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Dec. 31: Sanjay Bhakta never imagined he would run for government.
Trained in India, Bhaka’s business career took him to West Africa, where he worked as an auditor. He crossed the Atlantic and worked in the textile industry in New York City before turning to hospitality, eventually leading him to Santa Fe, where his circle of relatives owns hotels.
Bhakta is the city’s outgoing monetary leader, a name he has held since Mayor Tim Keller took office in 2017.
He said he grew bored of the hospitality industry and wanted a change, and landed a job as junior auditor at the State Auditor’s Office. He quickly became an audit supervisor and then an audit manager. He then left that role and worked for the New Mexico Department of Finance and Administration, where he served as CFO. A few years later, in 2015, he became deputy state auditor for the State Auditor’s Office under Keller, who at the time was the state auditor.
But by the time you read this, Bhakta will have retired as the city’s chief financial officer. Friday is his last day of work.
The Journal sat down with Bhakta last week to talk about his role as the city’s chief monetary officer, how to deal with the COVID-19 pandemic when the economy shuts down, and what the long term holds.
This interview has been edited and condensed for clarity.
How did you get to New Mexico?
Originally, I’m from India. I started to work in public accounting in India while I was doing my master’s. And when I was 23, I got a job in Nigeria, West Africa, working (for) a manufacturing company. I became the internal auditor. So I moved from India to Nigeria in 1984. It was quite interesting — first real job I had with the home office in Europe, so a lot of travel, reconciliations and currency fluctuations and things like that.
And then I married my wife, who grew up in San Antonio, so I went to the United States.
I came to New York in 1988 and worked in a clothing company for about 3 years. And then my brother and I had our own hotel business for about 12 years, and then we looked to change. We were looking for another rhythm. We were looking to spend more time with the kids and family. That brought us to Santa Fe in 2004.
My family owns a few hotels in Santa Fe, but I got temporarily bored. My brother has been a success and he’s really smart at it. And you know, I struggled to find my position and I found this position. in the Office of the External Auditor. And I was very skeptical about that. Be a businessman. I didn’t think I could work for anyone, especially the government. But once I started, I thoroughly enjoyed it. . . In fact, I’ve made quite some progress temporarily. And it’s become an important race for me. “
Did you ever end up running for government?
Not even in my wildest dreams. One thing I regret is that I didn’t come to New Mexico when I came to the United States in 1988. Why did I wait until 2004? That’s the regret I have. . . I had no idea that I would end up doing something like this, that I would really enjoy it, and that I would do everything I had done in the past. But yeah, it’s been amazing. New Mexico has literally been smart to me and now is the time to give back in a way I haven’t discovered yet.
Can you describe what a city CFO does?How is it different from that of a corporate CFO?
Very different role. I think government is about helping to realize the vision of those you work for. In this case, it’s the mayor and his administrator (Tim) Keller. Making sure we have investments to meet the desires of the lives of the citizens of Albuquerque. . . Anything we need to do on a regular basis requires money.
And when it comes to government, its tax base is limited. The source of income you get from offering certain services is permits, but it’s usually taxes, whether it’s gross receipts tax or asset tax, and you don’t have much control over your source of income. You can’t just increase the value like McDonald’s increases the value of a hamburger.
This is a huge difference between the personal sector and government, where the personal sector can be competitive (and) at the same time supply greater facilities and goods and generate costs and revenues. For us, it’s living within (our) means. Because you can’t just raise taxes. There are checks and balances. Possibly they would have to raise the tax, but then that will have to be approved through the Council and then through the people. There is no need to impose additional taxes on people.
So manage your media and people’s lives within yourself, attracting the most productive talent. . . These are the unique demanding situations you face in government.
Overall, how would you describe your experience as the city’s CFO?
As soon as we arrived, we had to roll up our sleeves and start sticking to the budget. And we temporarily learned that we had a structural deficit on our hands, that we didn’t know about. And the mayor, his campaign, promised to increase the number of police on the streets and all the intentions were good, but how are we going to pay for that?We temporarily learned that it wasn’t literally sustainable, even with the number of people we had at the time. Will we be able to pay them more or will we be able to maintain the point of facilities we had?And that was the first challenge we had, pretty miserable to be fair because the mayor had promised that we would hire 1,200 cops. And there was no budget for that. In fact, there were several positions and we can say that yes, we have 1,200 positions, but how many of them were actually funded?So how do you locate the money? How can we provide at least a minimal living burden to existing employees?These are the difficult situations that Keller’s management has faced in the first two months.
So, what we did was we recognized and identified the structural deficit, that was the first thing we did. And then, instead of getting into political rhetoric and blaming the previous administration, we rolled up our sleeves and figured out the features we needed to do. compensate for that shortfall. And we had the opportunity to put in place what’s called an innocent component of the gross profits tax, which politically wasn’t a smart thing to do on the mayor’s part. But he learned that we are the ones who are putting this tax in position, that it is at our disposal. . . I don’t forget to speak clearly to the nine councillors separately and inform them, educate them, discuss with them that this was what we had in our hands.
