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ALBUQUERQUE – Mayor Martin Chavez may not want to be a candidate yet, but his two opponents, Richard Romero and Richard “R.J.” Berry, have already been slamming him for what they say is a bloated city government.
Chavez seems content to let his top brass fight back for him, in this case the city’s Chief Administrative Officer, Ed Adams, and Chief Public Information Officer, Deborah James.
“Their allegations are laughable,” Adams told the Independent. “We’re in an election season, and they have to say something. But if they told you the truth, it would be nothing short of an endorsement for Mayor Chavez for mayor.”
The issue Chavez’s critics are raising is his use of property tax funds — which typically go to the capital program to maintain and build city infrastructure — for plugging holes in the operating budget. The Chavez administration has shifted these funds from the capital program to the operating budget three times in recent years — in 2004, 2009, and 2010.
Romero and former 20-year Albuquerque city treasurer Lou Hoffman, who signed on early as a Romero supporter, said last week that Chavez could address the budget shortfall by weeding out waste in city government, starting with the mayor’s office, which they said has grown disproportionately as it’s been stacked with political appointees.
Berry has also joined the fray, echoing these concerns.
“Now we’re all paying the price,” he told KOB Channel 4, “… and now bad decisions are being made to cover the tracks from the previous bad decisions, and it’s going to take some strong fiscal leadership to get us out of this mess.”
In reply to the criticisms last week, James pointed to the city’s Triple A Standard & Poor bond rating, which is the highest the city has ever received.
“Wall Street investment firms don’t have a political agenda when it comes to Albuquerque, so that says a lot about how the city is doing,” she said then.
But Hoffman isn’t buying it. In an email, he said a high bond rating means the city is doing well for investors but not necessarily for residents who depend on the city to maintain and build roads, parks, and other infrastructure funded by the capital program.
“Bond ratings speak to a bond holder’s ability to get paid, not to how well the debtor is serving the public interest with the money it borrows,” Hoffman wrote.
“Marty’s use of bond ratings as a surrogate for how responsibly he’s managed the city’s finances is a non sequitur – a smoke screen,” he continued.
Adams, though, said that a high bond rating leads to huge cost savings for the city.
“What he’s missing is that if your bond rating is higher, your interest rate is lower, and the amount you then save on debt payments is huge,” he said. “Our entire capital program is bonded. It’s like revolving mortgages. We pay off the bonds ending and bring on the next ones. We’re constantly paying interest on our capital program.”
The difference between a Triple A and an A bond rating is about one percentage point less in interest the city has to pay on bonds, Adams said, which for Albuquerque amounts to about $25 million saved a year.
“Because of our prudent fiscal management, we get to build 24 to 25 million dollars worth of more stuff — parks, libraries, fire stations,” he said. “That is extremely important, and its laughable how they want to minimize that.”
Hoffman countered that these savings don’t make the administration’s practices any more responsible.
“There’s no doubt the city is saving money on interest with the high bond rating, but that’s not the question,” he said. “The question is whether city government is operating on a trajectory that’s sustainable, savings on interest notwithstanding. The city isn’t living within its means.”
Adams defended the size of the city’s administrative staff, which he said is about 33 people in all, saying it was small compared to what they have to administer.
“It’s less than half a percent of the entire combined budget,” he said. “We’re managing a city with more than 500,000 residents, with 6,000 employees, and a billion-dollar budget. Find any company that administers a billion-dollar budget on a half a percent. I think that’s pretty darn sporty.”
Adams said that the administration is committed to moving the property tax back to the capital program as the economy recovers.
But if that doesn’t happen, the next capital budget — which goes to voters in 2011 — will only have about $120 million in capacity, rather than the $160 million being sent to voters this year.
