Official: Cibola County facing prospect of bankruptcy
GRANTS, N.M. (AP) — A New Mexico county is facing the prospect of bankruptcy in 60 days and the likelihood of having to move forward with layoffs and liquidate assets, officials said.
Cash-strapped Cibola County is in “crisis mode” after years of overspending and the recent discovery that it sent a bounced check to the for-profit prison company CoreCivic, interim County Manager Valerie Taylor said.
The Gallup Independent reports that Taylor has contacted the New Mexico Department of Finance and Administration Local Government Division Special Director Michael Steininger to straighten out the finances.
Taylor said in all likelihood the state would bail out Cibola County with a loan and establish a repayment plan for the county if it can’t pay its debts
“If we do not make significant changes, I believe we are going to be insolvent by the end of February,” Taylor said at a county commissioners meeting.
The county overspent by $9.5 million from 2013 to 2016 and wrote the $7 million bounced check to CoreCivic in November.
The county has a contract with U.S. Immigration and Customs Enforcement to serve as a pass-through for payments to CoreCivic, which houses immigrant detainees at a prison in Milan.
The county receives money from ICE and in turn sends payments to CoreCivic using the federal funds. Taylor said the county had dipped into $5.6 million of the ICE money and was still in need of another $2.6 million to cover a shortfall from the November payment.
Since the check bounced, a separate account has been set up to make payments to CoreCivic, the newspaper reported.
The county also is liquidating $3 million from a money market account with the Bank of New Mexico. Taylor said she plans to recommend liquidating some county property.
“But that’s a very slow process,” she said. “It does not help us out in the short-term to cover a big debt, so we need to be looking at every dime.”
The financial outlook in the coming year appears bleak, with tax revenues down and the county already tapping its reserves.
“We just don’t have any funds. We can’t keep writing out checks,” said Commissioner Martha Garcia, who was sworn into the post last January. “Many people won’t like what’s going to be coming down, but we have to, because if we don’t, the county’s broke. And what happens after that?”
Information from: Gallup Independent, http://www.gallupindependent.com