County Budget Challenges

 

Jim Cox-SJC-CFO.- PHOTO-D. ALBRIGHT-TALON

After four agenda items, budget matters were the primary focus of the April 17, 2018, San Juan County Commission Meeting. CEO Kim Carpenter presented the first agenda item, 'Consideration of Proclamation Setting May 2018 as Motorcycle Awareness Month'. Commissioner/Chairman Pro Tem Jack Fortner commented, "I like this because the fact is---at some point---when oil and gas become in demand again, right...then people will start using motorcycles, and it is crucial that people become aware of motorcycles and their use". It was approved.

Larry Hathaway, County General Services/Community Development Administrator, presented 'Consideration for Award of Bid 17-18-02, for ADA Ramp Reconstruction in Flora Vista. The low bidder, by the substantial margin---about $50, 000., was TRC Construction of Flora Vista. Their bid was $127,476.46. Motion approved. Mr. Hathaway then handled item three: 'Consideration for Renewal Proposal 16-17-13, Life Insurance and Accidental Death & Dismemberment. Companion Life Insurance Company had "no rate increases" for their major medical coverage, which expires June 30 and "we have three years as option to renew", he stated, with his recommendation to the board that they renew with that company. It passed without debate.


Item 4, 'Consideration of Renewal of Bid 16-17-15 Re-Bid, Price Agreement for the Purchase of Asphalt Emulsions and Associated Products, was also presented by Hathaway. Holly Frontier Products and Marketing were 1-1/2 to 11% lower than the previous bids---because of the "New Mexico State price agreement". The total "will be about $305,000. for the coming year", Hathaway said. Motion was approved without discussion.

Item 5, 'Discussion of Budget Workshops', was CEO Carpenter's opportunity to address workshop scheduling and other major budgetary concerns. He said, "They'll need discussion of tax for EMS Department and Communications Authority, because we have reserves but in 3-4 years, there won't be any money left. Taxes are being overrun by expenditures---and without reserves the County would have to kick in 44%, Farmington the same and Aztec and Bloomfield---6% each. There's some belt-tightening that has to be discussed." He mentioned overspending of about $1.6 million of $2 million that could be voted on, but still the problem of "not gaining any ground".

County Chief Financial Officer, Jim Cox, said, "the largest driver is the capital needs" , specifically pointing to EMS and Communications Authority, as the keys to "depleting the reserve balances", to include Operations without separating between the two; "from a budgetary standpoint---it is budgeting at a loss". Chairman Margaret McDaniel asked him to "clarify who was spending over the million dollars". Cox answered, "It's a combination between Communications and EMS". McDaniels asked, "Is EMS is need of some capital outlay...?" As chairman of the EMS committee, CEO Carpenter said, "The bulk of the expenditures are coming from the Communications side"---that EMS had historically tried to be "very good about their expenditures". He said there's a "Significant need in captial, roughly four ambulances (two were purchased last year, but two have over 190,00 miles), some radios...and none of that capital is realized within what that tax is bringing in...because even in the operating side and some budget, there's still over-expenditure, and so...very difficult decisions are going to be have to be made".


Carpenter continued that as much as it's been talked about, "We're not getting the implementation of budgets that would match what the concerns are about the over-expenditure...meaning.. I'm saying this in a nice way---the bottom line is that you may very well be the 'body' that has to make the very difficult situation for the entities, more-so, the Communications Authority,...as to what is required". He said, "I don't want to discredit their budgeting, at this point in time...because they're being held hostage...to some Federal mandates" . He alluded to technology that's required, which "drives up the costs...but this is a challenge".

Dr. Carpenter also mentioned legislative changes and a lack of funding for "behavioral health". He said the County is bringing in about $4.5 million, but spending about $6.5 million, "so the reserves are the only thing that's keeping us going". He said, "we're going to have to have some intense dialogue...we know those costs are going to continue to climb". Regarding the 'Ambulance Tariff', Carpenter said since the State had done nothing about ambulance rates, the County hired an attorney to "push the PRC to create an increase in the tariff---that netted a few extra hundred thousand dollars, which was much needed because the tariff had not changed in years". He said that he and Mr. Cox are looking at a comprehensive audit and will look closely at spending at the hospital, seeking "good and prudent" business practices. Current tax, Cox confirmed, is generating about $4.3 million, which is a 1/8 county-wide tax.

County reserves amounted to as much as $12 million at one time, but in recent years have dwindled because of poor tax performance. Mr. Cox said the General Fund was not being used to fund EMS and the Communications Authority. The reserves are used. Carpenter said he's been monitoring the situation with diminishing reserves since 2013. He expressed that the best case scenario would be that the governing boards would "take up the deligence to look at this, but frankly, the buck stops with the County Commission".

Chairman McDaniel suggested that the next scheduled Commission meeting be preceded by a meeting to deal with the Communcations Authority, since the budget is due by second week of May. A decision was made to move the second Commission meeting in May---to the 22nd.

In the 'Report from the CEO', Carpenter mentioned the receipt of a letter from the American Correctional Association, which stated that Thomas Havel, Adult Detention Center Administrator, successfully completed requirements for a three-year extention of his Certified Corrections Executive title. There was no 'Input from the General Public and a 'Closed Executive Session' followed the meeting to deal with the 'PNM Matter and Receive Advice from the Commission's Attorney'.

 

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