While coping with the coronavirus, Rio Rancho families and businesses are creating their own “new normal” while building hope for a better future.
Many — especially those facing loss of income in a sinking economy — are cutting their budgets to the bone.
Likewise the City of Rio Rancho has quickly reacted with cutbacks to minimize the spread of the virus and reduce expenses while delivering more critical services like water supply and public safety.
Discussions have now begun on the 2020-21 city budget. It stands to reason that there will be cuts. New Mexico cities must rely heavily on revenue from gross receipts tax (GRT) — a state tax on sales of goods and services.
A worsening recession, especially in the retail sector, is likely to squeeze city GRT revenue even more.
With this crisis as backdrop, the city held a special governing body meeting on March 17, focusing on the cost of city economic development programs, which hold promise for a more prosperous future in Rio Rancho. The single largest cost in that area is a subsidy paid to the Sandoval Economic Alliance, totaling $1.2 million over the last six years with, as one official noted, “negligible results.”
Rio Rancho once had “its own” private economic development corporation (EDC), subsidized by the city. But that relationship dissolved in 2012 amid concerns that the EDC was not providing a fair return on the city’s investment.
At the work session, City Economic Development Director Matt Geisel presented a “Strengths/Weaknesses/Opportunities/Threats” analysis of past and present economic development strategies along with new approaches to growing the city’s economy rather than pursuing the SEA-funding status quo, termed “the definition of insanity” — i.e., repeating past behavior and expecting different results.
- Option 1: Bring Rio Rancho development funding totally “in house” with the addition of two to three city employees and creating, by ordinance, a Rio Rancho economic development advisory board, accountable, like other city boards, to the mayor and council. City funding to SEA would end entirely.
- Option 2: Divide the city’s annual development budget between in-house, with one or two employees, and SEA.
- Option 3: Long-term: Form a “Grow Rio Rancho” public-private umbrella organization that includes chambers of commerce and other potential partners working with one or two full-time city staff members.
Geisel laid out a matrix of advantages, disadvantages and strategic considerations for with each option. In addition, his presentation served as a primer on the economic development process.
I strongly favor Option 1. Option 2 merely weakens SEA financially, providing an excuse for continued under-performance. Most importantly, I truly trust the expertise and accountability of our city staff.
I have always opposed the city’s $200,000 annual subsidy to a private regional authority whose focus is county-wide and which is not accountable to Rio Rancho taxpayers. Like most councilors at the work session, I support more focused in-house solutions to the challenge of growing Rio Rancho’s economy and with it, our future.
In the current crisis mode, Rio Rancho can’t afford to subsidize other organizations that don’t deliver a positive return on investment. Our taxpayers’ money should be spent on our city — now more than ever.
(Cheryl Everett is a Rio Rancho resident and former city councilor.)