The Artesia City Council averted a potential budget shortfall at its annual Cloudcroft retreat last weekend, placing a project that’s been in the works for some time on the back burner in order to avoid more potentially impactful cutbacks elsewhere.
The council made the decision to postpone construction on the City Hall Annex planned for the lot directly east of City Hall behind the Landsun Theater. The purpose of the annex is to consolidate city departments currently operating in different locations, and while the delay came as a disappointment to city employees looking forward to the increased efficiency, the effect on the budget was too significant to bypass.
The council had planned to begin seeking bids for the $5 to $6-million project Aug. 1.
“It would have required us to add $3 million to the budget, which last year, we did,” said Mayor Phillip Burch. “We put $3 million in the bank last year, and we were going to put $3 million in the bank this year.”
However, once the council noted prior to the retreat that Gross Receipts Tax (GRT) revenue for the months of June and July was below the expected amount, finding a way to balance the 2015-16 budget became the priority of the retreat agenda.
“We would have been $2 million more in the hole had we said we were going to continue (the annex project),” Burch said. “And that was the biggest project out there that we could impact the budget with. We simply said we are not going to do it, and we’ll put that on the shelf for a year.
“If at mid-year we see that the revenue stream has returned to what we had anticipated it was going to be, then we may rethink that. Otherwise, we’ll look at it a year from now.”
For the budget to essentially dominate the weekend’s proceedings was unusual, but considering local economic factors, it didn’t come as a great surprise to the councilors.
“Over the last six or eight years when we would go to the retreat, the budget was always talked about, but normally, it was pretty easy to deal with because our revenue stream was strong, the projects that we had planned out were getting done and getting done on time, and the funding was there to do them,” Burch said. “With the downturn in the oil and gas business, we are starting to see the Gross Receipts Tax, which the city operates on, start to pull back a little, and so quite frankly, we were faced with a situation where what we ran on last year, that revenue wasn’t sufficient this year.”
With a total of $811,000 on department wish lists and a $53,000 shortage in operating expenses, the mayor said the council called on the city’s six department heads to determine what was necessary and what could be done without for the time being.
“Fortunately, we have six department heads that are very good at what they do and have a very good feel for what services are valued by the citizens and what services their departments need to provide,” Burch said. “They went to work, and about two hours later walked back in the room and had the budget resolved.
“We spent a couple hours reviewing their solution, and the council accepted their views on what they wanted to cut or move around within their own department budgets.”
The council also spent time discussing what its course of action would be should revenue continue to decrease, as well as its plans for the additional funding that would result if the opposite occurs.
“I think we ended it, as far as the retreat was concerned, with an understanding of what our plan is going forward this year.”
