The final budget was approved at the July 15 meeting, which is due to the state by the end of the month.
The General Fund, which pays for all governmental activities, will spend $1.3 million, about $470,000 more than the $830,000 it will make in revenue.
The City will start with nearly $800,000 in the General Fund, but will end up with about $274,000 next June. The state requires all cities keep one-month of its estimated General Fund expenditure on hand, which totals about $110,000, therefore the cash reserves at the end of the year are sufficient.
City Clerk Rani Bush said the ending cash balance in the General Fund is “not good,” but “we were very conservative in estimating revenues,” so the year end may look better than the budget projection.
Bush said the City is not alone in spending cash reserves. “It is where most cities are at,” she said, referring to the COVID-19 crisis, which has hit Elephant Butte hard, a resort town dependent on tourists’ gross-receipts-tax-revenue.
If tax revenues are worse than estimated, Bush said there is spare cash in the “enterprise funds,” the water and wastewater utilities, which are run as self-sufficient businesses, in contrast to “governmental activities,” such as fire protection and law enforcement, public services paid for by taxes or grants.
Unlike Elephant Butte’s reluctance to dip into enterprise funds to support the General Fund, which pays for governmental activities, the City of Truth or Consequences transfers over $2 million out of enterprise funds and into the General Fund each year.
The estimate for General Fund revenue from gross receipts taxes is estimated at a little over $300,000, about 25 percent lower than last fiscal year. The “Small Cities Grant” from the state will add another $140,000. Total revenues for the General Fund are estimated at $782,000.
The Fire Department will take in $301,000 in state fire funds, with nearly $306,000 in total revenue. It will spend about $312,000, the remaining $6,000 expense coming from reserves.
Law Enforcement will get $30,000 from the General Fund and a $20,000 grant, spending the same amount, or $50,000.
The Lodgers’ Tax will take in $20,000 revenue and spend $20,000 in cash reserves to make its $40,000 expenditure.
Capital projects will cost $916,000, with $691,000 in grants and a loan paying for most of the expenses. The budget doesn’t indicate how the $225,000 shortfall will be made up. Perhaps only a portion of the work will be done, pushing the remaining work into the next year. The projects listed are $501,000 for Camino Cinco and Michigan streets; $400,000 for wastewater projects and $15,000 for an off-highway-vehicle park.
The City’s debt expense is $162,615, to be paid for by the General Fund.
The other big transfer out of the General Fund is $250,000 to support Sierra del Rio Golf Course. The City was given the golf course and club house about three years ago. It has reduced the yearly expense from between $300,000 and $400,000 in prior years by contracting with Spirit Golf, which has managed the facility the last two months. Spirit Golf’s expertise is expected to increase revenue to the break-even point and then to the profit-sharing point over the next five years.
The water utility will take in $242,000 in revenue and spend $206,500. The wastewater utility will take in $455,000 and spend $326,000. Both have healthy cash reserves.