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The focus of this year’s budget hearings–which begin Monday evening–will take a sharp about face from recent years. No new requests for spending are on the docket. Staff will instead present a plan for addressing a projected $8.6 million reduction in revenues to the General Fund, a decrease of 13 percent from FY2013. Most of the shortfall is due to decreased spending at Los Alamos National Laboratory, the primary source of gross receipts tax.
“That’s really been the biggest issue we’ve been struggling with, is how we address the reduction in revenues, largely initiated by federal expenditure reductions. Obviously we’re in a situation where we have to reduce our expenditures based on reductions in our revenues,” County Administrator Harry Burgess said. “And we’re also looking toward the future, and what kind of expectations we have for future revenues.”
Staff received guidance from council in January on what steps they could take to meet the shortfalls. The proposed budget is a reflection of staff’s efforts to implement that guidance and conform to the parameters council defined.
The largest expenditure is in personnel costs.
“The direction from council was not to initiate any sort of reduction in force, but instead attempt to eliminate positions through attrition. And that has been a focus,” Burgess said. Seven positions have been eliminated in this way and Burgess anticipates staff will be further reduced by retirements in the future.
But this is not simply a matter of eliminating a position when someone retires.
“Since our job is service and our people are the ones who provide that service, we’re attempting to minimize the effect on our citizens by not initiating any strict reduction in force, because that translates directly into reduction of services,” Burgess said. “Through attrition we have initiated a number of vacancies and then looked at our organization and moved persons around internally to fill areas that were more vital to our production of services.”
That reorganization involves filling vacancies across departmental lines so that key positions are maintained and less critical ones are eliminated.
Temporary and casual labor may be hired to compensate for the reduction in FTEs (full time employees) to avoid reducing hours at public facilities such as the Aquatic Center and the Library, but there could be longer wait times for those facilities and departments such as permitting during high volume periods.
Council was also unwilling to completely forego salary increases for FY2014, which could have saved $800,000 a year. Staff is proposing a 2 percent increase, 1 percent less than in FY2013.
That will help offset increased expenditures for employees, such as a 1.5 percent increase in their contribution to their retirement plans mandated in the recent legislative session.
Burgess’s goal was a 10 percent reduction across the board. Some departments were able to exceed that goal and others, such as fire and police, were too critical to reduce that far.
“Our dispatch and detention have some minimum numbers we’re already limited by, so we can’t dip below those requirements,” Burgess said.
“Ninety percent of their budget is from personnel. So without doing a reduction in force, cutting from the remaining 10 percent leaves us with the personnel but without the money to put gas in the cars or provide citation books or even the day-to-day expenses of the building itself.”
The police department is implementing a volunteer program for some of its administrative functions (such as finger printing) to keep officers on the street.
Common reductions in departments include less training and professional development, stricter requirements for travel, fewer supplies and less equipment.
Other money saving efforts include:
• Deferring approximately $9.5 million in capital projects for four years so that money that would have been transferred to that fund goes back to the operational fund.
• Refinancing current debt at today’s low rates, estimated to save $735,000 annually.
• A 10 percent reduction in infrastructure spending for road budgets, park projects and information technology projects.
“Other more specific and ingenious ways we’ve saved some moneys will be illustrated during our discussion in budget hearings,” Burgess said. “Each director will have the opportunity to describe what they’ve done individually.”
The county’s foresight in setting aside reserves in excess of 25 percent beyond what is required by the state has forestalled additional cutbacks.
One of the reserves, the revenue stabilization fund, was created specifically to address fluctuations in lab spending. Policy requires that fund to be rebuilt to 5 percent of the total annual budget within three years, but council agreed to extend that to four years.
“So we have a healthy reserve to combat issues such as we’re facing now,” Burgess said.
“But because our budget process doesn’t look just at the present year, we wanted to set ourselves on a path that allows us to continue into future years without drastic changes.”
One thing that will not be on the table this week is increased revenues. Council was unwilling to consider any additional taxes this year, although they did leave that option open for the future.
The proposed budget may be accessed at the County’s webpage, losalamosnm.us. Copies are also available at the Mesa and White Rock public libraries, the 311 Customer Care Center (150 Central Park Square) or at the Office of Budget and Management (2451 Central Ave., Bldg A).
If council does not adopt a budget on April 17, adoption is schedule for 7 p.m. May 7 in council chambers.