All New Mexico’s cities’ final budgets are due July 31 and Truth or Consequences’ city commissioners approved their $83.6 million budget at a special meeting July 29.
The commissioners gave very little comment and asked very few questions and City Commissioner Amanda Forrister was absent.
City Manager Gary Whitehead, with less than a year and a half under his belt, has the budget process well in hand, and has worked with Finance Director Jocelyn Holguin to streamline and better label funds and to make cost assignment, i.e. matching costs to a specific function, service, capital project or department, much more organized and transparent.
Whitehead has also centralized the payment of recurring costs, which is reflected in the nearly $4 million being transferred out of the water, wastewater, solid waste and electric departments. Instead of those departments’ staff seeking purchase orders for fuel, insurance, auditing services, tires, etc., the finance department will make those purchases, saving many hours of administrative staff time.
This centralizing of recurring-cost purchasing not only saves money in staff hours, but also by creating economies of scale that gives the city greater purchasing power to demand discounts.
For example, the city’s Service Center, which handles fleet maintenance, is purchasing in bulk and taking over mechanical services that used to be spread over many private businesses. That department had a $150,000 a year budget, but it is now about $750,000, and Whitehead said it’s saving money and staff time.
Whitehead’s attention to creating efficiencies in how staff time is used is essential. T or C residents should keep in mind that prior to 2019 the city took on, maybe, $1.5 million a year in capital projects. Then the water, wastewater and electric infrastructure failures hit emergency levels and capital projects burgeoned. This year’s budget includes $52.6 million in capital projects, which is nearly 63 percent of the total budget. But staff has not increased much. Rather, turnover has increased, because the work load has greatly increased and the continual emergency responses required burn out employees.
After a year on the job, Whitehead received permission to change the organizational chart to create a public works director to ease his own oversight duties in the field for the water, wastewater, solid waste and electric departments. Bo Easely, once director of the electric department, is the public works director.
Whitehead told commissioners the final budget doesn’t reflect this new department, which is still being created. In the interim, public works will be run through the electric department’s books.
The budget pie chart shows 17.7 percent of the city’s $83.6 million budget is comprised of, “Business-Like Activities,” which are mostly public works–Bo Easely’s domain.
Their expenses and revenues are documented in “enterprise funds.” The city budget lists the following as enterprise funds: electric, water, solid waste, wastewater, airport and golf course.
Residents’ electric, water, solid waste and wastewater bill is the city’s primary interface with its constituents. It is what citizens see monthly, and is largely the basis of their judgments on city efficiency and service. Therefore I pay the most attention to these departments.
I find it concerning that each of these departments in the FY27 budget are estimated to spend more than they take in.
- Electric: revenue $8.2 million, expenses ($7.54 million) and net transfers ($864,000) totaling $8.4 million.
- Water: revenue $1.9 million, expenses ($1.158 million) and net transfers ($1.11 million) totaling $2.268 million.
- Solid waste: revenue $2.78 million, expenses ($3.52 million) and net transfers ($946,000) totaling $4.46 million.
- Wastewater: revenue $1.6 million, expenses ($1.28 million) and net transfers ($667,000) totaling $1.95 million.
The other two enterprise funds are not self-sustaining and are a big drag on the people’s pocketbook.
- Airport: revenue $140,000, expenses $507,000, of which the general fund (people’s tax dollars) will pay $285,000 to cover.
- Golf: revenue $34,000, expenses $273,000, with the general fund/people’s tax dollars paying $275,000 to maintain and improve that facility.
The people’s taxes, feeding the general fund, will, as usual, go into deficit spending, the hole being filled by utility fees, which I have decried for 20 years as taxation without representation.
- General Fund: estimated revenue, $7.2 million, expenses, $9.26 million.
Perhaps the electric department’s overflowing coffers will be tapped if estimated expenses cannot be covered by estimated revenues and deficit spending in the general fund.
Whitehead has mentioned during budget talks and the last city commission meeting, July 22, that the electric department has $6 million extra cash, and the city may use those funds as a bank, after first ensuring that all electric operations, maintenance, capital projects and debt are covered.
In prior articles, I said the city is charging too much for electricity, otherwise it couldn’t accrue that much money in less than three years. I have also said that the city should not seek to expand its utilities in an effort to make money off of its citizens. Instead it should seek to serve and benefit them, the sole purpose of government for and by the people. The final budget does not change my assessment that the city commission’s values, as reflected in the budget, are more mercantile than civic-minded. See:
A link to the budget is here: https://cms5.revize.com/revize/truthconsequencesnew/7-29-26%20%20Special%20CC%20Agenda%20Packet.pdf?t=202607281546070