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City studying coronavirus budget impacts

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City of Roswell managers are starting the process of determining how the coronavirus crisis will affect its revenues so that it can make decisions about necessary budget changes or cuts.

City Manager Joe Neeb said at a Tuesday morning meeting that the city is developing projections to guide decisions about spending.

“Our aim will be within two weeks to get some information out there,” Neeb said. “We have been working for the last two weeks on what we anticipate will happen. The challenge we have with this is it that it is a moving target right now.”

He said exact numbers for a major source of revenue — gross receipts taxes — will not be known until July. But city staff are using what information it has on GRT, convention center fees, bed fees and lodgers’ taxes, as well as data the New Mexico Taxation and Revenue Department is collecting, to start making projections.

“In two weeks we should have at least our expectations so that we can deliver that information with options to the next series of committee meetings,” Neeb said. “That is when we will see how we are going to restrict our budgets for now and then get ready for whatever July and August (brings). We also know that once the economy hits that low level, it will take a little bit of time for it to get back up. We don’t know what that picture is. We just want to get as close as we can so then we can carve with a surgical knife and not a machete.”

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He did say that the city will postpone funding and providing city services to any community events until the UFO Festival during the early part of July.

“We believe as of July 1, because we are going into a new budget cycle, too, that is our ‘grand reopening,’ That is our hope,” he said.

He added that the situation could change in coming weeks. While the Trump Administration has extended its social distancing recommendations until April 30, Neeb said that information from the New Mexico Governor’s Office indicates that this state might not hit the “top end of the bell curve” regarding projected coronavirus infections until around that time.

In addition to the impacts due to the coronavirus, Roswell also will experience the effects of the downturn in the oil and gas industry. The 50% drop in oil prices since the start of the year has led many companies to pull out of or significantly reduce their operations in the Permian Basin. That will affect not only on oil and gas-related businesses located in Roswell but statewide revenues and budgets.

State tourism impacts

Roswell already is aware of one major hit to its tourism activity. PS Sports of Michigan and its local organizers announced Saturday that one of the city’s four “signature” annual events — the Hike It and Spike It charity flag football tournament held each year on Memorial Day weekend — will be postponed until 2021. The tournament generates about $4 million in direct economic impact, bringing more than 500 teams from 30 states for a weekend.

The combined Cinco de Mayo and Rise over Roswell Balloon Rally, another of the four signature events, occurs in early May. It is organized by the Roswell Chamber of Commerce, which recently announced its decision to end its business contract with the city. The chamber did not respond by press time to phone or email messages asking about the status of the event. No announcements concerning Cinco de Mayo were posted on its website or Facebook page, either.

Determining exactly how the coronavirus is affecting the statewide tourism industry is the focus of a new effort by the New Mexico Tourism Department.

The department has asked tourism industry businesses and organizations to report to it on a weekly basis throughout the current emergency about the effects they are experiencing.

“We are looking to collect as much information from as many destinations throughout New Mexico as possible,” said Cody Johnson, public information officer for the state Tourism Department.

He said that the information will be used to develop assistance programs to help businesses recover once social and business restrictions are lifted.

The department issued a notification Monday to local tourism officials and other partners of the effort to track revenues, demand, employment and additional business variables for nine industry sectors: destination marketing organizations; hotels, resorts and lodging; restaurants; retail and galleries; events and event planners; attractions and cultural institutions; meetings and conferences; airports and transportation; and tour operators.

Forms for reporting information are available to businesses and agencies that have signed up as industry partners on the department’s website, www.newmexico.org.

According to the department’s most recent annual report, tourism had a $9.93 billion direct economic impact in the state in 2018 and employed 94,601 people directly and indirectly. That represented about 8.5% of the state’s jobs.

“The New Mexico Tourism Department is doing the best it can to work with the industry to evaluate solutions and strategies to assist the industry right now and in the long-term,” Johnson said.

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.

 

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Lisa Dunlap is a general assignment reporter for the Roswell Daily Record.