San Juan County manager warns budgets cuts will not be sustainable for more than a year

AZTEC — San Juan County Manager Mike Stark warned the County Commission that cuts made to balance the county's budget are not sustainable for more than a year and, if revenue comes in below the budget projections, the county will face some tough choices that may mean cuts to some programs or services.

The county froze vacant positions, relying on cash reserves and other measures to balance budgets for Fiscal Year 2021.

Bloomfield, Aztec and Farmington this week also approved final budgets for the fiscal year that started July 1. These budgets all anticipate a reduction in revenue.

The Aztec and San Juan County discussions can be viewed on YouTube and the Farmington City Council meeting can be viewed at fmtn.org.

Meetings roundup:Local governments set to discuss fiscal year 2021 budgets

Municipal budgets are 'living documents' now

The ongoing COVID-19 pandemic has created uncertainty for those drafting budgets this year.

Bloomfield City Councilor Ken Hare described the Fiscal Year 2021 budget as a living document that will likely face changes throughout the year.

“We don’t know where we’re going to be six months from now,” Hare said.

Meanwhile, San Juan County projects about $98 million in revenue in the upcoming fiscal year. Stark said the budget projects a 16% reduction in gross receipts tax revenue and a 40% reduction in property tax revenue from oil and gas equipment and production.

The county is saving $2 million by freezing 27 positions that are currently vacant. It is also using cash reserves to balance the budget.

“We’ve got a one-year fix in place,” Stark said, but he said the county needs to start planning for Fiscal Year 2022 now.

Stimulus measures staved off some revenue drops

The Farmington City Council approved a budget projecting 20% less revenue from gross receipts tax revenue. City Manager Rob Mayes said over the last four months the gross receipts tax revenue has been down 10%.

However, Mayes said he thinks the gross receipts tax revenue, which is similar to a sales tax, has been artificially propped up by the extra $600 a week in unemployment benefits that the federal government was providing, as well as the stimulus checks that were sent out.

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It is unclear whether there will be a renewed flow of extra money from the federal government to supplement unemployment benefits, as a renewal of those $600 emergency payments is a hot topic in Congress.

Farmington anticipates $225 million in revenue and $269 million in expenditures. The city’s estimated cash balance at the beginning of the fiscal year was nearly $121 million. It projects that it will end the fiscal year with $107 million.

Aztec is looking at $21 million in revenue and $29 million in expenditures, leading to a more than $8 million shortfall that had to be balanced using cash reserves transfers.

Bloomfield is looking at a $6 million budget for the general fund. Like other entities, it is looking at cash reserves to balance the budget.

One of Bloomfield’s most controversial decisions was choosing to keep the Bloomfield Family Aquatic Center closed until further notice. Hare said the city pays $600,000 a year to operate the pool. He said keeping the pool closed could prevent the city from having to make cuts elsewhere, including potential layoffs in departments like the police department.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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