Finance Committee

Regular Meeting of the Finance Committee City Hall – Large Conference Room 425 N. Richardson Thursday, November 2, 2023, at 2:00 PM Notice of this meeting was given to the public in compliance with Sections 10-15-1 through 10-15-4 NMSA 1978 and Resolution 23-40. ROLL CALL The meeting convened at 2:00 p.m. with Chairman Corn presiding, Councilor Heldenbrand present, with Councilor Foster being absent. Staff present Ernest Alford, Jim Burress, Abraham Chaparro, Chad Cole, Janie Davies, Toni Gomez, Jennifer Griego, Juanita Jennings, Mike Mathews, Louis Najar, Jenna Lanfor, Debbie Reyer, Tammi Smith, Todd Wildermuth (via GoToMeeting), and Hess Yntema. Guests present Bruce Andler (via GoToMeeting), Vicki Burress (via GoToMeeting), Will Cavin, Nathan Curnutt, Rita Kane Doerhoefer, Terri Harber, and Justin King. APPROVAL OF AGENDA Councilor Heldenbrand moved to approve the agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, with Councilor Foster being absent. ACTION ITEMS 1. Consider recommending approval of award recommendation for RFP-24-005 Utility Statement Processing and Mailing services and authorization for the City Manager to enter into contract with Postal Pros. Presented by Ernest Alford; the City of Roswell posted RFP-24-005 Utility Statement Processing and Mailing Services on September 10, 2023. Four proposals were received on October 10, 2023. The Evaluation Committee completed their review and it is their recommendation to award this contract to Postal Pros Southwest. Funding will be provided by Water Billing’s annual approved budget. Councilor Heldenbrand asked if this will stay in the current budgeted amount. Ernest stated this does stay in the current budgeted amount and no budget adjustment will be required. Postal Pros did come in with the lowest bid and is our current vendor for the Utility Statement Processing and Mailing Services. Councilor Heldenbrand made a motion to recommend the approval of award recommendation for RFP-24- 005 Utility Statement Processing and Mailing Services and authorization for the City Manager to enter into a contract with Postal Pros to be place on the consent agenda. Chairman Corn seconded the motion.  The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 2. Consider recommending Carl Day to enter a one-year lease agreement for T-Hanger 120-5 located at the Roswell Air Center. Presented by Jenna Lanfor; Carl Day requests to enter a one-year lease for T-Hanger 120-5 consisting of 1,002 square feet, more or less, located at the Roswell Air Center, commencing on December 1, 2023 and ending November 30, 2024, for the purpose of storing and maintaining a privately owned aircraft. Tenant agrees to pay to Landlord as rent the sum of $2,580.12 annual, payable in 12 monthly installments of $215.01; $2.57 psf. (this was an increase of 3%). Councilor Heldenbrand made a motion recommending Carl Day to enter a one-year lease agreement for T-Hanger 120-5 located at the Roswell Air Center to be placed on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 3. Consider recommending Almond Painting Inc. to enter a five-year lease agreement, for Building 1049 located at the Roswell Air Center. Presented by Jenna Lanfor; Almond Painting, Inc. requests to enter a five-year lease for building 1049 consisting of 2,500 square feet, more or less, located at the Roswell Air Center, commencing on November 1, 2023 and ending October 31, 2028, for the purpose of operating a paint shop. Tenant agrees to pay to Landlord as rent the sum of $5,625.00 annual, payable in 12 monthly installments of $468.75 for the first year of the lease. Each year thereafter, rent will be increased by 3.0% or the latest 12-month percentage change in CPI-U, (Consumer Price Index-U, and U.S. City Average) whichever is greater; $2.25 psf. (Increased 93%) Current lease $1.14 psf. Chairman Corn asked how long Almond Painting Inc. has been a tenant at the Roswell Air Center. Jenna responded that they had a five-year lease before this, and Jennifer said they were here when she was here before. They both agreed that Almond Painting Inc. is a good tenant. Councilor Heldenbrand made a motion recommending Almond Painting Inc to enter a five-year lease agreement for Building 1049 located at the Roswell Air Center to be place on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 4. Consider recommending Summit Food Services request for one-year renewal. This is the second one-year renewal of seven. Presented by Jenna Lanfor; Summit requests to enter the second one-year renewal of seven for building 