Finance Committee

Special Meeting of the Finance Committee Roswell Public Library – Bondurant Room 301 N. Pennsylvania Ave Wednesday, May 22, 2024, at 1:00 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 24-23. ROLL CALL The meeting convened at 1:02 p.m. with Chairman Corn presiding, Councilor Cavin, and Councilor Heldenbrand, being present. Councilor Halvorson and Councilor Johnson, being absent. STAFF PRESENT Della Andazola, Bruce Andler, Chad Cole, Abraham Chaparro, Janie Davies, Toni Gomez, Amalia Martinez, Mike Mathews, James MacCornack, Quinton Miller, Rene Otero, Debbie Reyer, Tammi Smith, and Hess Yntema. GUESTS PRESENT Rita Kane Doerhoefer, Terri Harber, Mayor Tim Jennings, Councilor Marrujo, Councilor Moore, and Councilor Oropesa. FOR THE RECORD: Councilor Johnson arrived at 1:12 p.m. APPROVAL OF AGENDA Councilor Cavin made a motion to approve the agenda. Councilor Heldenbrand seconded the motion. The motion passed with a 4-0 voice vote, with Councilor Halvorson being absent. ACTION ITEMS 1. Consideration of adoption of Resolution 24-24 approving the City of Roswell fiscal year 2024/2025 Preliminary Budget. Presented by Chad Cole. The final budget is required by the State of New Mexico Department of Finance and Administration. The Preliminary Budget was developed on a basis of need and cooperation between the City Manager, departmental staff, and elected officials. Once a Preliminary Budget has been adopted, only the beginning cash figures can be adjusted for the adoption of the final 2024-2025 budget. Chad presented the FY25 budget summary and gave a basic description of the report and explained the difference between a balanced budget and positive cash balance budget. The FY25 Preliminary Budget is a positive cash balance budget. The revenue including capital report was presented line by line. The GRT projection report, transfer including capital report, and indirect cost allocation worksheet was explained in detail. The personnel list and the personnel budget were briefly explained. Councilor Oropesa asked if the transfers were funds coming in or funds going out. Janie explained that the transfers in red are going out of the fund while the transfers in black or going into the fund. Councilor Cavin asked what the prior FY employee count was? Chad answered that has been one of the difficulties the City has faced in getting a correct full time employee count. Councilor Johnson asked if the City could get a 10-year history of the full-time employee count to look at trends. Councilor Heldenbrand suggested that we look at the full-time employee count that was budgeted for the past 10 years. Councilor Heldenbrand also added that while we did see employees taking an early retirement during COVID, the City did replace the positions and it had a zero net effect. When looking at full-time employee trends you want to compare the employee total costs to gross receipt revenues. Councilor Heldenbrand stated that when he had looked at these trends the City’s personnel cost had increased significantly more than the increase seen in gross receipt revenues. Mayor Jennings stated it is extremely hard to have a balance budget with employee costs and the high cost of employee benefits and it is very apparent this is a problem. Chad noted the employee personnel costs and the long-term debt service does make it extremely difficult for the City to have a balance budget where revenues match expenses. Chad went over the long-term debt the City is carrying for the convention center, recreation center, and the smart meters. Chairman Corn pointed out the maturity dates of the long-term debt and the amount of funds required each year to make the principal and interest payments on the existing debt. Councilor Johnson stated the 20-year payoff of the long-term debt is really quite scary for the City. Mayor Jennings expressed that when the City officials say the City is broke this is what is being looking at. The City is looking really close at what can be done to get closer to having a balanced budget. Chad stated the City has lost 4 directors in FY24 that are not being replaced. Chad expressed his shock in learning of the high percentages (75% to 88%) paid by the City for employees’ medical insurance. He stated that he didn’t know of any other employer in Roswell that contributes such a high of a percentage for the employee medical premiums including family premiums. Chairman Corn told the committee that he has invited Molly Montano, City of Roswell Human Resource Director, to the Finance Committee Meeting on June 06, 2024 to explain all benefits the City of Roswell offers to employees. Councilor Oropesa asked if the 4% increase in budgeted salaries would be a cost-of-living increase or taken as a step increases. Chad replied that we can’t  speak for the different unions involved in the City, and it would depend on the union negotiations in the coming fiscal year. Councilor Heldenbrand stated there was a 1% cost of living raise in FY24, and no step increases. Chad let the committee know that on June 29 the Fire and Police Department were teaming up with the Human Resource Department for joint recruiting event with try-outs. Chad also let everyone know that in the FY25 budget, vacant positions were budgeted at 100%. Chairman Corn shared with the committee how he goes through the packet and highlighted some of the important items. He did point everyone to the budget summary on page 3 and went over the 3/12’s reserve. He explained that the City does not want to use the funds for recurring costs and that the City needs to protect these funds. Chairman Corn also stated how budgets are about making compromises, and he vowed his support to Chad in sticking to the FY25 budget. Mayor Jennings added that the City really needs to keep the extra 2/12’s in reserve to cover grants. The City needs these funds to cover expenses while waiting for reimbursement from the granting agencies. Mayor Jennings stated the City was going to get to the bottom of the personnel/benefit costs. The City is going to determine if departments are over/under staffed and if the benefit schedule is creating to much of a burden on the personnel costs for the City. The City is also working on replacement schedules for equipment and vehicles in departments to make sure the City is staying up with replacement of these items. Chairman Corn stated that the City is not going to be able to get out of the current financial hardship overnight, and in his opinion, it will take 4 to 5 years of persistence and dedication to have a truly balanced budget. Chairman Corn asked if anyone had any additional comments or questions. Councilor Heldenbrand made a motion for the recommendation of adoption of Resolution 24-24 approving the City of Roswell fiscal year 2024/2025 Preliminary Budget to the full city council. Councilor Cavin seconded the motion. The motion passed with a 4-0 voice vote, with Councilor Halvorson being absent. PUBLIC PARTICIPATION Bruce Andler stated he has prior year employee counts from IPRA requests he had done in the past. He asked if he needed to do additional IPRA request for corrected employee counts. He also questioned why more people are being hired when the City is broke, and is the City going to do a reduction in the  workforce. He also stated that this is not fixing the issue of employees being underpaid in his opinion. Rita let everyone know that on May 23, 2024 the Patriot’s Tour would be at Champion during the lunch hour. ADJOURN The meeting adjourned at 2:36 p.m.