County reserves take hit
Due to some unforeseen circumstances, Socorro County will be taking a bigger bite out of its cash reserves this year than anticipated.
“When we started the fiscal year, we knew we were going to have to dip into reserves by about $250,000, but it’s going to be closer to about $700,000,” County Manager Delilah Walsh said.
A large portion of the unbudgeted expenses is related to software upgrades.
“The estimate to upgrade the treasurer’s office software was about $120,000, but in order to integrate everything correctly with the budget and finance side, that was an extra $300,000 investment,” Walsh said. “The county manager’s office had to be on the same system — they had to be able to talk to each other.”
Other unanticipated expenses included $50,000 to the Sheriff’s Office for vehicles, and another $50,000 for unexpected air conditioning repairs last summer and repairs this winter to the roofing and gutters at the Socorro County Annex building.
“The last of it has been for communications and data infrastructure — servers, switches, lines, fiber, connections. That was the last of the money,” Walsh said. “It’s all a one-time outlay. We anticipate once everything’s in place to recover that investment over 10 years through cost savings. We’re getting more efficient.”
Cash reserves were at about $6 million before the $700,000 hit.
“The general fund budget is about $4.5 million, so we still have enough in reserve to cover an entire year if necessary,” Walsh said. “That’s why we’re not too worried.”
However, even after cutting the county budget by 10 percent over the past three years, revenues are falling short of expenses. With rising gas prices and increases to insurance premiums, there’s a good chance the county will have to eat into cash reserves again in the next fiscal year.
Walsh broke the news to the county department managers at a budget hearing last Thursday.
“I’ll start with the bad news,” she said. “The county assessor’s abstract only went up about $900,000, so basically revenues are flat. There’s no new money.”
The net result of a $900,000 increase in the assessor’s abstract is only about $8,000 for the county, which is just a drop in the bucket.
Property tax collections have increased, but the county is now at its maximum collection rate, Walsh said, so there won’t be a lot of help from that source.
At the same time, there’s been a dip in gross tax receipts revenue. Walsh said Socorro County has one of the lowest gross receipts tax rates of all the counties in the state, but the county commission has said raising it isn’t an option.
“A low GRT is good for construction projects, but there isn’t any private construction going on,” Walsh said.
Most GRT revenue currently coming in is from major highway construction projects that are scheduled for completion in the next year. GRT revenues are likely to drop even further when those projects are finished.
Rising prices at the pump mean fueling county vehicles will get more expensive. The county is budgeting for $4 per gallon of gas, but if it goes any higher, some departments, especially the roads department, will find it a big struggle to stay within budget. The Secure Rural Schools Act could provide about $300,000 more for the roads department, if reauthorized, but the U.S. Congress hasn’t yet acted on that.
“Again this year, we’ll probably have to budget more on fuel and utilities,” Finance Director Roberta Smith said. “Last year I know everyone increased (how much they budgeted for) those and we’re still way over.”
Smith said the county’s Workman’s Compensation insurance premium will increase from $233,000 per year to $273,000 per year, and health insurance premiums are also going up. The hidden costs of each employee position have to be factored into the equation.
“We’re asking all the department heads to try to anticipate things like temps and part-time and overtime,” Smith said. “That affects your budget a lot more than you think.”
Walsh said a big push was made last year to increase employee pay, but Socorro County employees are still only at 85 percent of what they should be making, compared to county employees across the state.
“Unless we get a miracle piece of income, the bottom line is, revenue is not going to change,” Walsh said.
The county does have untapped resources that could alleviate some of the difficulty.
According to Walsh, revenue could significantly increase if all the property in the county was appraised and accounted for, a task that falls on the assessor’s office to complete.
“Our assessor’s office has never completed a comprehensive reappraisal of the county. Therefore, there are improvements out there that are not appearing on the tax roles,” she said. “They’re about $45 million behind our assessment evaluations for the county.”
The New Mexico Property Tax Division’s 2011 evaluation of the Socorro County Assessor’s Office, released last May, found numerous problems. Among the documents the office failed to provide the PTD are audit reports and the assessor’s annual report to the county commission, a valuation plan, a listing of exempt properties, a listing of properties receiving a special method of valuation and any data on transferred properties.
The PTD said the county must be mapped and every parcel identified, and recommended that a countywide reinspection and revaluation of all properties should be completed “as soon as humanly possible.”
Walsh said the most recent evaluation should be released by the PTD shortly. However, she’s concerned because the base maps required by PTD haven’t been created, the annual report requested last year hasn’t been provided, and the assessor’s office has not responded to repeated requests by the county manager’s office for a copy of the valuation plan.
-- Email the author at firstname.lastname@example.org.