Note: This story has been updated to include the dates of budget hearings released by the city on Thursday.
SANTA FE – Santa Fe City Manager Brian Snyder on Wednesday released a proposed $82.3 million budget aimed at closing what city officials describe as a $15 million budget gap for the next fiscal year. The budget includes $5.3 million in spending cuts along with fee increases for parking and parks and recreation.
City spokesman Matt Ross cautioned that Snyder’s 106-page budget for the fiscal year beginning July 1 is just a proposal.
“Nothing is final. The governing body decides the budget, not the city manager,” he said. “The budget process up to this point has been exactly that, a process. … This is the beginning of a conversation. What we did today is release a budget that is balanced and eliminates the structural deficit. So as of today we now have a hard reference point for that conversation as we move forward.”
A key element of the proposal is the elimination of “bridging strategies” the city adopted to get through the recession years. The city has used money from the flush water division fund for years to pay salaries of some employees in other departments, including $3.8 million to close last year’s budget gap.
The money from the water fund in the proposed budget is reduced to $1.5 million, but the transfer is now characterized as a “franchise fee” to cover costs to general government that are related to the water system, such as street repairs after water line breaks are fixed.
“Operations for general government are funded only from the General Fund, ending the practice of shifting costs to Enterprise Funds to cover unrelated expenses,” Snyder wrote in a cover letter addressed to the governing body and to the “General Public.” The 2016-17 budget also assumes using $3.5 million of revenue above expenses expected to be left over at the end of current fiscal year in June.
The proposal calls for a $5.3 million cut in general operations, “primarily achieved through a 7.8 percent Assumed Attrition Rate” among city workers, although no specific number of job cuts is mentioned. Snyder’s proposal notes that salaries and benefits make up the bulk of the operating budget.
Specifically mentioned cuts are one position in the Land Use Department, two in the Finance Department, one in the Human Resources Department and the elimination of the director position in a restructured Housing and Community Development Department.
Snyder also wrote that a new directive calls for no longer approving management or supervisory positions “that oversee fewer than five staff.” Cutting operating hours at libraries and recreation centers are among the proposed programmatic changes.
Ross reiterated that there would be no layoffs. Snyder said the city intends to reduce other costs through efficiencies and collaborations, including possible partnerships with Santa Fe County in functions such as accounting and payroll, economic development through the film industry and at the airport; with Santa Fe Community College to provide training; and with the Regional Transportation District.
“We saw opportunities to eliminate positions and reorganize departments in ways that preserve service levels but lead to greater savings to Santa Fe taxpayers, greater collaboration among divisions, and more efficient delivery,” Snyder wrote.
And while the proposal addresses spending cuts, it also calls for increased spending in some areas seen as investments, such as $50,000 to fund an internal strategic planning effort and $30,000 to put toward strategic planning with Santa Fe County to identify other possible efficiencies.
Increases in fees for parking, parks and recreation, fire inspections, airport and land use development are proposed. Snyder’s cover letter says, “Downtown, we re-structured our parking fees at meters to be more business friendly and lowered rates at garages,” but his budget plan says higher parking fees are expected to raise an additional $1.25 million, in part to eliminate a $900,000 general fund subsidy for the parking division.
Ross said rates on surface lots and in other areas will be increased and that an improved collection effort and recent changes to parking fines “will help hit the target.” Details will be presented to city councilors next week.
Changes to the city’s short-term rental ordinance are expected to add $1 million in gross receipt tax and lodgers tax revenue. The amendments would eliminate Santa Fe’s existing but essentially ignored limits on the number of vacation rentals offered through services like Airbnb but are supposed to generate more revenue by increased enforcement of the tax requirements for lodgers.
The Water Division would be charged a flat fee of 4 percent of revenues, producing the projected $1.5 million toward eliminating the deficit. The other element of the budget framework approved by the City Council calls for a shift in the one-quarter of 1 percent municipal gross receipt tax allocation from the Water Division to the general fund, which won’t take place until next Jan. 1.
“We believe this budget’s balanced nature is a foundation to move forward,” Snyder wrote in his cover letter. “It stabilizes our finances enough to finally engage meaningfully in a Strategic Planning process, one that takes public input on services central to the city government’s role in the community.”
Thursday morning, the city released a schedule for budget hearings next week. They will be held from 9 a.m. to 3 p.m. next Monday, Tuesday and Thursday at City Hall.
“At each hearing, members of the governing body and senior staff will meet for in-depth discussions on each section of the overall city budget, with the City Manager’s Proposed Operating Budget for Fiscal Year 2016-17 as a reference point,” according to a media release.
“The past year working up to this point has been well-spent, in public discussions and meetings to set our priorities and develop the framework that got us this far,” added City Councilor Councilor Dominguez, chairman of the Finance Committee. “Now we’re starting from a proposal that is balanced, and institutes principles of transparency and best practices that put an end to some of the practices that developed during the recession.”