1 (terminal) consisting of 1,685 square feet, more or less, located at the Roswell Air Center, commencing on December 1, 2023 and ending November 30, 2024, for the purpose of operating a bar and grill. Tenant agrees to perform the services described in  Exhibit B at the premises and to pay to Landlord Commissions in the sum of four percent of net sales each month of the lease for the first year. Year 2 six percent, year 3 eight percent, and years 4 to 7 ten percent. Net sales shall be defined as gross sales minus applicable sales tax. Summit shall provide a monthly operating statement, to the Landlord, which shall detail the revenue based on the operation. Commission payment shall be due within thirty days of issuance of the operating statement. Councilor Heldenbrand asked what are their current sales? Jenna said they started out with about $1,200 in monthly sales and are up to $8,700 a month. Councilor Heldenbrand also verified this does not include the liquor license they are leasing from the City of Roswell. Jenna verified that the liquor license is a separate lease and we receive $500 a month currently and will increase in the future. Councilor Heldenbrand made a motion recommending Summit Food Services request for a one-year renewal with this being the second yearly renewal of to be placed on the consent agenda. Chariman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 5. Consider recommending Trans Aero Limited to enter a one-year lease agreement, with four, one-year renewal option for Building 1166 located at the Roswell Air Center.Trans Aero requests termination of exisiting land lease dated March 3, 2023 upon execution of the new lease. Presented by Jenna Lanfor: Trans Aero Limited requests to enter a one-year lease, with four, one-year renewal option for Building 1166 consisting of 18,424 square feet, more or less, located at the Roswell Air Center, commencing on December 1, 2023 and ending November 30, 2024, for the purpose of medivac personnel living quarters, training and services. Tenant agrees to pay to Landlord as rent the sum $73,696.00 payable in 12 monthly installments of $6,141.33 the first year of the lease. Each year thereafter, rent increases by 3.0% or the latest 12-month percentage change in CPI-U, (Consumer Price Index-U, and U.S. City Average) whichever is greater. Exhibit C provides the scope of work and dollar amount accepted as the Landlord approved improvements to the kitchen and will be applied as monthly rent payments up to the dollar amount $27,736.80 (total minus sales tax) in the scope of work. Once the $27,736.80 is exhausted, regular monthly rent payments will continue to be made by tenant. Councilor Heldenbrand asked what the rent was prior for this building. Jenna and Hess explained it was about $6,000 a month and they had the whole building and the property the building is located on. Trans Aero is not currently in the building. Councilor Heldenbrand made a motion for the recommendation to enter into a one- year lease agreement with four one-year lease commencing on December 1, 2023 and ending November 30, 2024 along with the termination of the existing land lease to be placed on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 6. Consider approval to allocate $134,625.44 to hire WWRC (State Purchasing Agreement) using Contract Number 30-00000-23-00051 roof services to replace roof at building 610. Presented by Jenna Lanfor; As a result of wind damage on 02/26/2023 building 610 requires a roof replacement. WWRC is an approved contractor for ITB Statewide Price Agreement and has submitted a proposal and Insurance Company has accepted. State Wage Agreements will be requested upon approval of the PO. PO will require NOI for State Wages, and Bond(s) per the ITB. Funding for this project is included in the ROW budget cash balance utilizing GL Code 51004332 614002. Councilor Heldenbrand asked if a budget adjustment would be needed. Janie said they are using the cash balance so a budget adjustment would be needed. Jenna stated this is a 100% reimbursable. Councilor Heldenbrand made a motion to recommend approval to allocate $134,625.44 to hire WWRC using Contract Number 30-00000-23-00051 roof services to replace roof at building 610 to be placed on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 7. Resolution 23-XX - Consider approval of Resolution 23-XX approving budget adjustment for fiscal year ending June 30, 2024. Presented by Toni Gomez; the New Mexico Department of Finance Administration (DFA), requires approval of a budget adjustment when increasing