The city promises to do something with its latest study on pay and job titles
Santa Fe could be looking at a total revenue shortfall of tens of millions of dollars in all of its funds by the end of this fiscal year due to the economic fallout from the COVID-19 pandemic, Mayor Alan Webber said Monday at an online news conference focused on the state of the city's budget.
"GRT loss could be anywhere from $15 million to $21 million in four months, that could turn into a $46 million dollar revenue shortfall in all of our funds—a 12% decline," the mayor said.
For the general fund alone, the estimate is about $14 million.
However, the mayor says the numbers are rough, since the city only receives new revenue data every two months and will not receive new data until early June. The most recent data is from just before cases of COVID-19 were reported in New Mexico.
"Everything that we had done to prepare for this next fiscal year's budget has effectively been made irrelevant by the precipitous decline in revenues and the shutdown in economic activity across the country and in Santa Fe," Webber said.
The city must balance its budget and submit the 2021 budget by the end of the fiscal year at the end of June, he explained, noting the Finance Department will have to come up with the new 2021 budget "from scratch."
To make up for lost revenues, the city is making spending cuts as well as seeking federal and state relief funds.
The mayor announced an official hiring and spending freeze for all city departments with the exception of essential services. He said public health and safety continues to be the city's top priority.
The hiring freeze could save about $2.5 million, and the city hopes to save another $25 million it had already planned to spend in the end of this quarter by making cuts to budget items such as new office equipment and nonessential projects. It will continue issuing land use permits and will push forward the sale of city assets at market value to generate as much new revenue as possible, he said.
In the next few days, department heads will begin looking at changes to health benefits, cutting overtime and temporary employees, and other "personnel actions" that could add up to $700,000 in further savings, but officials have made no decisions just yet, said Webber. He did not deny that wage cuts could be part of the strategy, but assured that the city is looking at "all possible options" and that "any cut to employees would also apply to our managers and people who are in positions of authority." The mayor plans to take a 30% cut in his own salary.
So far, city employees who cannot perform their jobs due to the crisis continue to be paid and have been reassigned to other departments that have greater need, city officials said.
Possible benefits and personnel savings will be presented at a virtual city Finance Committee meeting at 5 pm Monday night.
Even with these measures, the city still needs to come up with another $18 million by the end of the fiscal year. Webber said he could consider the possibility of dipping into the city's rainy day fund, which consists of about $16 million, but will primarily look to make up the remaining difference by asking for state and federal funds.
Webber also noted that Santa Fe and other cities with a population of under 500,000 did not qualify for initial rounds of federal relief funding, but he plans to seek a portion of the $1.25 billion allocated to the state in the CARES Act, and will to introduce a resolution to the City Council that would formally ask Congress to allocate future funding for smaller cities.
"I don't think we can or should be asked to do this on our own. This is a global crisis, it's a national crisis, and to ask every city to find the savings that each one needs to balance its own budget independently makes very little sense as a national entity," said the Mayor. "The federal government has the power to run a deficit, cities are not in that position."
The city also plans to ask the state for GRT distributions from recently enacted internet sales act.
Heading into summer and what is usually the most popular tourist season, hotel closures and the cancellation of summer events such as Indian Market and Spanish Market mean the city is likely to face further significant losses in the next fiscal year.
