Bloomfield facing $750,000 budget shortfall

Hannah Grover
The Bloomfield City Council will meet Monday to discuss how to address what Mayor Scott Eckstein calls the worst financial situation in the town since he became mayor 10 years ago.
  • Bloomfield faces an estimated $750,000 budget shortfall.
  • The City Council will consider money saving options during a meeting Monday evening.
  • Efforts to increase revenues have been largely unsuccessful.

FARMINGTON — Bloomfield Mayor Scott Eckstein says the city's financial outlook is the worst it's been since he was elected to his first term in 2006.

The city is in the process of finalizing its budget for fiscal year 2017, which is due to the New Mexico Finance Authority by the end of the month. The City Council will meet Monday evening to discuss how to add revenue or reduce spending to address an estimated $750,000 budget shortfall.

The budget serves as a projection of the next fiscal year, and Eckstein said there are possibilities of more cuts later on or that the outlook could improve.

Officials say the cause of Bloomfield's economic woes is the decline in the oil and gas industries.

"The issues with the oil and gas industry have been deeper than the city anticipated and have gone on longer than the city anticipated," City Manager Eric Strahl said.

The city will look at money-saving options like employee health insurance offerings, furloughs, eliminating temporary or seasonal positions, and possibly closing the indoor pool during the winter.

Strahl said these cuts should help get Bloomfield to the point that it would eliminate the shortfall in revenue but will not provide a "cushion" in the budget.

The city's financial situation looks much different than it did a decade ago when residents voted in favor of a 0.25 percent gross receipts tax increase to help get a loan to pay for a new police station, as well as remodels on City Hall and the fire department. Eckstein said he doubts the residents would vote in favor of such a tax if asked today.

But the city is once again asking residents to vote on a gross receipts tax to help the fire department on Tuesday, Aug. 16. If approved, the tax would go into effect in January.

But Strahl said that will make very little difference in the city's new budget. He said the city would likely not see any additional money from the tax until March.

The primary reason for the tax would be to pay firefighters salaries, which have previously been paid through a federal grant. Strahl said the City Council would decide how to divide the revenues from the tax if it is approved.

Since the economy began worsening in 2008, the city has taken several steps to try to bring in more money, Eckstein said.

In 2014, it annexed 6,775 acres of land, hoping to increase gross receipts tax and property tax revenues. But the annexation did not bring in the anticipated amount of revenue. A newly completed assessment of the land means the city will receive an additional $125,000 in property tax in fiscal year 2017, according to Strahl.

Strahl told The Daily Times in May that the majority of businesses on the annexed land were oil and gas related and have seen a decrease in gross receipts tax. Meanwhile, the city no longer received the money the industries had paid Bloomfield for law enforcement and other services that the city provided.

Another attempt to bring in more revenue was the development of an industrial park located in north Bloomfield. The 78-acre industrial park broke ground in 2007. Then-City Manager Keith Johnson told The Daily Times in 2007 that the park would help diversify the economy because “oil and gas aren't going to be here forever."

Wagner Equipment Company, which is a dealership of Caterpillar heavy equipment, has since located in the park, and several other companies have purchased parcels in the industrial park, including the Pyramid Corporation, the 4Rivers Equipment Company and the Precision Fitting and Gauge Company. But Eckstein said he park has not met expectations in terms of generating enough revenue to diversify the city's revenue base.

Hannah Grover covers Aztec and Bloomfield, as well as general news, for The Daily Times. She can be reached at 505-564-4652.