Rio Rancho City Hall. File photo.

The City of Rio Rancho has converted a gross receipts tax increment to general use from water-system and trash-related purposes.

At the Rio Rancho Governing Body meeting Thursday night at City Hall, governing body members voted unanimously, with Councilor Jim Owen absent, to make the change in the ordinance.

“The amendment will not increase the gross receipts tax rate in the city, but will provide the city with more flexibility on how the taxes can be spent,” said Financial Services Director Carole Jaramillo.

She said the Municipal Environmental Services Gross Receipts Tax has been in place since 1992. It generates 6 cents for every $100 of eligible transactions.

In 1992, state law required that the money be used only for solid-waste, water, sewer and related facilities, Jaramillo said. City ordinance mirrored that mandate.

In 2019, the state legislature began allowing general use of the Environmental Services GRT and other GRT increments with narrow purposes. To begin broader use of the money, Jaramillo said, the governing body needed to change the ordinance to match.

She said what had been the Environmental Services GRT would still partially fund the Keep Rio Rancho Beautiful program and debt service to loans it’s earmarked to repay.

Mayor Gregg Hull said he would recommend that half of the remaining proceeds go to economic development in the next fiscal year.

“What this has been used for — the primary use, the biggest use — has been economic development,” he said, pointing to water and wastewater infrastructure that Cleveland High School, the Cleveland Heights housing development and Los Diamantes subdivision use.

“The residual amount of this GRT that would just sit in this fund with very constrained uses doesn’t really serve an overall good purpose, just sitting in this fund, accruing,” Hull said.

In other business, governing body members:

• Awarded an almost $2.4 million contract to HDR Engineering Inc. to design the reconstruction of Southern Boulevard from Golf Course Road to Unser Boulevard. Public Works Director BJ Gottlieb said the design would start this month and take about two years, as with the prior phase of the Southern Boulevard reconstruction.

• Approved a zone change for the site of the First Church of Christ Scientist on Golf Course Road. The change from low-density single-family residential land use to neighborhood commercial use makes the property match with the lots on either side of it and allows the church to sell it to a business and move, said Planning and Zoning Manager Amy Rincon.

• Approved a second reading of a $15.15 million loan from the New Mexico Finance Authority to make improvements to the water system, including redrilling Well 9, improving the arsenic treatment facility and making security upgrades.