefully inadequate,” Mayor Dennis Kintigh told the newspaper. “We need to spend more money on our streets and roads, but we don’t have it. They need serious work, but we do not have the funding in our general fund.”
Capital budget improvements, funded by a mix of city, state and federal funding, include $1.5 million to repave South Atkinson Avenue, $650,000 for sidewalk repairs and aerial photogrammetry, $2,275,000 for solid waste improvements, $150,000 for City Hall and City Annex building improvements, $1.2 million for a water line replacement along Country Club Road, $1 million to rehabilitate the water tank on West Country Club Road, and $13,345,000 for the water meter replacement project.
“We have a lot of broken stuff that we have to fix,” Kintigh said. “And we’re doing it. We’ve come up with funding sources that are needed for our desperately needed capital improvements. We’re finishing things that have been broken for way too long, or we are replacing them.”
With the two new tax increases imposed July 1, the city’s gross receipts tax rate will increase from 7.5 percent to 7.6875 percent. When the additional sales tax is implemented Jan. 1, the city’s GRT rate will increase to 7.75 percent.
The three tax increases, which will increase GRTs 25 cents for every $100 of goods and services, will collectively generate an estimated $2,773,244 more annually for the city. The three GRT increases are slated to retire in 20 years and are earmarked to fund the $23 million recreation center and aquatics facility at Cielo Grande Recreation Area.
The $21 million of revenue bonds for new water meters must be solely paid out of net revenues from the operation of the city’s water and sewer system. Annual bond payments, reaching $1.3 million annually, will conclude in June 2037.
The $7 million project to expand the Roswell Convention & Civic Center by 15,000-square-foot to the north will be paid by a $2.50 convention center tax the city levied in November 2013. The $2.50 “convention center fee” for every daily hotel/motel room rental in the city is separate from the city’s 5 percent lodgers tax imposed at city hotels and motels. Convention center fee revenues must, by state law, be used for improvements to a convention center, while lodgers taxes must be used to promote tourism and conventions.
The city’s final budget of $110,544,316 in 2014-15 was the city’s first-ever nine-figure budget and a 21.68 percent increase over the city’s $90,674,116 final budget in the 2013-14 fiscal year.
Interim editor Jeff Tucker can be reached at 575-622-7710, ext. 303, or at firstname.lastname@example.org.