Home Local News More budget cuts may be needed in Lovington

More budget cuts may be needed in Lovington

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To solve its economic woes, the City of Lovington may have to make additional cuts after cutting staff and salaries.

Lovington’s Finance Director Gary Chapman announced in Monday night’s city commission meeting the city may need to make up additional funds. The city already passed a resolution to lay off employees, cut salaries, and cut operational expenses this month. The city’s budget cuts decided earlier this month added to approximately $1.5 million. This is based on the projection the city will lose $200,000 every month.

“The expenditures were clearly larger than the revenues (for the second quarter financial report),” Chapman said in the meeting. “They exceeded the revenues by over $1.9 million for the first six months of the fiscal year.”

Chapman announced the current second quarter financial summary is showing $328,000 in “excess spending” every month.

“It’s very important to understand that we may need to come back to the table,” Chapman told the commissioners. He later said, “I’m basically just laying it on the line and letting you know we are in bad shape financially. …We’re at the end of our rope.”

Commissioner Paul Campos asked Chapman in the meeting why the situation wasn’t made “crystal clear” before last night’s meeting. Chapman explained, “I like my job, I’ll stop it at that.”

“I can not control what gets on the agenda,” Chapman said. “You have to know that when we had our last DFA quarterly report I had an interest to give you more information.”

Campos explained commission meetings have staff reports which could have been an opportunity to report the issues.

“I’m not trying to be mean or anything here, the hindrance comes down to I care about the people I work with and I try really hard not to create an environment that would cause what we are in right now,” Chapman said.

In Chapman’s report of the second quarter summary financial report, he addressed three issues he sees. One was accepting the financial responsibility that comes with accepting grant funding.

“Quick comment because you said come out and state my issues,” Chapman said. “Why if you have a negative … balance in your general fund would you agree to get a grant and spend money that you don’t have.”

The capital improvement projects fund was in the negative by $120,000 on Monday. The reason is due to a grant-funded project the North Commercial Street project Chapman said.

“Having that grant did not cover all of its expenses, did it?” Chapman said. “So we are short $120,000. I want you to understand I have an issue with grants. I also have an issue with us giving away services that we’re supposed to pay for.”

Another issue Chapman addressed was certain city budget funds that should be “self-supporting” but have not been. Such as the wastewater fund which has a negative balance of $346,000.

“Why?” Chapman asked in the meeting. “This is a service that we charge a fee for. So clearly, I want you to know this is the third year I’ve been tracking this fund by itself, and last year we had to come up with $146,000 to supplement this operation. The year before we had to come up with $260,000 to supplement this operation.”

Years ago the commission passed a resolution to increase rates for these services slowly, Chapman said. The two percent annual increase is implemented every July.

Chapman explained now, even with reduced staffing, the city is looking at making up more than $200,000 for this operation.

“Aren’t we supposed to be charging enough money to cover all our expenses?” Chapman asked.

Mayor David Trujillo asked how an increase in gross receipts tax would make an impact on the loss. Chapman estimated an excess of $800,000 a month in GRT would be needed for the general fund alone.

“I’m projecting it will take us at least 18 months, possibly longer, to bring us to where we actually have a positive balance in the general fund,” Chapman said.

Trujillo said having a summary of the numbers and a full report of the numbers each month to make more informed decisions will be helpful for future decisions.

“We don’t want you to hold you’re tongue,” Trujillo said. “If we’ve start having issues or we feel we could have some in the future, we need to be notified because we need to plan and not work under crisis. I know currently, we are working under crisis and I don’t like working under crisis. Let’s make a plan as a team and move forward and we will overcome this.”

There is no special meeting scheduled as of Tuesday’s press time.

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