Farmington adopts preliminary budget
The city plans to deal with a nearly 11 percent drop in revenue from gross receipts taxes next year with spending cuts, a freeze on employee pay raises and possibly dipping into its cash reserves
FARMINGTON — The City Council has adopted a preliminary budget for the upcoming fiscal year, which officials predict will be yet another period of financial instability.
The city has budgeted for a 10.6 percent drop in revenue from gross receipts taxes, the main source of revenue for local governments in the state. To overcome the shortfall, Farmington's budget calls for spending cuts and a freeze on employee pay raises.
City Manager Rob Mayes said the city is also prepared to use up to $3 million of its cash reserves to fill financial gaps.
Councilors on Tuesday approved the budget unanimously, which Mayor Tommy Roberts said was an unusual level of support. He said many recent city budgets have met opposition, with some squeaking by on a single vote.
"It seemed to be a pretty smooth process this year," he said. "Maybe when you have less money, there are less things to fight over."
But while the process may have appeared uneventful, Mayes said that from a financial planning perspective, this was the most difficult budget to draft in his 10 years with the city.
He said revenue from the oil and gas industry has all but disappeared, and the future of the economy remains unclear. To promote financial stability, he said Farmington needs to continue to embrace the retail industry, which provides a consistent tax base for the city.
Although the budget must be submitted for approval to the state by June 1, the numbers are still subject to change. One of the remaining uncertainties is whether or not San Juan County will continue paying to use the Farmington Regional Animal Center.
The county has received a nearly 40 percent discount to use the shelter since the facility underwent a $4.6 million rebuild in 2013.
However, this year, city officials said they could no longer provide the subsidy and asked the county to pay $516,000 to cover the full cost of operations. The request spurred county commissioners to consider contracting solely with the animal shelter in Aztec, which has offered to take over the service for a lower price.
A final decision has not been made, but the county has included the full $516,000 payment in the preliminary budget it adopted on Tuesday. Farmington has also proposed a short-term contract with the county that includes a smaller, 20 percent discount for the next fiscal year.
"At least it represents some progress in reducing the subsidy," Mayes said.
Brett Berntsen covers government for The Daily Times. He can be reached at 505-564-4606.