Home News Local News Strong construction sector boosts county numbers

Strong construction sector boosts county numbers

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Construction activity in the area has remained steady in recent months with many public and private projects underway, including this residential subdivision expansion on North Union Avenue near West 19th Street. (Lisa Dunlap Photo)

One business sector in Chaves County has been strong in recent months in spite of the pandemic, and that is the construction industry.

“What really saved us, and that’s why we are up (in reported gross receipts tax), is construction,” said Joe Sedillo, Chaves County chief financial officer.

He released information this week that indicated the gross receipts reported for construction activity in the area for April 2020 was $24.27 million.

That’s $10.27 million more than the $13.99 million in gross receipts reported for April 2019 construction activity.

If it had not been for the contribution of the construction sector, total GRT receipts for economic activity in the county would have been down $5.8 million compared to April 2019. As it stood, total receipts were up by more than $4.4 million and totaled $113.74 million in April 2020, compared to $109.11 million in April 2019.

Another significant increase in business activity occurred in the category of professional, scientific and technical services, which Sedillo attributed to the legal and accounting professions. Receipts went up $3.09 million compared to last year, to total $8.77 million for April 2020.

As a result of the local economic activity for April 2020, the county is due to receive $1.17 million in gross receipts taxes in June. That compares to $1.04 million received in June 2019.

For the entire fiscal year of 2019-20, gross receipts taxes paid to the county are $14.26 million, $1.74 million more than the $12.52 million the county received in fiscal year 2018-19. That’s a 13.92% increase. The county also received $1.26 million during the current fiscal year in Hold Harmless payments, or payments made to counties to make up for taxes not charged for certain items or services.

Sedillo said he attributed the unexpectedly good activity in the construction sector to several significant public and private projects underway in recent months.

Private projects include new residential construction, home improvements and work just completed on the new Dion’s restaurant on South Main Street, as well as ongoing construction of a new Blake’s restaurant on North Main Street.

School districts and educational institutions are among the public entities with numerous projects. Eastern New Mexico University-Roswell has demolished some of its unused, older dormitories, and is preparing for work on building renovations and additions. The New Mexico Military Institute is working on two major building renovations and upgrades to its lighting and electrical systems across campus. Sidney Gutierrez Middle School is preparing a site to add modular classrooms for elementary expansion, and the Roswell Independent School District is building a new structure for Del Norte Elementary School and has prepared a site for a modular building at Parkview Early Literacy Center.

The Roswell school district also plans to start construction for the renovation of Mesa Middle School in November, said Chad Cole, assistant superintendent of Finance and Operations.

“We need to encourage everybody to keep those projects going, particularly over the next years,” Cole said. “Particularly with the COVID shutdowns and things like that (such as the oil and gas slowdown), the more construction we can get up and running and continuous over the next couple of years, it draws in the gross receipts taxes for the city and the county and it gives our people jobs.”

He added that public entities strive to work with local contractors as much as possible, and that school district funding, while not impervious to possible state clawbacks to deal with budget deficits, are funded in large part by previously approved general obligation bonds.

The city of Roswell is working on two new water towers at the Roswell Air Center, as well as several road, water line and zoo projects. Plans also have been announced to use state funding from prior years for a new Carpenter Park splash pad.

Chaves County recently completed an addition to Fire Station No. 4 for the Berrendo Volunteer Fire Department and will start the Chaves County Courthouse elevator construction within days, said Public Services Director Bill Williams. A drainage project involving a retention pond on Hobbs Road also is due to start soon, and the county will do the work itself for an internal expansion of Area D of the Chaves County Administrative Center.

One local member of the construction industry, Jana Lessard, project manager with J & H Services Inc., said that her perception is that the architectural industry is doing very well, but that the construction industry has seen some decline recently.

“I think it has dropped a little bit just simply because of the COVID issue and the drop in the oilfield market, which has affected our budget here in the state,” she said. “It is strong still. I think Chaves County remains steady, but there has been a drop in Lea and Eddy counties definitely because of the drop in oil and gas activity.”

She added that work for governmental entities does tend to increase around this time of the year as public agencies strive to wrap up their fiscal years by the end of June.

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