Official: City budget deficit expected, but reserves greater than previous year

The city of Tucumcari's finances are "in better shape" for the fiscal year that ends June 30, fiscal 2013, than they were as fiscal 2012 drew to a close, Dennis Dysart, the city's finance manager said.

Dysart expects the city to close fiscal 2013 with a $143,000 deficit but with greater reserves in place than at the close of the last fiscal year. The deficit represents about 1.4 percent of projected $10.5 million in operating costs for the current fiscal year.

Dysart presented figures and broke down budget changes to the end of fiscal 2013 at a city commission workshop on May 14. At the same workshop, city administrators gave city commissioner a rundown of their $10.5 million proposed budget for fiscal 2014, which begins on July 1. The administration budget is subject to changes before the commission passes a final budget, which is expected in June.

Despite the deficit projected for the end of fiscal 2013, Dysart said, "we have more money in reserves than we did last year."

In the fiscal year that will begin on July 1, however, reserves are expected to shrink to about $207,500. This, Dysart explained, is due mostly to an expected use of reserve funds to cover an estimated $380,000 cost to prepare an additional "cell" at the Tucumcari Sanitary landfill to accommodate greater-than-expected trash collections. The recent addition of Santa Rosa to the list of users of the Tucumcari landfill means the landfill's first cell is filling up faster than expected, Dysart said.

The second cell will cover about 2.8 acres. The new cell will accommodate about four years of trash collections, City Manager Doug Powers said.

Dump fee revenues are expected to total about $277,900 for the current fiscal year by June 30, according to interim budget documents.

The change in landfill operating costs also accounts for most of the $407,200 deficit the city administration's budget proposal projects for fiscal 2014, which begins on July 1.

The projected deficit represents about 3.9 percent of total operating costs and 4 percent of the just over $10 million the city expects in revenues for 2014.

Next fiscal year's projected deficit combines a reduction of more than $173,000 expected in revenues with an increase of nearly $91,000 in net operating costs, compared with projections for the current fiscal year.

Tax collections, mostly from property taxes and gross receipts taxes, for fiscal 2014 are expected to decrease by nearly $124,500, or just over 2.8 percent, compared to this fiscal year.

Dysart said decreasing tax revenues has been the pattern of the past several years as economic activity in the county and the state has declined.

Gross receipts taxes have declined as some major construction projects have reached completion over the past several years. Those projects include construction of the new Tucumcari High School, the city's new wastewater treatment plant and Xcel Energy's new power generating plant.

Grant revenues, which are expected to total just over $1 million for the current fiscal year, are expected to drop slightly, by a little more than $58,000 to nearly $957,000 in fiscal 2014, a preliminary budget document shows.

Dysart said grant revenues have also declined in recent years.

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