Where
city stands with rejected budget
By Fred
Mramor
of the
Desert Journal
The
following interview concerning the recently rejected budget of the City of
Truth or Consequences was conducted Tuesday with Gloria Gonzales, senior
budget analyst for the State of New Mexico Department of Finance and
Administration.
FM:
What’s the latest with the city’s budget?
GG:
I can’t give you much because they haven’t submitted the final budget
or the ending quarterly report ending June 30.
FM:
I was told city had submitted final budget and Gloria Gonzales will send
resolutions back unapproved. Did you get any resolution?
GG:
The resolutions we were talking about are from last fiscal year (2000/01)
which I am holding. I can’t really approve them yet and I have to review
them again based on their financials but I need more information before I
can make that decision.
FM:
Any other problems besides lack of information?
GG:
At this time it’s hard to say, it’s going to depend on their cash
balances - that’s my main concern right now. I’m looking at how they
ended March, that’s a real concern. That’s three months they have to
update me with. The final quarter is going to be the big determination as
to whether they’re in trouble or not.
FM:
What kind of trouble?
GG:
Financial as far as meeting the reserve requirements and being able (I can
see they can make it this fiscal year) to make it next fiscal year
(2002/03). I’m concerned about next year because of their cash balances
being so low. I’m concerned about the city being able to maintain one
twelfth of budgeted expenditures in the general fund, and the utility
fund, which supplements the general fund considerably, is very low.
FM:
I think you communicated these concerns to city officials in your July 27
letter, so nothing has really changed since then?
GG:
No.
FM:
Tell me more about process. City first prepares preliminary budget?
GG:
City manager prepares preliminary budget, commission approves it and
submits it to DFA. They’re required to submit preliminary budget by June
1. We require a preliminary budget because they haven’t closed out their
books, they still have the month of June, that’s why it’s preliminary
because they need an approved budget to start operating July 1. Then they
submit the final budget with final un-audited balances by July 30.
FM:
did they get the preliminary budget in on time (June 1)?
GG:
Yes they got it in early and were pretty proud of that but it didn’t do
any good because I didn’t have any financial reports for second and
third quarters (ending December and March).
FM:
So their next step was to submit those reports, which they have finally
done?
GG:
Yes and so their preliminary budget was approved July 27.
FM:
Next step was final budget?
GG:
Yes and my July 27 letter indicated what I needed for that final budget
approval which they have not submitted.
FM:
have you gotten anything you asked for in that letter yet?
GG:
No.
FM:
So with that they’re operating under an interim budget. Can you give a
little bit of a definition of “interim budget”?
GG:
Can’t raise salaries or make capital purchases that are not absolutely
necessary only because their balances were so low and they’re going to
have to do some cutting in their budget if those balances stay where they
are.
FM:
City officials told me they’re considering not raising salaries unless
employees get additional training and putting off major purchases such as
equipment and vehicles.
GG:
City cannot under current restrictions raise salaries even with additional
training.
FM:
City also considering not necessarily filling every job as it becomes
vacant.
GG:
I didn’t address that in the letter but that would be a smart choice.
FM:
Will land purchase for golf course be off or have to be postponed until
final budget approval?
GG:
Yes, unless they can work something out with us (DFA) depending on how
important the deal is. If backing out of the deal will cost them money,
we’d have to look at some different options there.
FM:
What can you tell me about resolutions going back to January?
GG:
They have submitted resolutions and I’ve been holding them and as I told
them I’m not approving them because I don’t have reports. I still have
them here and whether they did the expenditures already I don’t know,
they probably did in most of them. The ones I can approve are like if they
have grant money backing them up which they do have some like a federal
grant for violence against women. Those will be okay, the ones I’m
concerned about are the ones where they’re using cash to fund whatever
project.
FM:
I understand that with grants generally the city first spends its own
money on the project and is later reimbursed by the grantor.
GG:
Some grants work like that, some they give the city the money right away,
it all depends on the granting agency.
FM:
One thing that could help the city meet the bottom line is getting some of
this grant money?
GG:
That’s been one of the excuses, that they have all this grant money owed
to them from years back. As I look at the audits, the receivables for
grant reimbursements aren’t that high and aren’t really from years
back like they’re claiming.
FM:
Maybe only a year or two?
GG:
Maybe only one year. I don’t know where they’re getting that from
(uncollected grant reimbursements going back several years). The audit’s
not finding that, it’s not in the audit. Either the auditor isn’t
aware of it or if they (city) knows something they should bring it to the
(city’s contracted) auditor’s attention.
FM:
So from what you’ve seen in auditor’s reports so far the city doesn't
really have all that much coming in un-reimbursed grants?
GG:
From what’s written in the audit, no.
FM:
And those you do find, and those only going back about a year, how much
money are we talking about?
GG:
In different areas the most I saw was about $300,000. That total is
combined in the audit so I can’t say if that’s a single grant but
that’s the total amount.
FM:
Primarily what you were looking for in your July 27 letter was some
$500,000 [shortfall]. Is that right?
GG:
The joint utility had a beginning balance of $527,318 and an estimated
ending balance (June 30, 2002) of $11,142. How are they going to make up
the difference and how are they going to supplant the general fund with
$11,000? I mean they’re just depleting that joint utility and supposedly
they just increased utility rates. What are they going to do, increase
them again? I don't’ know how they can justify that to their
constituents but they have that authority.
FM:
So we have this $500,000 plus depletion, some reports not completed. Is
there another major or particular concern that you can identify?
GG:
No, I think that’s the biggest major concern, whether they’re going to
be able to keep operating at this level.
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