We’re in a state of disaster yet we can afford $ 4.5 million for a police building?

You may want to attend the Truth or Consequences City Commission meeting on Nov. 15 to protect your pocketbook.

Do you think Governor Michelle Lujan Grisham will take pity on us and sign off on the city’s request to declare that T or C is in a state of “disaster” because of its “waterline infrastructure failure,” thus obligating the state to offer aid and funding to fix it?

This disaster resolution claims “local and private resources are insufficient” to fix the problem, that over 20 percent of the water pumped is wasted. (Last I heard it was 43 percent; why the change?) It also states that street flooding caused by failing water pipes is a public health and safety issue.

Another item on the agenda is a financial report that covers July 1 through Nov. 30, that is, this fiscal year so far. The disaster resolution’s claim there are insufficient local and private funds is supported by this document.

The financial report states general fund expenditures was budgeted at $7.4 million on July 1, but has now burgeoned to $8.5 million. The projected revenue at the beginning of the fiscal year was $6.2 million, but is now $6.6 million. This means the general fund was expected to have a deficit of $1.2 million in July, but the hole is up to $1.854 million now.

The city’s overall budget has a bigger hole. In July the projected deficit was $3.8 million. The current deficit projection is at $4.4 million, according to the financial report.

Also on the agenda, in stark contrast to the “disaster” declaration, is the public hearing on whether the city should issue $4.5 million in revenue bonds to pay to refurbish the old National Guard Armory into a police station.

Unlike other bond issues in which the city has placed it with a bank, that is the bank buys all the bonds and the city pays the bank off, the city is going to sell these bonds on the open market. That means the city has to pay about $35,000 or so to get a bond rating (from Standard & Poor’s or a similar firm). No doubt the rating agency will look at the general fund cash balance. Deficit $1.8 million, according to the city’s financial document. The worse the rating the more interest the city will have to pay. Is this really the time to get a bond rating?

Besides that, there are two things that appear to be snuck into the ordinance on the police building bond.

First, although Chief of Police Luis Tavizon and other police-department employees stated at last month’s city commission meeting that the bonds would be paid back by the .25 local gross receipts tax supposedly set aside for police salaries and recruitment, the ordinance to be heard states that the city’s total gross receipts tax revenue will be used to pay off the debt. The city’s total GRT is 1.225 percent.

A slew of debt is already being paid off from the revenue collected from the 1.225 percent, according to the ordinance. What the ordinance does not state is how much money the 1.225 percent brings in a year on average and how much goes out to pay off debt. If not enough revenue is there to pay off the debts, then the city is obligated to raise the GRT.

I would hope that the city commission would ask how much capacity is left in the 1.225 collected, but I doubt they will and I doubt the city staff knows, considering the burgeoning deficit. Spending is not controlled by the city commission; it all happens off stage by silent, unnamed actors. I say that after attending nearly every city commission meeting and all budget hearings over the last 4.5 years.

The city’s growing budget deficit seems to indicate there is no remaining debt capacity in the 1.225 city GRT. We are already spending more than we are bringing in.

Second, the $4.5 million in bonds to be issued will not just be used to refurbish the building. It will also be used to “refund” or pay off two loans. In 2006 the city borrowed $165,000 and in 2019 another $104,000 from the New Mexico Finance Authority. The purpose of the loans is not stated in the ordinance. The amounts given are only the principal. The interest is not given. The principal still owed on the two loans is about $65,000.

The city commission took about $800,000 from the police department’s .25 gross receipts tax fund to partially close the deficit gap in this year’s budget. This same source of funds is supposed to pay off the new police building? When the city’s deficit is widening as the fiscal year progresses? When the city doesn’t have enough money to meet its waterline “disaster?”

This looks like a prescription for increasing GRT and utility fees. And I bet Lujan Grisham is not going to take pity on us. She’ll see lack of planning and  bad city management, which are, indeed, likely to lead to disaster. But if she allows the state to take on T or C’s self-made disaster, she opens the floodgates to helping other mismanaged local governments.

TAGS

Share This Post
Kathleen Sloan
Kathleen Sloan

Kathleen Sloan has been a local-government reporter for 17 years, covering counties and cities in three states—New Mexico, Iowa and Florida. She has also covered the arts for various publications in Virginia, New Mexico and Iowa. Sloan worked for the Truth or Consequences Herald newspaper from 2006 to 2013; it closed December 2019. She returned to T or C in 2019 and founded the online newspaper, the Sierra County Sun, with Diana Tittle taking the helm as editor during the last year and a half of operation. The Sun closed December 2021, concurrent with Sloan retiring. SierraCountySun.org is still an open website, with hundreds of past articles still available. Sloan is now a board member of the not-for-profit organization, the Sierra County Public-Interest Journalism Project, which supported the Sun and is currently sponsoring the Sierra County Citizen, another free and open website. Sloan is volunteering as a citizen journalist, covering the T or C beat. She can be reached at kathleen.sloan@gmail.com or 575-297-4146.

Posts: 119

4 Comments

  1. Why, why, why do we keep electing commissioners who have no expertise or history of stellar performance on the commission and expect that things will get better. This, by definition, is INSANITY!!! Some in this town can afford this kind of elected irresponsibility but most of us can’t. An ignorant, complicit or totally unconscious elevation of incompetence will doom this town!!

  2. Add another potential public cost that of Renovating the now disused Lee Belle Johnson Center. The proposed “fix” is over $6,500,000 ( but that is for the entire community use not just a police department of fewer than 20)! Who comes up with this level of incomprehensible ridiculousness? Considering that the voters of T or C rejected the Armory renovation in a special election only 5 years ago when the price was a mere $3.2 million. It is beyond belief that the small problems of the City Official and City Employees Protective Service (T or C Police Department) should encumber the rate and tax paying residents with such a plan. Perhaps the prospect of another Special Election will eventually put this nonsense to bed. We can only hope that a bolt of reality strikes the commission who can turn down this proposal and unnecessary expense.

  3. I wonder if changing the structure of our city government to a city council rather than a commission with a mayor that had some clout could help solve the problem of a stagnant commission unaware or unable to solve the city’s current serious problems. Just wondering.

  4. Who wants to run for city government?! People with knowledge, time, and strength take one look at the last 20 years and say, “No, thanks. That is an impossible, thankless task.” How do you right a sinking ship? It is beyond me, though I do feel shame for not being more involved. I guess I try to do what I can within my specific skill set.

Leave a Comment

Your email address will not be published. Required fields are marked *

Comment Fields

Please tell us where you live. *

This site uses Akismet to reduce spam. Learn how your comment data is processed.