In years past I was used to reporting on local government yearly audits in January, February or March at the latest. T or C didn’t turn in its audit late, yet it has not been made public yet.
Audits used to be easily accessible to the general public, but the New Mexico State Auditor’s Office has changed its audit search function to an insiders game. One can’t access audits unless your email address and password are recognized and everyone has to sign in instead of just doing a search and clicking on the document. I was not recognized and wasn’t allowed to create an account. My calls weren’t returned. State Auditor Joseph Maestas’ claim of transparency tarnished by the lateness of audits being posted, the website’s opaqueness and staff’s nonresponse to phone calls.
Maybe my phone call prompted the webmaster to make the audits more accessible. When I went back to the website today, I was allowed access to the city’s audit without signing in and without having a recognized account, but it was in a CSV format, which would require me to export it into an Excel spreadsheet. Why make it so hard for the public?
I submitted an IPRA to the city clerk and that office responded promptly–within hours–and said they still hadn’t received a copy of the audit from the auditing company, but were trying to get a copy. They succeeded, and fulfilled my request the same day. All hail the city clerk’s office, headed by Angela Torres, for its responsiveness and transparency.
The audit can be found at the end of this article.
Some general observations follow.
ASSETS/LIABILITIES
Fiscal year 2024 ran from July 1, 2023 to June 30, 2024.
City audits separate finances into two basic categories: Governmental Activities and Business-like Activities.
Governmental activities are not expected to be self-supporting and are mostly paid for by taxes. Roads, police, fire, city administration, library and parks are in this category.
Business-like activities are expected to be self-supporting through fees charged for providing that service. Unlike private businesses, the government is not supposed to seek to profit or make money off of its citizens. It is only supposed to charge enough to pay for operations, maintenance and needed capital projects. Electric, water, wastewater, solid waste, golf course, airport and swimming pool are in this category.
The city’s assets totaled $78.8 million, $31.1 million in the governmental activities category and $47.7 million in the business-like activities category.
All the city’s utilities together are worth less than $50 million?
Compare these asset values to the liabilities city residents are facing due to 60 years of neglect of its water, wastewater and electric infrastructure. Recent engineering reports on the city’s water and wastewater infrastructure estimate over $200 million in repairs and replacement are needed, all of them sooner than later.
Loans and grants for about $45 million in https://sierracountycitizen.org/whitehed-explains-next-four-water-projects/ water infrastructure projects have been secured and are scheduled over the next three and a half to four years. About $35 million of those project costs are grants and about $10 million are loans–which will go on the liability side of the ledger.
May the city’s luck continue in this three-to-one grant/loan ratio. That luck is recent–since 2024. Before that the city was averaging a four-to-six grant/loan ratio for water and wastewater projects from 2017 to 2023.
So, the city’s assets totaled $78.8 million. Its liabilities totaled $26.4 million. A three-to-one ratio, assets to liabilities. Not bad, in fact very good if compared to 13 major cities in a 2012 report:
BUSINESS-TYPE ACTIVITIES/GOVERNMENTAL ACTIVITIES
I don’t know about you, but I don’t want elected officials choosing winners and losers by subsidizing business-like activities with residents’ tax money. The golf course should pay for itself, in my opinion, as should the airport. The golf course cost city residents $314,000 in FY2024. The airport cost residents $354,000.
On the other hand, I don’t want elected officials picking winners and losers by taking utility fees to pay for what they favor either. Taxes should pay for governmental activities and utility fees should be churned back into the utility. That’s why audits separate the two categories, because the finances of each should remain separate.
The city has only stopped misusing utility fees since FY2022. Before that, for generations, the city transferred money out of the utilities to pay for the golf course, the swimming pool, the airport and who knows what. A confusing maze of “transfers” from the utilities to the general fund hid much of where the money was going.
The city’s desperation for government grants to fix the water and wastewater utilities has forced it to keep governmental and business-like finances separate. The USDA, before it would consider a grant/loan for the city’s wastewater utility around 2016, said the city could no longer keep a “joint utility fund” in which it threw all of the utilities cash together. Each utility had to keep its own books and thus its rates had to cover its operations, maintenance and capital projects.
Subsequent USDA grant/loans have further tightened bookkeeping and rate structures. T or C rates have increased greatly since 2017.
Water rates have gone up over 70 percent since 2019.
Wastewater rates have gone up 5 percent a year since 2017, which are compounded increases and therefore are about a 50 percent increase since 2017.
The solid waste fees went up 5 percent a year since 2017, but only for polycart customers and commercial bin customers, while the weigh-station customers paid the same rate established in 2013. Recycling was free. Polycart users ended up paying exorbitant fees that subsidized weigh-station customers and recycling. A recent rate study will make solid waste fees fair over a five-year period, but meanwhile polycart users will continue to pay more than their share.
The electric rates went up about a year ago, the increases designed to bring in $1.5 million more a year for neglected repairs.
Since we are captive payers, the city having a monopoly on electric, water, wastewater and trash services in T or C and the Village of Williamsburg, it is of interest how much cash is left over at the end of the year once operations costs are paid for. That cash has to pay for long term debt for long-neglected infrastructure replacement and repair.
FY2024 expenses charges for service money left over
Electric $6.24 m $7.47 m $1.23 m
Water $1.257 m $1.685m $ 428 k
WWater $1.523 m $1.31 m minus ($ 213 k)
Airport $ 686 k $ 224 k minus ($ 354 k)
Solid waste $2.269 $2.502 $ 233 k
Golf course $ 322 k $ 8 k minus ($ 314 k)
The minuses total $881,000, which is not good, the deficits probably being paid for by taxes, keeping the city’s historically smeary line between business-like and governmental activities still smeary. Smeary means non-transparent. Transparent books have clear cost assignments.
And what is going on with the wastewater department that it can’t cover its costs despite its increased rates? And despite major upgrades totalling about $15 million in USDA grant/loans since 2017?
And why has solid waste burgeoned to a $2.5 million department from a $1.4 million department in 10 years? Because it’s taking in tons and tons more waste at the transfer station from miles and miles around, overcharging its polycart captive-payers to subsidize this expansion. The $36 a month polycart fee is the highest in the state, maybe the whole country. This is not a service to benefit but to exploit T or C or Williamsburg residents, which will not be corrected until five years elapse, when the rate increases even out the under- and over- charges.
TAXES
The city’s 2024 fiscal year was good primarily because it was a banner year for gross receipts tax collections. The original budget estimated the city would collect $3.84 million but $7.335 million was collected. The reason was area construction–the New Mexico Veterans Home expansion, NMDOT roundabouts and I-25 exits 75 and 79 projects, the city’s downtown $10 million water project, among the most prominent.
That will not be true for FY2025, which is more than half over. The city only added $2.08 million to its total governmental funds in FY2024, so it spent over $1.4 million of the $3.495 million in un-budgeted excess GRT revenue.
But hey, the general fund, for generations, has been in deficit, the hole plugged with utility fees. Because the GRT was so great, the general fund had $7.8 million in revenues and spent $6.8 million, ending with over $1 million in the black. That’s a first for the city. Hooray.