Hospital Mill Levies
Below are statements made by some at the last City Council Meeting, and I would like to address some misconceptions.
'Honor the 8 year agreement as “promised” to the hospitals"
I repeatedly heard this comment last night, however, when voters went to the ballots in 2008 they were voting on not less than 4 years, but not more than 8 years to approve the 4.25 mill levies. This is the 4th year and the County Commission should have the option of leaving it as-is, voting to decide whether to extend/expire it, or vote to put it on the ballot for the citizens to decide. Our commitment has been met for the minimum 4 years. The hospital representatives present at City Council meetings in 2008 stated (when asked) that they would be coming to Rio Rancho even if the bond failed. My opinion is that the language on the ballot was deceptive. When voters read not less than 4 years, but not more than 8 years, they believe they are committed to 4 years with the option of extending to 8 at a later time. In 2008, Sandoval County Commission took it upon themselves to sign a contract with the hospitals that may commit them to the full 8 years. This was not necessarily what the voters intended, but was what the County Commission decided to do.
"We need the hospitals in Rio Rancho."
First, please remember that the hospitals will not be leaving if the mill levies are removed. They may or may not remove some special services, but that should be determined by the demand for those services.
"The hospital helps with my property value."
While this is true, people also have to remember that the quality of our roads, water system, and public safety infrastructure affects not only our property values but also our insurance premiums. Our tax rates also are a factor in people buying or building homes and businesses in Rio Rancho.
"People voted the last road bond down, so the roads aren’t as important to them."
The road bonds were voted down because people were unhappy with where the bond money was going to be spent. The largest percentage of citizens I have spoken with (hundreds) over the past several months, overwhelming are upset with our roads and breaking water lines in the older areas of the city.
"Why can’t we just add another bond or mill levy for infrastructure?'
Wouldn’t it be nice if the answer to all our problems was to just add another tax. Unfortunately, the citizens of Rio Rancho are heavily over-burdened with property taxes and our City’s fees and sales tax are already higher than surrounding areas. Our infrastructure is decaying and needs to be addressed now. Yet the past few years have been the hardest economic times most of us have ever seen. How can we justify adding another tax, while continuing to subsidize successful private businesses such as the hospitals, when we have met the proposed minimum of 4 years on the mill levy? What I have proposed is to remove the 4.25 mill levies for the hospitals and replace it with a lesser 2 mill levies for public safety ( the new public safety 2 mills would have to be placed on the ballot). The hospital tax accounts for about 16% of our property taxes and totals about $16 million each year.
"The hospitals will be bringing a lot of other businesses and gross receipts to Rio Rancho."
We all know the value of having a hospital and the businesses it will bring. What we do not know is which businesses will come, when they will arrive and how much gross receipts those businesses will produce. Medical services typically do not generate gross receipts revenue, with the exception of some non-medical contracts or services. The other factor is how many of these businesses will receive tax or fee incentives to come here. I am in support of providing some of these incentives - we are all excited at the prospect of having more restaurants and shopping centers in our city, and we are committed to bringing them here. If we offer other businesses impact fee credits or tax incentives, how do we address our infrastructure and public safety needs in the short-term (2-5 years) while waiting for this influx of gross receipts revenue, which could be much longer? Rio Rancho already has the second highest tax burden of the ten largest cities in New Mexico. Unfortunately, our gross receipts revenue is a dismal 48% of our revenue, whereas most cities in New Mexico have 70-80% of their revenue coming from gross receipts. This allows them to not rely solely on property tax money to meet the basic needs of maintaining a city. Removing the hospital tax and adding a more modest public safety tax will help get us to the time when we have more gross receipts revenue. A public safety mill levy would then be attached to the growth of the city and would increase accordingly with population growth. Removing the hospital mill levies will not make the hospitals leave and the City of Rio Rancho has honored the minimum 4 year commitment to the hospitals as proposed on the ballot.
"The Council is making “easy” decisions."
Our city infrastructure and public safety are desperately in need of attention. We have about 100 water lines breaking each month. With those repairs comes the cost of hundreds of patches to the roads, as well as the wasted millions of gallons of water. Roads like Southern Blvd are degrading at an alarming rate, and I would remind people that repaving Southern Blvd was NOT included in the last two road bonds. Our deteriorating water lines and roads will need attention soon.
Our City also has serious problems with public safety. Our under-manned and under-equipped fire department only met the ISO recommended 4-minute call response time 25% of the time in the last year. They are in serious need of new life-saving equipment. These factors could cause our home insurance rates to increase if not addressed before the next ISO inspection of our city in 2 years.
Additionally, we have about 50 police vehicles over 100k miles and another 24 that will be over 100k miles in the next year. Our police radio equipment has dead zones in Rio Rancho, which have required them in emergency situations to call in on their cell phones. We also only have about 1.4 police officers per 1000 citizens, when FBI statistics recommend 2.4 officers per 1000. A new police cruiser costs about $37,000, and to equip, train and hire a new police officer will run about $100,000, initially.
There are no easy decisions, no quick-fixes. I would like to remind everyone that while the citizens voted for the minimum 4 years/maximum 8 years, Sandoval County has a contract with the hospitals, and they are the ones with the authority on this. Rio Rancho City Council can pass a resolution to ask the County Commission to put the Hospital mill levies back on the ballot, but the County Commission would make the decision. I have recently heard back from the County Commission, and after their attorneys reviewed the contract the County signed with the hospitals, it appears that they committed us to the full 8 years in that contract, regardless of what the voters may have intended.