a revenue and/or expense in the approved budget. The Finance Department is requesting a budget adjustment for line items in Exhibit “A”. These adjustments are for various grants and other departmental adjustments. Various Funds: Revenues $425,000.00, Expenses $431,290.00. Councilor Heldenbrand made a motion for the consideration of approval of Resolution 23-XX approving budget adjustment for fiscal year ending June 30, 2024 to be place on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 8. Consider approval for the Professional Services Agreement with Mead & Hunt for the RAC Strategic Plan as well as approve the purchase order for this should this item pass. Presented by Jennifer Griego; RFP was advertised seeking a qualified consultant with experience, focus, vision, and goals to assist in developing a strategic plan. Mead & Hunt's proposal was reviewed and selected as the most qualified consultant to perform the Strategic Plan. The proposal totaled $233,000 which includes GRT with a State Aviation Grant of 90/10. This is budgeted in FY24 Capital Funds budget. Councilor Heldenbrand asked if this had been started and how long it would take to complete. Jennifer said it has not been started and it will take 8 months to complete. Councilor Heldenbrand made a motion for the consideration of approval for the  Professional Services Agreement with Mead & Hunt for the RAC Strategic Plan as well as approve the purchase order to be placed on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 9. Consider approval to contract with ADB Safegate for the airfield lighting system maintenance at the Roswell Air Center as well as approve the purchase order for this should this item pass. Presented by Jennifer Griego; ADB Safegate is offering a two-phase maintenance approach. The first phase will focus on resolving the immediate fix to airfield lighting /maintenance items. Second phase will focus on ongoing maintenance items. ADB will provide a Service Engineer on site for two weeks per month in year one; in years 2 and 3 the Service Engineer will be on site one week per month. ADB will utilize a Sourcewell Contract #110122, which expires January 13, 2027. Year 1 - $180,000 and $200,000 for parts was approved in FY-24 Budget, $90,350 for years 2 and 3. Already in the FY24 Capital budget which includes 90/10 State Aviation Grant. Councilor Heldenbrand made a motion for the consideration of approval to contract with ADB Safegate for the airfield lighting system maintenance at the Roswell Air Center as well as the purchase order to be placed on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 10. Consider approval of Task Order M to Armstrong Consultants for Scope of Work and Design of a loading area pit for slurry at the Roswell Air Center as well as approve the purchase order for this item should this item pass. Presented by Jennifer Griego; BLM would like the ability to load up to two slurry aircraft at the same time during fire season. This would allow for a quicker turn of the aircraft. Armstrong Consultants has experience in designing loading pits. $96,610 which includes NMGRT. BLM has allocated $300,000 within the lease for 100% reimbursement. Currently budgeted in FY24 Capital budget. Councilor Heldenbrand made a motion for the consideration of approval of Task Order M to Armstrong Consultants for Scope of Work and Design of loading area pit for slurry at the Roswell Air Center as well as the purchase to be placed on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 11. Consider approval for Task Order L to Armstrong Consultants for Scope of Work and Design of the BLM taxilane as well as approve the purchase order for this should this item pass. Presented by Jennifer Griego; State Legislature appropriated $5.5 Million for the BLM Firefighting Taxilane. BLM utilizes a portion of the ramp on the northeast side of the airport. The congestion in this area between the slurry tankers  and other tenants can be time consuming to fill the tankers and get them turned 180 degrees to get to the runway. The new taxilane will allow for a pull-thru type of slurry loading allowing for quicker entering and existing the area. The design is estimated at $727,263, which includes NMGRT, with a 100% reimbursable State Aviation Grant, and budgeted in the FY24 Capital budget. Councilor Heldenbrand voiced a concern on the construction coming in over budget, and asked if this would be completed before next fire season. Jennifer said this would not be completed by next fire season. Councilor Heldenbrand made a motion for the