Bloomfield looks to furloughs to deal with deficit
City manager and finance director plan to present revised budget with additional cuts at Bloomfield City Council meeting on July 26
- City officials originally identified a $475,000 deficit, but the projected budget shortfall has since grown to $826,000.
- Gross receipts tax revenue the city collected last month was the lowest the city has seen in a decade.
- The city is looking at mandatory furloughs, but to make up the deficit, employees would have to take more than 40 days off a year.
- City officials say the issue dates back to the economic recession of 2008, mainly due to personnel costs.
BLOOMFIELD — Facing a projected budget shortfall of nearly $1 million for the next fiscal year, the Bloomfield City Council tonight directed staff to look into mandatory employee furloughs, rather than layoffs, to save money.
“It’s better to take a cut rather than take home nothing at all,” Mayor Scott Eckstein said.
The city’s financial situation is worse than previously predicted due to dismal gross receipts tax revenue collected so far this summer. City officials originally identified a $475,000 deficit, but Finance Director Brad Ellsworth said revenue figures from June and the first part of July have pushed the projected shortfall to $826,000. He said gross receipts collected in June were the lowest in 10 years.
City Manager Eric Strahl said the city has cut about $360,000 through measures such as reducing operating hours at the indoor pool, but more work remains.
“We’ve addressed all the easy things,” he said. “Now we need to look at the hard decisions.”
But while councilors agreed furloughs were better than layoffs, the measures will likely still take a toll on employees. Strahl said a widespread furlough would save about $7,000 per day. At this rate, he said, city employees would need to take more than 40 days off a year to make up the deficit.
Strahl and Ellsworth said they will need a couple of days to develop the specifics of the furloughs. They plan to present a revised budget that includes those measures at the next City Council meeting on July 26. Ellsworth said layoffs will still be an option as the year progresses.
As the gravity of Bloomfield's financial woes emerged tonight, members of the audience questioned how the city could let itself slip into such a situation.
“I don’t wait until I’m in the negative to balance my checkbook,” Bloomfield resident Cecilia Gunnell said. “Why would you start so late in the game?”
Ellsworth said the shortfall became apparent in December, but the issue dates back to the economic recession of 2008. While gross receipts tax revenues stagnated due to a struggling economy, Ellsworth said expenses have increased, mainly due to personnel costs. He said the cost to provide employee health benefits has increased 8 to 10 percent each year.
During fiscal year 2015, personnel expenses for city administration and the parks department exceeded expectations by $16,000 and $29,000, respectively. As of May 26, administrative operating expenses for the parks department were $25,000 higher than budgeted for the fiscal year that ended June 30.
But while Bloomfield's situation may seem dire, some say it's not entirely unique.
In a phone interview before the meeting, William Fulginiti, executive director of New Mexico Municipal League, said many cities in the state struggle with predicting future revenue from the volatile oil and gas industry.
He said budget cuts are never popular, but Bloomfield is making the right decision by exploring its options.
“I think the city is making a prudent choice,” he said. “They’re not doing anything unusual.”
Brett Berntsen covers government for The Daily Times. He can be reached at 505-564-4606.