Property taxes on annexed land will not generate as much revenue as projected
BLOOMFIELD — The city's annexation of 6,775 acres of land last year will not bring in as much revenue as was predicted, Brad Ellsworth, the finance director, told the City Council during a special work session Thursday night.
That is because the numbers were based on a study from the early 2000s that had not included a pipeline assessment, Ellsworth said.
The city's preliminary budget included $750,000 in revenue from the property taxes gained through the annexation. The final budget, which was approved Thursday, projects that the city will receive less than $300,000 from property taxes on the annexed land.
One of the reasons Bloomfield chose to annex the land was for the additional revenue from the property taxes. While the town will not receive the amount it initially thought it would, "we are getting additional revenue," Ellsworth said after the meeting.
The final budget also includes additional money from gross receipts taxes generated by new businesses that will be opening here this year. Ellsworth said he expects at least "a couple hundred thousand more" dollars in revenue from gross receipts taxes because of the new businesses.
The city has three main improvements projects planned for fiscal year 2016 — landscaping the medians on U.S. Highway 64, an energy retrofit of city buildings and the installation of fiber optic lines.
Councilors approved a loan to pay for the fiber optic lines during the Thursday work session.
The city hopes to use loan money left over from the U.S. Highway 64 utilities project to help pay for the landscaping of the medians. But city officials do not know how much they will have to pay the New Mexico Department of Transportation for the project.
Teresa Brevik, the city's special projects manager, told councilors that the transportation department could actually owe the city money or the city may owe the department money, based on figures from various sources.
City officials will meet with transportation officials in August to try to sort out how much the city owes. Until then, councilors approved the budget with a condition that the loan money will not be spent on capital projects until the city knows how much it has to pay the transportation department.