consideration of approval for Task Order L to Armstrong Consultants for Scope of Work and Design of the BLM taxilane as well as approve the purchase order to be placed on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 12. Consider approval of the purchase of an Air Sweeper from Tymco through the State Price Agreement, for the Roswell Air Center as well as approve the purchase order for this should this item pass. Presented by Jennifer Griego; seeking approval for the purchase of an Air Sweeper for RAC. Model 2024 is $314,255 if it's still in stock otherwise, Model 2025 is $327,755. Model 2024 is $314,255 if in stock, otherwise, Model 2025 is $327,755. $325,000 is budgeted in FY24 Capital budget which is a 90/10 State Aviation grant. Councilor Heldenbrand made a motion for the recommendation of approval of the purchase of an Air Sweeper from Tymco through the State Price Agreement, for the Roswell Air Center for the Model 2024 for $314,255 if available, if not available the Model 2025 for $327,755 as well as approve the purchase order to be place on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. 13. Requesting a budget amendment to split the $650,000 City of Roswell Safe Streets For All Comprehensive Grant between FY24 ($450,000) & FY25 ($200,000). Current financial structure for FY24 was $350,000 and FY24 $300,000. Presented by Louis Najar; the City received a Safe Streets for All grant award from Federal Highway Administration for the completion of a Comprehensive Safety Action Plan. City issued RFP 24-003 to solicit proposals to complete the Plan. Five proposals were received in response to the RFP. The five proposals were rated by committee and Freese and Nichols was selected as the best option for completing the Plan. Once the plan is completed, City will be able to apply for further grant funding for transportation safety and equity enhancements. Recommended award of RFP 24- 003 is to Freese and Nichols Inc (FNI) in the amount of $500,000 plus GRT of $37,916.50 for a total of $537,916.50 for the City of Roswell Safe Streets for All Comprehensive Safety Action Plan. FNI proposal states six-month project completion time. This puts the majority of cost within FY24 budget. This project is on current FY24 Budget for partial grant only. Total budget is $650,000. This includes  $520,000 grant from Federal Highway Administration and a $130,000 City match. Due to proposed schedule a budget adjustment is being requested as per this abstract. Councilor Heldenbrand made a motion for the recommendation of approval for budget amendment to split the $650,000 City of Roswell Safe Streets For All Comprehensive grant between FY24 ($450,000) and FY25 ($200,000) to be placed on the consent agenda. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, and Councilor Foster being absent. APPROVAL OF MINUTES 14. Minutes for October 5, 2023 Regular Meeting Councilor Heldenbrand moved to approve the October 5th regular meeting minutes. Chairman Corn seconded the motion. The motion passed with a 2-0 voice vote, with Councilor Foster being absent. NON-ACTION ITEMS 15. Information Departmental Reports – Finance Presented by Janie Davies  GRT – The City of Roswell received $4,187,623 in October and are 15.87% over budget for the fiscal year. Councilor Heldenbrand brought up the point that in the prior year we were over budgeted as well but had no surplus in funds at the end of the year. The increase in personnel expenses (46% over a 10-year period) has increased more than the increase seen in GRT. Janie added that this budget is a positive ending cash budget and is probably not realistic. With the added personnel costs, the carry over of projects, and grants not getting reimbursed in the fiscal year the expense was recognized the City is looking at a cash flow problem. We can’t submit a quarterly or yearly report to DFA with a negative cash balance. Chad added the City might have to look at refusing grants because the City can’t afford the match if the City can’t get budgeting under control. Councilor Heldenbrand asked Janie if we had our excess funds sitting in money markets. Janie explained that we do have investments but that quite a bit of the funds are sitting at Pioneer Bank. Morton Capital has a money market that is currently paying around 5.5%. Pioneer Bank will not raise our rates because we are not under contract with them. The City is looking at issuing an RFP for financial services so we could have a contract with the a financial institution.   