Moriarty City Councilor Steve Anaya used a recent city council meeting to directly address mounting questions from constituents about the city’s financial management, requesting official updates on ongoing IRS issues and challenging the characterization of $5 million in allegedly unauthorized spending.
Anaya opened his remarks by referencing a nm.news report from July that stated Moriarty could owe employees $18,000 in back pay and thousands in IRS fines. The councilor said he has been fielding numerous questions from residents at grocery stores and the post office about the situation.
“I’d like to get an update on the IRS situation,” Anaya said during the Aug. 13 meeting. “In fact, I’d like something in writing that you could tell us what’s going on… if indeed it affects the employees, if it doesn’t, just so I can answer the questions.”
The IRS issues stem from years of payroll tax mismanagement discovered by City Clerk/Treasurer Deborah Liu, who took office in December. According to previous reporting, the city has been over-withholding federal taxes from employee paychecks and has been assessed multiple penalties by the IRS for improper filings.
Anaya also addressed a second nm.news report about $5 million being spent without approval on police and fire grants, but suggested the coverage may have mischaracterized the actual situation.
“I went through the [2023] audit pretty well,” Anaya explained to his fellow council members. “It sounds like there wasn’t budget… It wasn’t monies that were overspent or misspent. It was how it was budgeted, is what it appears.”
The councilor specifically noted that $3.1 million related to the fire department “all went through USDA, the money was accounted for,” suggesting the issue was procedural rather than involving missing funds.
According to the 2023 audit, the city spent over $5 million above council-approved budget amounts across multiple departments, including police, fire, sewer and federal grant programs. However, Anaya’s interpretation suggests this may have been due to budget adjustment procedures rather than unauthorized spending.
Anaya said that the 2023 audit received an “unmodified opinion,” which he described as “the best opinion that you can get” from auditors. This contrasts with the serious findings detailed in the 2022 audit, which identified fundamental problems with the city’s financial controls.
“From the ‘22 audit to the ‘23 audit, some of those findings that we had in the ’22 audit were corrected,” Anaya said, suggesting the city has made progress on previously identified issues.
The councilor requested that the city’s auditor appear before the council to provide direct testimony about the audit findings and clarify the nature of the reported problems.
“I think before people jump to conclusions, I want to get all the facts here,” Anaya said.
According to the audit report, Anaya was part of the process. The longtime city councilor joined Brandon Webb, who would be elected mayor later in the year, and acting City Clerk Jeanette Hendricks for an in-person meeting with the auditors on May 3, 2023, where they reviewed the findings and recommendations with the auditors.
Anaya also referenced the city’s media policy, which he found in the employee handbook after previously inquiring about it. The policy states that “the mayor or designated representative will make all official reports and announcements to the newspaper and other news media” and that “no employee is authorized to make such reports and announcements.”
The policy allows for disciplinary action against employees who fail to comply with the media restrictions.
Moriarty has struggled with financial management issues for several years, with auditors repeatedly warning about inadequate internal controls and risk of fraud or mismanagement. The city failed to submit required annual audits for fiscal years 2022, 2023 and 2024 on time, potentially allowing financial problems to persist uncorrected.
City Clerk/Treasurer Liu has described her role as “cleaning 20 years of fiscal irresponsibility” and has been working to implement proper financial controls since taking office in December.
The ongoing financial issues have drawn increased public scrutiny and questions from residents, prompting Anaya’s call for greater transparency and official clarification of the city’s fiscal situation.
