In attempting to create a balanced budget for fiscal year 2021 hampered by a crash in oil prices and a worldwide pandemic, the city of Roswell will look to recover costs on some of the services it provides to the public. That could mean big changes for the zoo, museum and art center, and the golf course.
The topic of cost recovery took up the bulk of City Manager Joe Neeb’s presentation to the Roswell City Council in a budget workshop Tuesday afternoon as he outlined how the city will cut more than $31 million in expenses for next fiscal year’s budget.
The meeting was for information only and the council took no action. The Finance Committee will review the budget at Thursday’s meeting as a non-action item and then at the July 2 meeting will consider any amendments and vote to present to the whole council.
The City Council will then address any amendments at its July 9 meeting. A special meeting is tentatively scheduled for July 23 for final approval.
“Why we are looking at cost recovery at all is because we have less revenue,” Neeb said.
With an expected 23% reduction in gross receipts tax from the combination of the oil industry crash and state health orders requiring many businesses to close their doors in response to the coronavirus, the city is reducing its expenses by $31,158,788 from the 2020 budget.
GRT comprises 62% of the general fund revenue, Neeb said.
“We’ve jumped from $33 to $35 million. We found once we put all the numbers together, the overall impact will be about a $31 million reduction in our expenses to balance this budget,” he said.
Overall, a 50-50 cost recovery will be presented to the City Council by city staff, but for individual services, cost recovery could range from zero to 160%, Neeb said.
“There are certain services that we should charge more for so that we can give other services away for less,” Neeb said.
Services or events that benefit the community as a whole — such as open swim at the pool or the Fourth of July celebration — will see zero cost recovery, while those that are more individualized — such as team swimming or adult team sports — will be expected to obtain closer to 100% or higher cost recovery, he said.
Among those on the higher end will be some of the quality of life offerings by the city — the Spring River Zoo, the Roswell Museum and Art Center, and the Nancy Lopez Golf Course at Spring River. Each will be expected to generate 70% of its own revenue within a year, Neeb said.
“These services are very important for the quality of life of the city, but they also have the ability to generate their own funds. Outside of the golf course, there’s no use fee for the zoo or a use fee for the museum,” he said.
“I don’t know how we’re going to get there other than I want to set the goal for that level so they have something to attain to and something to look for,” he said.
Councilor Barry Foster said that goal might be difficult for the zoo and museum, but he would present his ideas at future meetings.
For 2020, he said, the museum was budgeted at 18.85% cost recovery and the zoo at 2%. The golf course, which offers memberships and charges fees, was budgeted at 63.3% cost recovery.
“For the golf course to get to 70% is a minor step it looks like,” Foster said. “But trying to get the zoo from 2% to 70%, that’s going to be a major step. I think it’s doable. One of the things I’ll eventually be talking about at our meetings would maybe be stepping it,” he said.
Those three entities have had their accounts moved out of the general fund into special revenue accounts, Neeb said, which will help them generate more revenue.
“(Out of) every dollar that gets created by a business in the general fund, 66 cents goes to public safety,” Neeb said. “So we said, let’s set these accounts as their own, that way their user fees go directly to their operations. We’ll let police and fire use the property tax and the gross receipts tax within the general fund.”
Neeb said the city is not trying to shut down those three entities, but trying to make them more self-sufficient.
“We are not trying to close down any one of these services. We’re trying to make them operate differently. We believe they have a big opportunity that they can succeed with,” he said.
Whether or not they succeed will be largely up to the public, he said.
“If the community truly believes in that service, the community will support it. I believe that firmly it is not our job as a City Council and the city of Roswell to make things happen that maybe the community doesn’t feel is most appropriate,” he said.
City councilors offered praise to Neeb and his staff on putting together the budget.
Councilor Jeanine Best, who at the May 14 City Council meeting suggested the city temporarily close the zoo and museum and charge fees for other services such as the public library until the economy recovers, said she was “blown away” by the budget.
“The citizens of Roswell seem to want Roswell to change. We have an opportunity. Reorganizing the city in this manner means we can move forward and the citizens can be proud of their city again,” she said.
Foster said the 2021 budget gives the city something it’s been lacking.
“We’ve finally got a plan. In the eight years I’ve been on the council, we get a budget, there’s no plan,” he said.
“I do like the fact we have a reasoning why we’re at these funding levels. We have a reasoning why we’re doing these things. This goes through and it shows why we value things and gives us a way to explain it to people,” Foster said.
The city’s preliminary budget is available to view at roswell-nm.gov/DocumentCenter/View/8495/2-FY21-Budget-Book-Prelim-Print.
To keep up with local coverage of the coronavirus, go to rdrnews.com/category/news/covid-19-situation/.
City/RISD reporter Juno Ogle can be reached at 575-622-7710, ext. 205, or firstname.lastname@example.org.