Santa Fe council approves $3.07M budget fix to reconcile Affordable Housing Trust Fund

Finance Director Emily Oster urged the City Council to approve a budget amendment Tuesday that will transfer $3,070,059 from FY2025 general-fund balances into a dedicated Affordable Housing Trust Fund account to match prior years’ budget authority with actual transfers.

“While the actual transfers into the fund for FY22, FY23 and FY24 were less than $3,000,000, there was budget authority during the fiscal year for $3,000,000 and the grants that were made from the Affordable Housing Trust Fund were fully funded,” Oster said, explaining that grants are operated on a reimbursement basis and some grantees did not expend their full awards in the year they were granted.

The reconciliation grew out of staff work over the past year to separate trust-fund activity from the Community Development Fund in the city’s Munis accounting system, Oster said. Attachment B to the staff memo shows year-by-year beginning balances, transfers and ending balances; it also lists three prior-year unexpired contracts totaling about $1.3 million that remain obligated through June 30, 2026.

Council members pressed staff on when city leadership learned of the absence of a separately accounted trust fund and whether the city manager and governing body had been advised earlier. Mayor-elect Michael Garcia (speaking as Councilor Michael Garcia) asked who had been alerted and when. “As finance director, I should have realized that there should have been a separate fund…much earlier than I did,” Oster replied and said she accepted responsibility for the timing of the disclosure.

Several councilors said the reconciliation was overdue but that bringing the problem forward and correcting it was the appropriate course. “We did what needed to be done to get to a balance,” Councilor Romero Worth said. She and the Community Development Commission said commissioners will review awards to ensure grant recipients have the capacity to spend their awards and that future awards match recipients’ readiness.

The council voted to approve the BAR. Councilor Michael Garcia recorded a dissent, saying he wanted more time to review remaining details; the motion passed on a roll-call vote.

What happens next: The transfer will be made in FY26 to resolve the difference between the amounts that had been allocated in past budget books and the amounts actually transferred into the account. Staff told the council they will present more detailed follow-up accounting and review contract expirations to determine which awards still require extension or reallocation.

Speakers quoted (selected): "There was budget available for $3,000,000 a year of investment in the Affordable Housing Trust Fund," Finance Director Emily Oster said. "The Community Development Commission made grants in the amount of $3,000,000 a year. But the grantees didn't always expend the full amount of their award in the particular fiscal year."