Dec. 31—Sanjay Bhakta didn't ever think he'd work in government.
Educated in India, Bhakta's business career took him to West Africa, where he worked as an auditor. He crossed the Atlantic and worked in the garment business in New York before going into the the hospitality industry, which ultimately brought him to Santa Fe, where his family owns hotels.
Bhakta is the outgoing chief financial officer for the city, a title he's 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 CFO. Friday was his last day on the job.
The Journal sat down with Bhakta last week to chat about his role as CFO for the city, navigating the COVID-19 pandemic when the economy came to a standstill and what the future holds for him.
This interview has been edited and condensed for clarity.
How did you end up in 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 that brought me to the U.S.
I came to New York in 1988. Worked in a garment business for about three years. And then my brother and I had our own hospitality business for about 12 years, and then we wanted a change. We wanted a different pace. We wanted to spend more time with the kids and family. So that brought us to Santa Fe in 2004.
My family owns a couple of hotels in Santa Fe, but I quickly got bored. My brother managed it and he's really good at it. And you know, I struggled to find my role and somehow I stumbled upon this job at the State Auditor's Office. And I was very skeptical about it. Being a businessman. I (didn't) think I can work for anyone — especially for the government. But once I started, I really enjoyed it thoroughly. ...I really moved up pretty quickly. And that kind of became a primary career for me."
Did you ever think you'd end up working in government?
Not even in my wildest dreams. One thing I regret is (not coming) to New Mexico when I came to the U.S. 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 and actually enjoy it, and forget everything else that I did in the past. But yeah, it's been great. New Mexico has been really good to me and it's time to kind of now give back in some ways that I haven't yet figured out.
Can you describe what a CFO for a city does? How is that different and similar to a CFO of a company?
Very distinct role. I think in government, it's about helping realizing the vision of who you work for. In this case, it's the mayor and the administration of Mayor (Tim) Keller. Ensuring that we have funding for the needs to make the lives of Albuquerque citizens better. ...Everything we want to do generally requires money.
And when it comes to the government, you know, you have a limitation of your tax base. The revenues that you receive through providing certain services, permits, but mostly it is taxes, whether it is gross receipts tax, or property tax — and you don't have much control over your revenues. You can't just increase the prices like McDonald's will increase the price of a burger.
That's a huge difference between the private sector and government, where the private sector can be competitive (and) at the same time providing better services and goods and increase the prices and therefore the revenues. For us, it is living within (our) means. Because you can't just increase the taxes. There are checks and balances. They may want to increase the tax, but then it has to be approved by the Council and then the people. You don't want to burden people with additional taxes.
So managing within your means and making the lives of people better, attracting the best talent. ...Those are the unique challenges that you have in government.
Overall, how would you describe your experience as CFO for the city?
As soon as we came in, we had to roll up our sleeves and kind of start working on the budget. And we quickly realized that we had a structural deficit on our hand, which we did not know. And the mayor in his campaign had been promising about increasing the number of cops on the street and all intentions were good, but how would we pay for that? We quickly realized that it's not actually sustainable even with the number of people we had at that time. Forget about hiring more people. Would we be able to pay them more or would we be able to maintain the level of services that we had? And that was the first challenge we had — quite depressing to be honest because the mayor had promised that we would hire 1,200 cops. And there was no budget for that there. Certainly there were a number of positions, which we can say that yeah, we have 1,200 positions, but how many of them were actually funded? Less than 800. So how do we come up with the money? How do we give at least some minimal cost of living raises to the existing employees? Those are the challenges that the Keller administration faced in the first two months.
So what we did is recognizing and identifying the structural deficit was the number one thing, which we did. And then rather than just going into political rhetoric and blaming the previous administration, we kind of rolled up our sleeves and figured out what are the options we have to fix this deficit. And we did have an option to implement something called a hold harmless portion of the gross receipts tax, which was politically not a good thing for the mayor to do. But he realized that it's either we implement this tax, which is available to us. ...I remember distinctly talking to all nine councilors individually and briefing them, educating them, discussing with them that this is what we have on 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 used the majority of that money to focus on the police department, hiring new police officers. Almost 80% of that money went to the police department and public safety. So we were able to give raises to people. And you know this $325 million — it started with roughly $50 million the first year and I think in the last fiscal year we got almost $80 million as part of that three-eighth of the gross receipts tax. ...That was one of the first things that I dealt with as a 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 want to talk about the COVID-19 pandemic when the economy came to a standstill. What was that time 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 are so fortunate that we received the money directly because we were barely above the limit of the municipalities who would get the money directly. So that limit was 500,000 people. And I think our population at that time was maybe 540,000. So we got lucky. And we got the money in a very timely manner. And thank God for the federal government. I think without that, we would have to implement some very difficult measures such as furloughs and maybe even some layoffs. I'm so proud that we did not have to furlough even one hour or we did not have to layoff anyone. We survived and came back pretty strong.
I have two more questions for you. My first is: What are you going to miss the most about working in city government? And secondly, what are your plans in retirement?
I think what I will miss is, you know, when I leave home, I start getting the calls about, 'Hey, we have this problem and how do I solve it?' And it feels like you don't want to get those calls, but now that I'm going to retire, I feel like I'm going to miss those things. I think problem-solving keeps us sharp and keeps us going and without that, I hope that I will not become lazy. So I'm going to miss that action, that pace, that continuous challenge of how to help the administration to finance something which we need and working through those challenges. You know, trying to figure out where we can get more money and who we can partner with? All those things are pretty rewarding professionally speaking.
Also, I think, working with a team on a daily basis. You kind of become family to them. I will certainly miss that part.
As far as what I will be going to do, I think I just want to be retired and that means whatever a retired person does. I think a little bit of travel. I think a little bit of reading and catching up with family. I have a mother who is 89 and she actually lives with me. So making sure that her last few years would be the best and I will be there for her. So that's also part of my retirement plan. And I also think the ability to wake up in the morning and having to do nothing — that's a luxury also. I'm looking forward to that.
I jokingly tell people I think one of the first things I'm looking forward to is to change my cell phone cell phone plan to consumer cellular. But yeah, I think I'm just looking forward to doing nothing. Jokingly, I also tell my friends that I have multiple certifications behind my name. And people always say that you're gonna run out of space on the card. And I'm gonna work on one more certification — it's called CCP. And you're a journalist, I'm sure you're curious. It means certified couch potato.
