The state’s analysis of Elephant Butte’s second-quarter financial report shows no spending violations, but did give cautionary warnings.
The city’s quarterly performance review by the New Mexico Department of Finance and Administration flagged Sierra Del Rio Golf Course, which was donated to the city about three and a half years ago, as a potential budget issue.
Elephant Butte had been subsidizing the golf course’s operation to the tune of between $300,000 and $400,000 annually until this fiscal year, which began July 1, 2020. With Spirit Golf, the course’s new management, in place, the city budgeted this fiscal year’s subsidy at $200,000 through June 20, 2021.
Anita Medina, a DFA Local Government Division analyst, noted in her financial report that the city had spent nearly $190,000 of the $250,000 in the Golf Course Enterprise Fund by mid-year, when expenditures should be about 50 percent of the budgeted amount.
The Fire Protection Fund, Medina noted, had also spent nearly $202,000 of the nearly $215,000 in expected revenue. However, the fund started out with more than $237,000 in cash reserves.
The checklist LGD analysts use to grade cities’ quarterly performance shows none of Elephant Butte’s 12 major funds have cash deficits, which are prohibited by state law.
Transfers were also on the checklist. State law requires that the transfer of monies from a sending account to a receiving account net out to zero. The LGD report noted the transfer of $200,000 from the General Fund into the Golf Course Enterprise Fund. It also noted the transfer of about $129,000 (nearly $20,000 out of the Water Enterprise Fund and $109,000 out of the Wastewater Enterprise Fund) into the Debt Service Fund.
None of the expenditures in the 12 major funds exceeded the yearly budget’s projected expenditures, in accordance with spending requirements.
Not all expected major revenue has come in, Medina noted. Elephant Butte gets a state “Small Cities” grant of $140,000, which has not yet arrived. The city is expecting about $130,000 in property taxes, with less than half or about $62,000 received. The state Law Enforcement Protection Fund grant of $20,000 has been received.
The “Other Capital Projects” fund has received only 2 percent of expected revenue and has spent 14 percent of the budgeted monies, an issue noted in red on Medina’s form.
The Golf Course Enterprise Fund’s expected revenue is zero, since transfers are not considered revenue. The expenditure of 76 percent of the $250,000 in the fund mid-year is also noted in red on Medina’s form.
The overall budgetary picture remains positive. The General Fund has received 55 percent of expected revenue, and the city has spent 48 percent of those funds. This represents underspending of about 7 percent at mid-year.