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Village Government Revenues Sag |
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Written by Jeff Radford
Corrales Comment
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Wednesday, 24 February 2010 |
Still staring at a looming $300,000 budget deficit for municipal
government, Village officials have decided they can’t cut personnel
although they don’t intend to fill five vacancies right away.
After a closed session of the Village Council’s mid-fiscal year budget
review February 9 during which possible staffing cuts were considered,
Mayor Phil Gasteyer announced “The council has reviewed existing
Village personnel and their work assignments.
“In terms of cutting Village expenditures, it does not see any ‘low
hanging fruit,’ meaning the current staffing is essential to the
delivery of the services expected by the citizens of Corrales.”
The mayor outlined the bleak financial picture for councillors last
month as they began their mid-year budget review comparing revenues
that had been projected last June and what has actually come in so far.
He had anticipated a shortfall as the general national and regional
economy tanked, so he had decided not to fill some Village personnel
vacancies as they arose last year.
An example was not hiring a new recycling program director when the
person in that position resigned; instead members of the Corrales
Volunteer Fire Department have stepped in manage the recycling program
just behind the fire station.
Mayor Gasteyer told council members not filling that and other vacancies had saved about $250,000 so far.
But gross receipts taxes from retail sales are still weak and property
tax payments to the Village had not materialized as expected, he warned.
Village Administrator John Avila is reviewing purchase orders in all
departments of Village government to see which can be stopped or
delayed.
“Similarly, the administrator and the finance officer are monitoring
so-called ‘open contracts,’ such as on-call repair servicing for
computers and servers, to be sure that all work performed is necessary
for Village operations,” Gasteyer said.
“On the revenue side, I will continue to pursue what appears to be a
delay in property tax revenues due the Village from the County
Treasurer.”
Last month, the mayor began discussions with council members on how the Village might avoid a financial crisis.
“We think we are down around $300,000 from where we should be on what’s
basically a $4 million general fund budget,” Gasteyer said January 30.
“The question remains whether we should make mid-year [mid fiscal year]
changes at this point in terms of our spending, which is difficult to
do because about 60 to 65 percent of our general fund spending relates
to salaried positions and the associated employee benefits that go with
them.”
In an interview with Corrales Comment January 30, the mayor explained
the situation this way. “We’re concerned about our revenues, and we’re
going to have to be very cautious about how we manage our finances for
the remainder of the fiscal year based on the actual numbers we have in
front of us up through the month of January which is 59 percent of the
fiscal year.
“The greatest short-fall on the revenue side is in our gross receipts
tax revenues,” he continued. “They have been very erratic over the past
few years, so it was a difficult task to project what they should be in
our budget for this fiscal year, but they do seem to be running about
11 percent below what we had anticipated” when the municipal budget was
approved last June.
“But we’ve also been prudent in our expenditures, so we’ve managed to
keep our expenditures about 6 percent what we had anticipated.
“However, last May the council, which has the purse strings authority, chose to project more expenses than they did revenues.”
Three of the five vacant positions that have not been filled as the
administration reined in spending are in the police department. “There
are three unfilled slots in the police department, one unfilled spot in
planning and zoning and the recycling technician who found a better job
and left in October, and the fire department took over operation of the
recycling activity.
“We have cut out various training like Municipal League conferences and travel that isn’t covered in some other way.”
The reduction in staffing is straining remaining personnel, the mayor
noted. “Over a longer time frame, it reduces our ability to serve the
public.
“People are very happy with the fact that Corrales has such a good
record as the safest municipality in the state. That’s in part because
we have a police force that’s normally with 18 officers and
supervisors. Cutting back to 15 is not something we want to do.”
As far as staff in the P&Z office, he said, “We certainly have more
than enough activity for planning and zoning staff —the building
inspector and the planning and zoning administrator— but this unfilled
position does coincide with a reduction in construction activity,
subdivisions and site plan reviews” which makes it easier to get by
with one less staffer.
Gasteyer said he can’t tell exactly which sectors of the local economy
are causing the biggest drop in gross receipts taxes. He thinks
Corrales’ restaurants are generating taxes. “Perea’s seems to be doing
fine, the new restaurant [Oasis Cafe] seems to have people all the time
and Village Pizza is no doubt our big performer.”
He said some Corrales business saw a big drop in sales during the holidays while others had their best December ever.
Property taxes are also down. “We are puzzled by why there is such a
drop in property taxes. Why should the recent tax distribution period
be $60,000 less than last year?” he asked. “Almost everybody in the
village has had that three percent bump in their assessment.”
He said that reduction seems to be between $50,000 and $100,000, or a 10 percent drop. “It doesn’t make sense to me.”
As the revenue income continues to sag, the mayor said, villagers may
experience a deterioration in service to the public. “I guess you might
see that in response time when you call the Planning and Zoning Office,
or whether or not the broken stop signs gets replaced by the Public
Works Department, or the library is able to upgrade and maintain their
computers, or what you can ask the Village Engineer or the Village
Attorney to give you professional advice on.
As Village officials were checking how fast they were running
through their budget with 59 percent of the fiscal year behind
them, they had actually received $1,035,452 in gross receipts tax
compared to $2,173,000 which had been projected for the full fiscal
year.
Property taxes had been projected at $665,108 whereas just $447,035 had
come in. Licences and fees had been projected to bring in $492,826 for
the full year whereas $254,266 had come in at the 59 percent mark.
Property taxes distributed in January 2010 were $376,626.53, down
considerably from the $421,599.89 that were paid to the Village in
January 2009.
The mayor said it is not clear why that would drop since property tax
rates had gone up, and even if property owners protest their
assessments, they are supposed to pay and reclaim their money if and
when the protest is successful. |
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