Cannabis Excise Tax – We received $22,491 for the month of October. With nothing being budgeted in July we have a 61.8% variance in budgeted vs. actual.  Grant Status Report – provided in the packet. Public Affairs – Presented by Juanita Jennings  Lodgers Tax Report – brief report by Juanita. Occupancy rate was 46.5% with $92,711 received in Lodgers Tax. Louis stated that the 3 hotels that are not reporting are all owned by the same corporation. Will Cavin asked what kind of loss was seen in GRT and Lodger Tax with the loss of Hike-It and Spike-It. Juanita stated that because that weekend is the same weekend of graduation a loss was not seen. Also, Glory Days is a new group that is a 4 on 4 flag football and is gaining momentum every year.  Roswell Visitor Center – brief report by Juanita.  Convention Center Bed Fee – brief report by Juanita. There was $49,567 received in August. Information Technology: - provided in the packet. 15. Financial Report- Presented by Chad Cole Chad handed out a report and went over the first quarter of revenues and expenditures. Revenues are reported at $26,790,340.16 with expenditures at $26,848,927.68 with the adjustments the balance is left at ($7,776,997.83). We really need to focus on our enterprise funds and what is important to the City, water, solid waste, airport and cemetery funds. We have to get the structure right for the city with recurring revenues and matching recurring costs. The City of Roswell is currently above the federal personnel rate increases. The City of Roswell is not trying to create a profit but cover the costs to the City. The full governing council lead by Mr. Perry did insist we review the first quarter of activity and that is what this report does. Councilor Heldenbrand added that the report shows that the current general fund is not sustainable and if the City continues the state will come in and take over. Councilor Heldenbrand reiterated moving funds into a money market account. 17. Water Source Supply Capital Fund Projects Presented by Janie Davies For information purposes only the Water Source Supply Capital Funds Projects will be using $90,000 of the project savings for additional funds needed for the upgrade at RAC Well 4. 18. UFO Report Presented by Juanita Jennings The major update to the UFO report is the profit and loss summary on page 15 of the report. The concert was broken out separate from the rest of the activities. The Alien Crawl is the only activity that made money. The UFO festival cost the City $91,451.55. Councilor Heldenbrand pointed out the $59,113,495.86 of gross receipts reports in July 2023. It was explained that this is all gross receipts reported to New Mexico Tax and Revenue. This is not the City’s portion of GRT. Chairman Corn stated this was a fair presentation of the festival, and a much better report of the festival. It was posted in the chat section online that the GRT came from NM GRT report for July, arts, entertainment, and retail sector. 19. RCCEDC Quarterly Report Included in the packet but not presented. RCCEDC did not submit financials, but will provide when they are ready. 20. Roswell Hispano Chamber of Commerce Quarterly Report Included in the packet but not presented. Chairman Corn brought attention to the fact the City of Roswell gave the Roswell Hispano Chamber of Commerce $37,500 (78% of their total revenue) and they had membership dues of $10,550.00. Chairman Corn stated that the City doesn’t mind helping these entities, but we can’t be the sole provider. Councilor Heldenbrand wants to know what they are planning on doing with the $18,323.21 in net income and how will it benefit the community. PUBLIC PARTICIPATION Bruce Andler made a statement in the online chat that, “the CoLA pay increase was a bill that the City was/is unable to pay, and the December Step increase is also a bill.” Rita Kane Doerhoefer asked if the 90 volunteers were actually volunteers or if this included the community service workers. Juanita replied that the 90 were actually volunteers. Rita made a statement that when the UFO Festival was ran by Mainstreet Roswell they had a lot more money than when the City of Roswell ran it. Rita Kane Doerhoefer stated that just because something is in the budget doesn’t mean you need to spend it, and that a need is different than a want. Rita Kane Doerhoefer wants to know what if any paperwork was filed when Scarlet passed away July 31, 2022 and what was done with her body. Scarlet was a red tail hawk that was a national animal. Only certain people were allowed to have Scarlet due her being a national animal. ADJOURN The meeting adjourned at 4:05 p.m.