Serving the High Plains
Serving the High Plains
City officials and two members of an accounting firm gave a status update during a special commission work session Wednesday on efforts to reconcile the city’s finances as far back as 2022.
City manager Paula Chacon said she, finance director Hallie Ferguson and Liz Martinez and Angelica Pacheco, client services managers of Mitchell, Beasley & Co. CPA of Las Cruces, have identified many deposits and credits, with only two debits they have been unable to find, from December 2022.
“I think we’ve made a lot of progress,” Chacon said. “We’re close.”
The city’s previous finance director, Rachelle Arias, resigned in August 2023. The city was without a financial supervisor for about four months until the hiring of Ferguson, who subsequently has said she was unable to keep up with the city’s books with the personnel she has.
Arias this spring was hired as director of business office services at Mesalands Community College.
The city in March hired Mitchell, Beasley & Co. CPA to straighten its books. The firm initially estimated it would need 80 hours to reconcile 13 months of bank records, plus 40 hours for quarterly reports to state officials and 20 hours of budget assistance. The first 140 hours would be billed at a rate of $150, with standard rates after that.
Based on that time estimate, the city would spend at least $21,000 to reconcile its books.
Martinez said the city at one point had about $700,000 worth of unreconciled accounts. The two CPAs quickly whittled that down to $400,000, and she said only about $50,000 remained to be reconciled.
When asked by Commissioner Renee Hayoz how long it would take to bring the city’s finances up to date, no one gave a forecast.
“We’re all focused,” Chacon said.
Pacheco, however, said she was confident they could reconcile the city’s books through March 2023 within a week.
“It’s going to take time,” she said. “We’ll get there.”
Commissioner CJ Oglesby asked how bad the financial snarl is compared to other municipalities that have experienced similar difficulties.
“I’ve seen worse,” Pacheco said. “It is fixable, but it’s going to take some time.”
In an illustration of the complexity of reconciling finances, Chacon talked about how auto drafts from several vendors didn’t match up with invoices. That was due to the vendors automatically applying small discounts to the drafts because they were paid early. Chacon said auto drafts have been halted until the finances are straightened out.
Concerned about finances, commissioners in recent months have delayed at least one large-item purchase — laptop computers for the police department — until they have a clearer picture of where the city stands.
Ferguson said after consulting with New Mexico Department of Finance and Administration officials, she uploaded a copy of last year’s budget as “a placeholder” for the 2024-2025 fiscal year, which begins July 1.
Ferguson said that budget has been accepted by the state, and it can be adjusted weeks later.
When asked what the city should do to prevent a similar situation from happening again, Martinez said the city should post bank transactions daily from what happened the previous day.
Chacon said the city already is doing that with deposits.
The city faces an August deadline to submit an amended budget for 2024-2025.
Mayor Mike Cherry asked: “Are we going to make that?”
Chacon replied: “We’re trying.”
In addition to its budget, reconciling city finances has taken on additional urgency because it could be rendered ineligible for state capital outlay funds.