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City
officials address cash shortfall
By
Fred Mramor of
the Desert Journal
“We’re
closing out the budget, seeing where we stand, and going from there,”
Ray Ortiz, Truth or Consequences Financial Manager, this week said is what
city staff is doing to address the New Mexico Department of Finance and
Administration’s concerns that the city may not have sufficient funds to
meet budget requirements for the next fiscal year.
Ortiz
said he and city financial staff have prepared most of the information
DFA’s Gloria Gonzales asked for in her July 27 letter to city
commissioners. He said city staff will now try to see how the city can
boost its ending balances and will make its recommendations to city
commissioners.
Ortiz
said nothing is definite yet but that city officials are not contemplating
cuts in city services or dismissing any employees to make up the deficit.
The city, both by its own decision and by order of DFA while the city is
operating under an interim budget, is under a salary increase freeze,
Ortiz said. With three employees, including Ortiz, in the city’s Finance
Department, the city has put on hold hiring a fourth until everything is
closed out, Ortiz said.
Ortiz
said city staff is trying to determine the cause of the shortfall while it
closes out its books. He said he expects to have last year’s books
closed out this week and submit the city’s FY 2001-02 budget to DFA next
week. Ortiz said computer problems that have contributed to the delay in
completing reports and the budget have been corrected.
Ortiz
said the city’s general fund doesn’t quite have one twelfth of
projected expenditures for this fiscal year but is pretty close and will
have the required amount by the end of this quarter. With projected
expenditures of $16 million for FY 2001-02, the city, to meet state
requirements, is supposed to maintain one and a third million dollars in
its general fund.
Ortiz
said he doesn’t think the city can transfer monies from other city funds
to supplant the utility and general funds where the shortfall of over
$500,000 appears.
“It’s
really not that much of a shortfall, it just shows up as a shortfall,”
Commissioner Jimmy Rainey said. Rainey attributed the apparent deficit to
the city’s past failures to apply for reimbursements from granting
entities after disbursing city funds on grant-funded projects. Rainey said
some of these grants go back as far as 1986.
Rainey
said the city’s general fund a month or two ago ranged from $6,000 to
$11,000 but by July 30 was up to $139,000 because some of these funds were
returning to the city.
“People
weren’t following the rules to get the money back in. That would be most
of the budget shortfall,” Rainey said.
Rainey
said also the city was out $470,000 last year to replace a burned out
transformer and couldn’t wait for insurance to pay for it. Rainey said
he isn’t sure if the T or C’s insurance provider has reimbursed the
city.
“Things
like that add up but it’s not really as bad as it sounds,” Rainey
said. “The finance people we have now are doing what they should be
doing. Hopefully this will all get squared away.”
“Right
now what we’re seeing is the end of a big mess,” Rainey said.
“It’s not all straightened out yet. We have to get a good handle on
getting our reports to Santa Fe on time. Things like that that have not
been neglected but have not necessarily been done in the manner that I
would like to have seen.”
Rainey
said the mess was “inherited” and that this is the city’s financial
manager’s first major job of this type. Rainey said he thinks Ortiz has
been overwhelmed with the immensity of the problem.
Rainey
said he believes Ray Ortiz was qualified for the job as the city’s
financial manager when he was hired two years ago but that he wasn’t
experienced in “putting out forest fires.”
“He’s
put out the effort to learn what he’s supposed to be doing and he’s
now doing it,” Rainey said. “He has the personality, and I really see
a bright future for him and the city.”
“We’re
trying to sit down and look at the whole thing and see where we are,”
Mayor Everett Banister said Tuesday.
“I
thought our budget was in pretty good shape and we look here and see that
it’s not,” Banister said.
“I
thought we had budget approval and we did have tentative approval. When I
called Gloria Gonzales she indicated to me that everything’s okay but
that we just need a couple reports and the city will get its approval.
Then here comes this letter. I told Gloria she didn’t tell me about all
these things that are now in her letter. But a lot of the things in the
letter seem worse than they are, a lot of that stuff is just that the
proper forms haven’t been done,” Banister said.
“Our
budget is awfully tight and the city commission is just trying to keep on
top of it and keep informed as to what’s going on,” the mayor said.
“We have some problems and we’ll deal with them in the open so the
whole city will know what’s going on.”
