Saturday, June 14, 2008

Los Lunas tightens belt in its budget

Kenn Rodriguez News-Bulletin Staff Writer; krodriguez@news-bulletin.com

Los Lunas Times are lean for the Village of Los Lunas, as evidenced by the 2008-09 budget recently approved by the Los Lunas Village Council.

The slowing economy in the country has affected the village in terms of gross receipt taxes, leaving the village to deal with a slight overall budget shortfall.

The village's general fund is not taking a hit, as estimated revenues will come in at a little over $20.9 million while expenditures are at just under $20.1 million.

However, spending on capital projects will push the village to dip into its reserve fund in the upcoming year as the overall budget expenditures will hit just over $62.4 million while revenues are at around $56.9 million, for a shortfall of around $5.49 million.

The budget was approved at a special council meeting on Friday, May 30, so the village could submit the budget to the state for approval by the Monday, June 2, deadline.

Village Financial Planner Peter Fernandez said the village's capital projects, which total almost $8.2 million, account for the entirety of the budget shortfall.

"I'd characterize it as a tight budget, but one that does fit within our 20-year plan," he said. "We say tight in the respect that we're concerned about reoccurring costs that specifically fall in the personnel area."

Fernandez and Village Administrator Phillip Jaramillo said the village will not have to let go of any employees but was forced to not fill four positions that were requested by various departments in the village - one each in the fire, parks and recreation, police and judicial departments.

Fernandez said the village approved of one additional technical position in the Police Department.

Jaramillo said developments in the local economy have led to concern at the village offices.

"Our concern focused mostly on the fact that, for the last six months, gross receipts have been lower than what was hoped," he said. "Therefore revenues were tighter, and that's why we had to be conservative, especially when we put these numbers into the 20-year plan."

Fernandez agreed.

"It's a reflection of the national economy," he said. "We do have growth, but it is a lot lower percentage-wise than in past years."

Jaramillo said he hoped the belt-tightening in the 2008-09 budget would help avoid further budgetary restraints in the future.

"The key there is we're also trying to make sure we look to the future, so we're being a little more conservative in our budget this year," he said. "We're doing that with the idea that if this economic trend continues then next year might be a little more difficult. So we're thinking 'Lets not make it worse.

"If there is a recovery next year, we'll be in really good shape, and if there's not one, then we won't be in really bad shape because we kind of got our expenditures lower," he said.

"The big key is keeping an eye on those so that, down the road if you need to make an adjustment, you can easily make the adjustment and not have to worry about going into the reserve," Fernandez said. "We're making decisions now so that, in future years, we don't put ourselves in that position, we believe."

Both Jaramillo and Fernandez said the current slowdown in the housing market is doubly affecting the village as impact fees for new homes are down as are gross receipts taxes for building supplies.

Jaramillo said many financial experts are predicting that the economy will begin to rebound in 2009. He said that shoring up the local economy is a key.

"Gross receipts for us is our lifeblood, and that means our businesses have to do well," he said. "So we have to make sure people spend their money here and take advantage of the businesses here. So they have to support small businesses here and help keep them alive.

"Second of all, we need to continue to bring in jobs. Obviously, with that, when people make money, they'll spend it in the community," he said. "So that's another key."

Jaramillo and Fernandez said they expect to have the final budget back from the state and ready for council approval by Thursday, July 31.

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