BDD News
News Release
For More Information, Contact:
Patti Watson — 1-800-687-3417/505-269-9691 cell
Rick Carpenter — 505-955-4206; 660-5696 cell
FOR IMMEDIATE RELEASE—February 5, 2009
UNM Study Finds Buckman Direct Diversion Project will Inject $287.2 Million into Regional Economy During Construction
BDD Project Predicted To Add 83 Professional Service Jobs and Sustain 600 Construction Jobs
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A study by the University of New Mexico Bureau of Business and Economic Research (BBER) estimated construction of the Buckman Direct Diversion (BDD) Project will inject $287.2 million in net economic benefits to the regional economy through the completion of construction in 2011 and will generate and sustain more than 500 jobs per year during the same period.
The study defined net economic benefits as the total benefits of the project minus the negative impacts on the economy of taxes and water rate increases that are providing funding to build the BDD.
Commissioned
by the BDD Board, the study is important in analyzing the “positive” economic
impact of the project, according to BDD Board Chair and Santa Fe Mayor Pro
Tem Rebecca Wurzburger. “While the BDD has publicly discussed the
cost of the project, we believe it’s also important to consider the positive
economic impact construction and operation of the BDD will have on the Santa
Fe region,” Wurzburger said.
BDD Board Vice Chair and County Commissioner Virginia Vigil agreed, adding, “Since
we are in a recession evidenced by increased unemployment rates, new jobs
are welcomed in our community.”
The study estimated the BDD will “create or sustain over 500 jobs in the local economic region.” Based on commuter patterns and spending, BBER defines the local economic region to include Santa Fe, Bernalillo, Rio Arriba and Sandoval Counties, which are a “functional economic area,” or a semi-self sufficient economic unit.
The study estimated construction spending will support an additional $286.6 million in economic activity (including the contractor’s receipts from the project, spending on goods and services for construction of the project and spending by contractor employees or those indirectly supported by the project) for the four-county region while the project is being built. The total labor income will be $93 million during BDD construction. BDD construction is expected to generate nearly $3 million in gross receipts tax revenues for Santa Fe County and $9 million for the State of New Mexico, not including revenues on a PNM construction project to support the BDD.
Spending by employees supported directly and indirectly by the BDD Project is estimated to generate an additional $1 million in gross receipts taxes for local governments in the economic region during BDD construction, the study said.
In terms of professional services contracts, the study estimated $25.8 million will be spent during BDD Construction, with most of the money going to pay for architectural and engineering services provided by local firms. The economic impact to the region is predicted to be $34.8 million, with the BDD generating an average of 83 professional services jobs and $14.2 million in labor earnings. Professional services contracts will generate more than $250,000 in gross receipts tax revenue for communities and counties and another $320,000 for the state during construction.
The economic impact of the BDD Project is particularly important, according
to the study, because the Santa Fe Metropolitan Statistical Area (MSA), which
consists of Santa Fe County, has been one of two areas in the state “hit
very hard” by the national recession.
According to the New Mexico Department of Workforce Solutions, the seasonally
adjusted
unemployment rate in the Santa Fe MSA was 3.6 percent in November 2008, one
percent higher than the 2.6 percent rate in November 2007. Also, year-over-year
job growth was a -0.9 percent, representing a total loss of 600 jobs out
of 65,700 jobs as of November 2007. The report noted that Santa Fe
has experienced year-over-year job losses since June 2008 – the first
instance of negative growth since April 2001.
In longer term economic impacts, the study reported the BDD Project will directly employ 26 people when it becomes fully operational. BDD Project staff will have an estimated base wage of more than $41,000 and total compensation of about $65,000 per employee annually.
The study also considered the importance of building the BDD at a time when the region is experiencing an unprecedented downturn. Local government revenues are flat or declining, requiring difficult decisions about programs, services and the personnel serving the community. Revenues related to a major project like the BDD can be crucial to maintaining levels of service and providing support for government operations that can, in turn, positively affect local spending and job creation.
The study did not consider the potential economic value of creating a drought reserve in the aquifer. “A community with too little water that does not deal proactively with the possibility of severe water shortages creates a climate of uncertainty about the drought restrictions that may periodically have to be implemented. Not addressed here are the benefits of the economic investment that may occur to create jobs and provide additional economic activity once this uncertainty is removed,” the study stated.
While the BDD Project is expected to inject less into the local economy once construction is completed, the study noted that “by then, the regional economy should be in recovery and no longer in need of stimulus.”
The study used a regional economic impact analysis program
called IMPLAN Pro 2.0 and data provided by BDD project staff, the City of
Santa Fe, and BDD consultants to estimate the Project’s net economic
benefits, which are the total benefits of the project.
A copy of the economic impact study is available by visiting www.bddproject.org,
and clicking on BDD News-Downloads.
The Joint Venture team on the BDD Project, CH2M HILL/Western Summit Constructors,
is currently hiring experienced carpenters, heavy equipment operators, concrete
masons and finishers. For information on job openings, call (505) 216-1333
or visit
www.jobs.state.nm.us/jobbanks/joblist.asp?session=jobsearch&geo=352142140&t=q&faqq=
About the UNM Bureau of Business and Economic Research (BBER) - Established in 1945, the BBER has decades of experience and in providing objective and credible demographic and economic information, analysis, and projections to New Mexico businesses, state and local government agencies, and the general public.
About the Buckman Direct Diversion Project - The BDD Project will provide a sustainable way for the City of Santa Fe and Santa Fe County to access surface water supplies by diverting San Juan-Chama Project water and native Rio Grande water to reduce their reliance on over-taxed ground water resources. Design and construction on the BDD began in September 2008 and is expected to be completed, with the project operational, by March 2011. Estimated cost for design and construction of the project is approximately $216.3 million.