Berry appoints key Romero supporter to top position

Lou Hoffman with mayoral candidate Richard Romero at a press conference in May. Photo by Marjorie Childress.

Former City Treasurer Lou Hoffman was a vocal supporter of Richard Romero during Albuquerque’s mayoral campaign, but he’ll be the city’s new Director of Finance and Administration when mayor-elect R.J. Berry takes office Dec. 1.

Hoffman is a registered Republican, but supported Romero — a Democrat and arguably the most liberal candidate in the race — because he thought he’d be a good mayor, Hoffman told The Independent Monday.

“It’s non-partisan [city politics],” he said. “But I offered to support Richard before Berry was a candidate. … I thought Romero would be a good mayor, I think Berry has a chance to be a great mayor, and we need him to succeed.”

Hoffman was city treasurer from 1987-2006, and also served for a period of time as the Acting Director of Finance.

“Lou brings exactly what I want for this department. He has three decades worth of experience in finance management and is considered to be an expert in this field,” Berry said in a statement about his appointment of Hoffman. “Lou will help guide our city into a better financial situation.”

Back in May, Hoffman appeared at a press conference with Romero to denounce Mayor Martin Chavez’s handling of the city budget, in particular the transfer of property tax revenue to the operating budget in 2004, 2009, and 2010. The two charged that the city wasn’t living within its means, and that Chavez could start tackling the problem by eliminating political appointees in what they called a bloated city government.

The Chavez administration pointed to the city’s “AAA” bond rating in return, saying it showed how well his team had been managing the city’s finances.

In response, Hoffman said the bond rating showed that the city does well by investors, not necessarily by city residents. As The Independent wrote in the spring:

“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 [in an e-mail to The Independent].

“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.”

Diverting property tax revenue to the operating budget was something both Romero and Berry criticized throughout the campaign. Berry ramped up what became one of his signature issues in an August statement that characterized Chavez’s diversion of property tax as an attempt to hide deficit spending. As The Independent reported this summer:

Since 2005, Berry said, “Marty’s budgets have accumulated more than $196 million in recurring expenses over and above normal recurring revenues.”

Berry said in the statement that Chavez began transferring property tax revenues from General Obligation Bonds into the city’s Operating Expenses in 2004, and by 2006 city expenses exceeded revenues each year. And between 2003 and 2007, he said, Chavez grew city government by 50 percent.

Since 2003, he continued, total expenses over revenues have accumulated to more than $83 million, and $112 million in revenues that would have gone to capital projects like roads and parks “have been sacrificed.”

Hoffman told The Independent this week that the diversion of property taxes has reduced the city’s general obligation bonding capacity by about 45 percent, which reduces the ability of the city to finance capital projects in the long run.

But while it’s a concern, it’s too soon to tell what the Berry administration will do about the property tax issue at this point, he said, because you can only do so much during the transition period.

“One of the big glaring issues is how property taxes were diverted,” Hoffman said. “When Berry is mayor, these policies will evolve. There’s clearly a concern, no doubt.”

Hoffman also said the projected $12 million revenue shortfall for this fiscal year is “consequential, but not unmanageable.”