Finance director says Guadalupe faces at least $900,000 shortfall; audits could push gap to $1.7 million

The Guadalupe City Council received an updated financial briefing April 14 from Finance Director Martinez showing the city at 75% of the fiscal year with expenses approximately 71% expended and revenues at 66% of projected. Martinez said the preliminary, unaudited report indicates a current budgetary deficit near $900,000.

Martinez cautioned that after correcting accounting and audit items the deficit could grow to about $1.7 million. “We’re three years behind in audits,” he said, noting staff is reconciling accounts and that numbers remain subject to change as audits are completed. The director repeated that the figures are unaudited and preliminary.

Council and staff discussed causes: timing of real-estate-tax receipts, delayed development revenue from projects slowed by permitting and coordination with other agencies, and reallocation of restricted funds. Interim city administrator David Trujillo said the city must avoid drastic steps like layoffs where possible and suggested reassessing staffing allocations, revising the master fee schedule and aligning expenditures with available unrestricted revenue.

Council asked staff to return with a budget plan and options for cost savings and revenue strategies. Martinez and city staff said they are preparing more detailed reconciliations and will return with updated figures and recommended next steps in the budget process.

The briefing underscores immediate budget pressures that informed later discussion about potential temporary reductions in revenue (for example, the Route 1 payment) and the council’s direction to seek alternative revenue (including a potential cannabis tax) while protecting essential services.