The vote will take place tomorrow, May 27, at a meeting scheduled at 5:30 p.m.
Most cities’ boards get a quarterly budget report so they can monitor spending throughout the year. When it’s time to draft a new budget, board’s know if they have spare cash or need to cut back.
City Manager Morris Madrid submitted last July’s budget book to the City Commission—with no updated audited figures on revenues, expenses or budget adjustments that have occurred throughout the year.
Therefore the City Commission is starting a new budget with information more than a year old, with no audited or firm figures.
Madrid has been city manager for a year and a half. His 2019-2020 budget increased expenditures from $23.8 million the year before to $26.2 million.
The preliminary budget this year cuts expenditures back to $22.2 million, but without knowing what happened this year, it’s impossible to know how the city will spend $4 million less.
The General Fund will not spend less, but $400,000 more than budgeted for 2019-2020, which ends June 30. The General Fund budget is going from $5.6 million to $6 million.
The General Fund pays for all governmental services that are not expected to be self-sustaining, unlike enterprise funds, such as the water, wastewater, solid waste and electric funds. The General Fund pays for administration’s salaries and benefits and police protection, for example.
The General Fund’s biggest revenue source is not property taxes and gross receipts taxes, as with most cities. The City averages an extremely small amount in property taxes, about $160,000 a year.
The General Fund’s GRT portion was budgeted at $1.7 million this year, but it is unknown if that came in, since Madrid gave no budget reports. Madrid budgeted the same amount for 2020-2021, despite the coronavirus pandemic. Elephant Butte, in its preliminary budget, cut GRT revenue 25 percent from last year.
The biggest source of “revenue” to the General Fund is not GRT or property taxes, it is actually a transfer from the water, wastewater, solid waste and electric funds. Transferring money out of utilities is legal, but not good practice, since all utilities monies are supposed to be churned back into the utilities. The City’s water and wastewater utilities are in desperate need of repair.
Even before the coronavirus hit, the city raised the water rates an enormous amount, the percentage increase varying according to consumption amount, to pay for a nearly $10-million project that will only fix a small portion of the system. The rate increase will hit citizens’ pocketbooks this month. Sewer and solid waste fees go up 5 percent every year.
Even with a budget of projected figures based on unaudited projected figures, it is not hard to predict that because the GRT will probably be less than last year, bigger transfers from the utilities will be necessary.
It follows that citizens will be hit hard in the year of a pandemic, paying even more for the General Fund out of their utility fees as well as for utility repairs, as well as for the normal utilities’ operations costs.