“The
city manager gave us a very tight budget this year trying to keep us from
using all our funds and pulling funds from everywhere. We knew we had a
tight budget and expect to have a tight budget for about three years until
we can get things straightened out. The administrative staff is taking a
hard look at the budget and seeing where we are exactly and where we can
save,” Banister said.
After
three years the city should be able to prepare “a little bit better
budget” as long as gross receipts taxes keep coming in as expected and
the city doesn’t spend too much on utilities repairs, the mayor said.
Banister
said he thinks Ray Ortiz is very qualified as far as his training and
education. He said it might have been better if the city had hired someone
with seven or eight years experience in managing a city’s finances but
that T or C would have “blown up” while it advertised for and selected
such a person.
“We
did a lot of emergency hires, maybe too many, but if any one was an
emergency, that was it,” the mayor said.
Banister
said he has a lot of confidence in Ortiz but that it will probably be two
or three more years before he “has his feet on the ground.”
Besides
the city’s past failures to collect grant funds - a problem she credits
Ray Ortiz for discovering - Commissioner Cookie Johnson said the city
having about 140 employees, when it had only about 110 employees two years
ago, may also account for the city’s budget problems.
She
said she doesn’t know if the city needs so many employees and thinks
city management should examine the question carefully.
“If
we were able to run the city for years with about 110 employees, we need
to know why all of sudden we have so many more,” Johnson said.
She
said, however, the city’s personnel roster may not be as inflated as it
appears since it includes part-time and seasonal workers such as
lifeguards. She said the city manager should prepare a current list of
regular, full-time employees.
Acting
City Manager Mark Huntzinger agrees that the city’s failures to recoup
funds from granting agencies has contributed somewhat to the budget
shortfall and said city staff is working on getting those grant
reimbursements.
The
difficulty, he said, has been in meeting grantors’ requirements so that
the city can get its reimbursements.
He
said work on older grants - especially locating necessary documents such
as canceled checks and vendors’ invoices - has been very time-consuming
for city financial staff but that they are nearly caught up.
He
said he doesn’t know if city staff prior to two years ago failed to
pursue grant reimbursements.
But
the greater problem than uncollected grant reimbursements, Huntzinger
said, has been that the city’s’ expenses have exceeded its revenues
and that as far back as he could see, every city commission has dipped
into savings to meet expenses.
“We’re
at the point where there aren’t enough savings to dip in to,”
Huntzinger said.
One
money-saving option Huntzinger said he’s considering is not filling some
city positions as they become vacant. He said that he will confer with
city department heads to determine what vacated positions the city can do
without for a year.
Huntzinger
said he would rather not say what some of these positions might be.
Huntzinger
said he is considering also denying grade promotions except for
“qualifications earned” for additional training a city employee may
acquire. The acting manager is considering also delaying any big ticket
vehicle and equipment purchases.
Huntzinger
said these options have yet to be formally presented to and approved by
city commissioners.
“No, it was getting done while I was city manager,” former City
Manager Evelyn Renfro this week said denying charges that many thousands
of dollars in uncollected grant reimbursements had not been pursued by
city staff before she resigned two and a half years ago.
“No,
no way. No one working under me was leaving that undone,” Renfro said.
“I
had heard that and I know it’s not true. Sharon (Roberts, former city
finance director) could tell you the same thing. It’s the expenses
they’ve incurred and the salaries they’ve implemented. I knew when I
left that the city didn’t have the kind of money to give the raises Isom
(recent city manager Sam Isom) gave and to hire the kind of people he
hired. It wasn’t there.”
“My
question has been where are they getting the money. They’re going to
have to cut back somewhere. Attrition (as proposed by Mark Huntzinger)
could be a real slow process,” Renfro said.
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City finds big fat check
By
Fred Mramor of
the Desert Journal
An
$85,000 check to the City of Truth or Consequences was found a couple
weeks ago in the city clerk’s office, Assistant City Manager Mark
Huntzinger said this week.
The
check was from the State of New Mexico, possibly a gross receipts tax
payment or some kind of reimbursement, was dated sometime in May,
Huntzinger said.
Huntzinger
said it appears to him that the check had slipped between a desk and a
filing cabinet and was found when the office was cleaned.
Asked
if the missing check had created any problems, Huntzinger said it was
money the city didn’t have. Huntzinger said it affected the budget in
that the check would have been credited to the city’s books last year
but instead it will be credited this year. “It’s a wash,” Huntzinger
said.
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