Font ResizeLAS CRUCES - Mid-year budget adjustments approved Tuesday by the Las Cruces City Council turned out to be a mix of good and bad news.
The bad news: the budget for the city's current fiscal year had to modified to correct a projected $3.6 million imbalance caused by a decline in revenue and an increase in expenditures. The change in budget would drop city reserves to $13.9 million.
The good news is that the $13.9 million still remains twice as much as the minimum $6.9 million the New Mexico Department of Finance and Administration requires the city to carry as reserve funds.
"I guess I'd have to blame it on the economy," said Margarito Perralta, a Las Cruces mechanic. "With the economy in the toilet, everybody these days is finding out there's money they don't really have. It doesn't concern me too much; just as long as the city doesn't make it a habit of losing money like that."
But city Budget Director Dick Gebhart told the City Council that the state of the economy has nothing to do with the mid-year budget adjustments.
"The revenue drop experienced by the city is mainly due to timing, not the economy," he said. "Much of what caused this is a one-time experience that the city should not experience again."
Gebhart explained that when the city budget was initially adopted in May, the Las Cruces Regional Aquatic Center was anticipated to open in July. But the facility didn't open until early October, and an estimated $300,000 in fees city officials were hoping
Earnings on investments are about $68,000 less than initially projected, and the city is expected to lose another $53,000 from the sale of capital assets. In years past, the city annually conducted an auction of surplus merchandise. But Gebhart said the auction will move to an online event, and that will affect the city's "bottom line" of what's raised through the event.
Altogether, the city's projected expenditures are anticipated to be $3.4 million more than was initially budgeted. Among some of more conspicuous added costs are $125,000 for unemployment insurance, $131,000 more for retiree health care, and $500,000 for workers compensation claims.
While the budget revisions will leave the city with less reserve funds, the changes aren't expected to have a significant impact on city reserves.
"It is still anticipated that the city will continue to be in the neighborhood where reserves will be twice as much as the minimum required by the state," Gebhart said. The city is required to maintain at least 1/12 of its budget in reserve fund.
"The city's new minimum is $6.9 million, and with a revised ending budget of $13.8 million, we're right at that twice-as-much level. ... It's a good target to be aiming for."
Steve Ramirez can be reached at (575) 541-5452.
Budget revisions
•The projected ending balance for the city of Las Cruces' fiscal year budget is estimated to be $3.6 million less than initially forecasted.
•Because of a late opening, projected revenues from the Las Cruces Aquatics Center are down by about $300,000.
•Projected investment earnings are $68,000 less than budgeted.
•The city's collection of gross receipts taxes and property taxes have increased by $152,000 and $315,000 respectively.