I’m proud to say that not only myself and my finance team were able to convince the mayor, but we convinced the council and we had a 9-0 vote to implement that three-eighths of the gross receipts tax, which kind of saved us, not only from the structural deficit, but it added roughly $325 million to our revenues in the last six years.
We use most of that cash to focus on policing and hiring new agents. Nearly 80% of that cash went to surveillance and public safety, so we were able to give raises to other people. And you know that $325 million. . . They started with about $50 million in the first year and I think in the last fiscal year, we made almost $80 million as a component of those three-eighths of the gross receipts tax. . . It’s one of the first things I faced as CFO.
We also tried to kind of increase our revenue stream without being burdensome to the people. One of the things that we identified early on is the internet sales tax. So when you buy things from Amazon or Wayfair or any website, we didn’t get a penny out of that. The state was receiving some money. I think it was making it very unfair for our main street merchants that they have to collect the tax, but their competition does not have to collect that tax. So they did not have a level playing field when it comes to taxes. So we did lobby strongly with the state. And we prevailed. Ultimately, they gave us $6 million a year for internet sales tax. Next year, they gave us $12 million and we continue to fight and from 2022, we started to receive actual tax, not just a lump sum amount. The actual tax is kind of commingled with the retail gross receipts tax that we receive. However, we feel it should be anywhere from $25-45 million that we (will add) to our revenue stream every year since 2023. That is one of the major accomplishments as a CFO.
I’m referring to the COVID-19 pandemic, when the economy came to a standstill. What was that moment like?
It was one of the lowest points in my six years, at least the first six weeks. COVID hit us from sort of nowhere — there were no warning signs. Maybe there were but nobody paid attention. I was not paying attention. And all of a sudden everything closed.
And our bread and butter is basically the gross receipts tax. And when the economy just stopped and the malls closed and the restaurants closed, we were wondering how we would make the payroll. It was very stressful. For the first four to six weeks, I was working on different scenarios (like) how would we implement furlough? How should it be structured? Who would be most impacted? And we wanted to make sure that the people who are on the bottom of the totem pole got least affected. We had people who made minimum wage, making maybe $30,000 to people who make more than $100,000. And we wanted to make sure that whatever we did, we take that into account and minimize the impact on the people who make very little money.
So there were several scenarios that I worked on with guidance from the mayor. It was very depressing. And then we immediately did the hiring freeze. That’s the first and only thing we ended up doing. Luckily, what happened is that the federal government came up with the CARES Act, which gave money to state and local governments of a certain size. But there was a lot of uncertainty. We did not know whether we would get the money directly or whether the state would get it, and how the state would distribute that money. …When it comes to payroll, time is critical. You know, I need the money today because I got to make the payroll and how would we do that?
We were very lucky to have won the cash directly, as we were slightly over the limit of municipalities that would get the cash directly. That restricts 500,000 people. And I think our population at that time was maybe 540,000. So we were lucky. And we make the money very quickly. And thank God for the federal government. I think that without that we would be forced to implement very complicated measures, such as redundancies and perhaps even redundancies. I’m very proud that we didn’t have to take an hour off or that we didn’t have to lay anyone off. one out. We survived and came back pretty strong.
I have two more questions for you. The first is: what are you going to miss most about your work in municipal government?And second, what are your plans for retirement?
I think what I’m going to miss is, you know, when I leave the house, I start getting calls saying, “Hey, we have this challenge and how do I solve it? And I feel like you don’t. ” I want to get those calls, but now that I’m retiring, I feel like I’m going to miss those things. I think solving challenges helps us stay on our feet and helps us move forward without it. I hope I don’t get lazy. So I’m going to miss that action, that pace, that ongoing challenge of how to help the administration fund everything we want and how to meet those challenges. You know, look, find out where we can get more money and who we can marry? All of those things are rewarding on a professional level.
Also, I think, working with a team on a daily basis. You kind of become family to them. I will certainly miss that part.
In terms of what I’m going to do, I think I just need to be retired and that means everything a retired user does. I’m thinking of traveling a bit. I’m thinking of doing some reading and catching up with the family. I have a mom who is 89 years old and lives with me. So I make sure her last few years are the most productive and I’ll be there during Her. So that’s part of my retirement plan as well. And I also think that the ability to wake up in the morning doing nothing, it’s also a luxury. I’m ahead.
I joke with people that one of the first things I set out to do is to convert my mobile phone plan to a mobile client plan. But yes, I think I’m just trying to do nothing. I’m also kidding. Tell my friends that I have several certifications behind my name. And other people say you’re going to run out of area on the map. And I’m going to apply with another certification, it’s called CCP. And you. If you’re a journalist, I’m sure you’re curious. That means a qualified couch potato.
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