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Long-term bond to fund rec center and pool passes; City Council approves $23 million bond by supermajority vote

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The Roswell City Council and Mayor Dennis Kintigh listen to a bond presentation Thursday night. The City Council approved a $23 million bond to pay for a new recreation center and aquatics facility at Cielo Grande Recreation Area, one of the final steps for the recreational complex. Pictured, from left, are City Councilor Caleb Grant and Kintigh. (Jeff Tucker Photo)

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By the minimal votes necessary, the Roswell City Council on Thursday night approved a $23 million bond to pay for a new recreation center and aquatics facility at Cielo Grande Recreation Area.

Roswell city manager Joe Neeb speaks to Mayor Dennis Kintigh and the City Council Thursday night about a $23 million bond to pay for a new recreation center and aquatics facility at Cielo Grande Recreation Area. The City Council approved one of the final steps for the recreational complex, passing the bond by a supermajority vote. (Jeff Tucker Photo)

Votes on bonds, by state law, require supermajority votes for adoption, explained city clerk Sharon Coll, because the bond payments indebt future city governing bodies. Eight votes from the 10 city councilors are needed to adopt a bond, regardless of the number of city councilors that attend a meeting.
“If we do not have a bond, we do not have a rec center and pool and our children will suffer, is that correct?” asked City Councilor Jeanine Corn Best.
“That is correct,” replied city manager Joe Neeb.
The City Council met the minimal threshold Thursday when it voted 8-1 to approve Ordinance 17-17, which authorizes the issuance of up to $23 million of gross receipts tax improvement revenue bonds to fund the recreation and aquatics center, which were approved by the City Council in February. City Councilor Juan Oropesa cast the dissenting vote. City Councilor Tabitha Denny and Steve Henderson voted via a conference call. City Councilor Natasha Mackey was not present Thursday night by telephone or in person.
The bond sale is projected to generate $20 million of net proceeds to construct the new recreation center and aquatics facility.
The estimated interest rate on the bonds is 3.42 percent, said Erik Harrigan of RBC Capital Markets, the city’s financial consultant. Harrigan said he did not expect the bonds, to be repaid by local sales tax increases, would affect the city’s credit rating.
“We anticipate that we would be selling either on the 9th or the 10th of August and then provide those results to the council at that time,” Harrigan said.

Amended tax increase
The City Council on Thursday night also approved an amended version of the ordinance adopted by the City Council in February that will increase sales taxes to pay for the recreation center and aquatics facility that is estimated to cost $20 million to build, and another $3 million in interest and fees.
At a Feb. 9 meeting, the City Council voted 8-2 in favor of three separate increases in gross receipts taxes to fund the recreational facilities, with Oropesa and City Councilor Steve Henderson casting the “nay” votes.
One of the ordinances imposes a one-eighth of 1 percent municipal gross receipts tax, or 0.125 percent, dedicated to general municipal purposes.
Another ordinance imposes a one-sixteenth of 1 percent municipal infrastructure gross receipts tax, or 0.0625 percent, also dedicated to general municipal purposes. Those two tax increases are projected to generate about $1,576,000 based on recent tax collections.
The third proposed ordinance imposes a one-sixteenth of 1 percent municipal environmental services gross receipts tax. However, the language of the municipal environmental services gross receipts tax ordinance approved in February did not meet the guidelines of the New Mexico Department Taxation & Revenue Department, and had to be re-written, said city attorney Aaron Holloman. The amended ordinance changes the language of the dedication of revenues to conform with state statute, and replaces the word “infrastructure” with “environmental services,” Holloman said.
“This is the process that TRD has asked us to undergo, and these are changes that they have asked us to make,” Holloman said. “The tax does remain the same. This is just a change to the language of the ordinance.”
The City Council voted 8-1 Thursday night to approve the amended ordinance, with Oropesa casting the dissenting vote.
The delay in imposing the third tax increase means two of the sales tax increases approved in February took effect July 1, while the amended sales tax ordinance approved Thursday night will not take effect until Jan. 1. The city expects to receive initial revenues from the July 1 tax increases in September.
The three tax increases will collectively raise gross receipts tax rates in the city from 7.5 percent to 7.75 percent, or 25 cents for every $100 of goods and services purchased that are subject to gross receipt taxes. The three tax increases are each slated to retire after 20 years.

Public hearings
No one spoke for or against the bond issuance during a public hearing Thursday night, or for or against the amended tax increase ordinance, in an anti-climatic ending to more than a year contentious debate regarding the new recreation center and aquatics center being built to replace the closed Yucca Recreation Center and Cahoon Park Pool.
The new single-story recreation center, which will include a multipurpose room, a group fitness room and two full-size gyms that can be accommodate indoor soccer or be subdivided by into four smaller basketball courts, will replace the Yucca Recreation Center, which was closed by the city on Dec. 24, 2015, due to flooding and other problems with that historic structure built in 1911 and renovated in 1940 and 1972.
The aquatics facility, also on pace to open in the fall of September 2018, will include an eight-lane indoor pool of 25-yard long lanes and seating for about 200 people, an outdoor large open swim area with a large tube slide, and an outdoor toddler section with shaded structures. It will replace the Cahoon pool, built in 1938, which the City Council decommissioned in April 2016.
Oropesa and others have urged the city to forgo building an outdoor pool at Cielo Grande Recreation Area and instead reopen Cahoon Park Pool. Oropesa and Henderson have also said they would have preferred a general obligation bond paid by property taxes and placed on ballots for voters to decide, as opposed to increasing local sales taxes, to fund the new recreational complex.
Interim editor Jeff Tucker may be contacted at 575-622-7710, ext. 303, or at editor@rdrnews.com.

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