Albuquerque Mayor Tim Keller told business and community leaders Wednesday that the city is facing a budget deficit as gross receipts tax revenues fail to come in at the rate projected in the spending plan approved by the City Council earlier this year.
Keller said the budget for the current fiscal year, which began July 1, was based on 3 percent gross receipts tax growth.
“We’ve had 1.7 (percent). That’s what we’re looking at,” he said in his first speech to the Albuquerque Economic Forum as mayor during a breakfast meeting at the Indian Pueblo Cultural Center.
Alicia Manzano, interim communications director for the Mayor’s Office, told the Journal the current revenue shortfall is $10 million. The city’s operating budget is nearly $530 million. Manzano said the new administration is watching revenues and expenditures very closely.
Keller said in his speech that his predecessor “did a lot for infrastructure throughout our city,” but left the budget deficit, federal funding that has yet to materialize for the Albuquerque Rapid Transit project, a lack of “working capital” to hire needed police officers, and a new fountain on Civic Plaza that leaks.
“The last administration had some tremendous projects,” he said “… But also like any administration … there’s some unfinished business.”
Keller said the city has been using vacancy savings to fund infrastructure projects.
“So instead of fully hiring across city government, but also in APD … we take the savings at the end of the year and we move it to a special projects fund,” Keller said. “There’s nothing wrong with that at all. It’s a financial strategy, but it has now left us in a place where our budget keeps getting smaller.”
He also talked about the severe officer shortage the city is facing, noting that the city has about 800 officers, nearly 400 fewer than when he was in high school about 20 years ago.
“When 911 wait times are 90 minutes for nonviolent crimes, we have to get more police officers,” he said. “I know they have to be quality. I know we have to find money to do that, but we have to get more police officers.”
The city’s current budget allocates enough money to APD for 1,000 officers, but Keller said the department has had to pay lots of overtime, which eats into the budget.
“We’ve got to get more officers to fix that, but to hire more officers, we need more money,” he said. “… So we also have a working capital problem.”
He also told the nearly 200 who attended the breakfast meeting that he might be reaching out to them to take part in public-private partnerships, which could include things like asking for private funds to provide low-interest home loans or down payment bonuses to help recruit officers.
As for Albuquerque Rapid Transit, the controversial project that is transforming Central Avenue into a rapid-transit corridor with a nine-mile stretch of bus-only lanes and bus stations, Keller said it’s not fully funded. The project cost was initially pegged at $119 million but is now about $134 million.
The city is banking on $75 million from the Federal Transit Administration’s Capital Investment Program for the project, and the previous administration had told the council that the federal funding was on track and that the funding agreement should be in place by this past November.
A federal budget deal announced in May contained $50 million for the Albuquerque project, and former Mayor Richard Berry’s administration said at the time that he was expecting the rest to be awarded the next year, although it has been unclear when, exactly, the city would get the money.
“I’m telling you, straight up, we do not have the money from the feds,” Keller said. “It has been promised. It has been in the budget. The check has not been signed. We’re going in January to meet with them to get an update. We have to understand, as a city, to call it like it is, which is that all the homework was done. All the legwork was done, but we still need the check.”
The Federal Transit Administration told the Journal earlier this week that the ART project is in the Small Starts Project Development phase of the Federal Transit Administration’s Capital Investment Grants program and is undergoing internal review.
Keller said he has some ideas about how to pay for ART if the city is forced to cover the cost on its own, and it involves expanding ART to the airport to tap into the airport’s excess bonding capacity.
“I’m not really interested in the short-term notions of … expanding that on its own right; however, to pay for it we might have to drive it to the airport, but the good news actually about that is it should have gone there in the first place. And then you could take it to the Lobo games and the Isotopes games,” he said.
Keller also revealed that there’s a problem with the new fountain at Civic Plaza.
“If you drive underneath, you will see why there’s no parking underneath (in) the parking garage because the new fountain leaks,” he said. “So we’ve got some things to work on.”
Berry’s administration said in April that the old fountain needed to be replaced because it was leaking into the parking structure below Civic Plaza.
The new mayor also pledged to double down on economic development.
“For me, the name of the game is focus,” he said. “I want to use every economic development tool we have more, but I want to use it in a focused way to finally turn around things like the Rail Yards. To finish the rail corridor that some people I know are starting to invest in. … To finish these areas of town that need investment. We want to support all development, but if you want taxpayer money it’s got to be for a company that is scaling here, and it’s got to be for a location that has incremental economic multipliers. We’ll come up with the criteria and we’ll work with folks on this.”
Asked about his plans for Downtown, Keller said his administration is working on a Downtown crime program in which officers are actually in businesses, the equivalent of having mini-police stations.
“The other thing is the Rail Yards,” he said. “We have to finally do that, and I think the way to do it is to make it a Tax Increment District or an Enterprise Zone. So I’m going to get with the lawyers and figure out how to do that.”
Keller drew applause when he said the city needs to get past pointing fingers at others and instead focus on solving its problems.
“It would be very easy for me to stand up here and blame others also – past administrations, Santa Fe, governor, county, Rio Rancho,” he said. “I am going to try to not do that, and I am going to ask you to not do that either. We have to push past the ‘whose fault it is’ and the ‘why is there a problem’ discussion and actually get down to how we are going to address these issues head-on.”
He said he planned to advocate for the District Attorney’s Office, Bernalillo County and others for their needs, and he hopes they, too, will advocate for the city’s needs.
“I do believe we fundamentally have to come together and take responsibility for our future,” Keller said.