Madrid gave an example. He claimed more money was transferred out of the utilities and into the General Fund in fiscal year 2018-2019, $1.6 million, than what is planned for the upcoming 2020-2021 fiscal year’s budget, nearly $1.3 million.
There are hard numbers for transfers for the 2018-2019 fiscal year, the audit becoming public about a month ago. Madrid claimed $1.6 million, but actually less than $1.5 million was transferred from utilities into the General Fund.
Madrid didn’t draft that budget, prior-City Manager Juan Fuentes did, with Madrid hired around December 2018, making him, along with the City Commission, responsible for the last half of the 2018-2019 fiscal year.
Fuentes had planned to transfer an exorbitant $5.34 million into the General Fund, an amount sanctioned by the City Commission, who passed the budget. Mayor Sandra Whitehead and City Commissioner Paul Baca were on the board then and now.
While the transfer turned out in reality to be much less, Madrid did not give the City Commission the full picture of utility dependence. He failed to point out that not all the money transferred out of the utilities ends up in the General Fund.
The 2018-2019 audit shows over $1.5 million was transferred out of the electric fund, about $141,000 was transferred out of the sewer fund and over $211,000 out of the solid waste fund, for nearly $1.9 million taken out of utilities fees.
Therefore the utilities funded over $400,000 of the following deficit funds, above and beyond the $1.5-million that went into the deficit General Fund: corrections $25,000; recreation $42,000; swimming pool $195,000; critical infrastructure $12,000; emergency repairs $2,500; golf course $120,000.
Another point Madrid skipped over was fiscal-year 2019-2020 transfers, the current fiscal year, which ends June 30. Unlike other city managers, he has given no quarterly budget reports and the City Commission has not required them. Therefore it is unknown how closely the City has stuck to the plan.
What was budgeted last July was transfers of $1.8 million out of the electric fund, $122,000 out of the water fund, $401,000 out of the solid waste fund and $239,000 out of the sewer fund, for a total of $2.56 million.
About $1 million is budgeted for the General Fund and about $440,000 to run the Joint Utility Office. Another nearly $1.2 million will fund deficit funds.
This does not reduce the City’s dependence on utility fees from the prior year, as Madrid claims.
In 2018-2019 $1.9 was taken out of utilities fees and the current budget ending June 30 calls for $2.56 million to be taken out of utilities fees, about $700,000 more.
One of Madrid’s solutions to these massive transfers out of the utilities is to call them by another name.
During the May 27 meeting he said other cities charge between 9 percent and 15 percent of the utilities’ profits to pay for administration fees.
“For example,” Madrid said. “If the electric fund made $6 million that would be $600,000. The only thing to decide would be how to spend that money.”
What Madrid failed to tell the City Commission is that the Joint Utility Office, which supposedly administers the utilities, is already paid about $500,000 a year out of the utilities’ fees.
He also failed to point out that cities charging utilities an administration fee actually pay administration salaries out of that money, they don’t spend it elsewhere.
The City Commissioners said not a word about Madrid’s scheme.
Madrid also said, “We are also going to get a lot more aggressive about fixing the infrastructure.”
Again, the City Commission didn’t question the money source.
Therefore it appears utility fees will continue to increase to pay for a failing and long-neglected infrastructure on top of the increasing deficit spending, which is in addition to the usual utility operations and maintenance costs.