City council considers taking over Gallup Main Street after financial concerns
By Molly Ann Howell
Managing Editor
What began as a routine contract renewal between the City of Gallup and Gallup MainStreet soon became a debate over the nonprofit’s future after officials disclosed that the organization failed to file key tax forms and financial reports.
The question of when the city needs to fund Mainstreet by, quickly turned into a question of why the organization should receive any funds at all.
Shortly after Gallup MainStreet Executive Director Michael Bulloch sent the city his paperwork for a contract renewal between his non-profit and the city, City of Gallup officials learned of Gallup MainStreet’s reported financial trouble.
According to city officials, Gallup MainStreet hasn’t filled out 1099 forms for any vendors who have helped them with events over the past few years. 1099 tax forms are used to report non-salary income to the IRS.
During a special city council meeting Nov. 3, Gallup’s Chief Financial Officer Patty Holland aired her concerns about the future of MainStreet, and the possible consequences the organization faces for not filing the proper taxes.
“If the IRS were to audit this right now, they would charge 28% backup withholding on each and every one of those payments that exceeds $600, maybe even on all of them because they have to be reporting this as income to those recipients of those funds,” Holland said.
But Gallup MainStreet’s financial troubles don’t end there.
Any non-profit organization that makes $50,000 or more in a year is required to fill out a 990 tax form. The form helps the IRS gather information about non-profits and ensures they’re following tax laws.
During Fiscal Year 2025, the City of Gallup allocated $110,000 to Gallup MainStreet — $50,000 for the Leavitt Amp program, and $60,000 for general operation costs.
These financial concerns brought the city’s partnership and funding future with Gallup MainStreet into question.
Bulloch approached the city council with a presentation explaining what Gallup MainStreet does during the Oct. 28 regular council meeting. He also asked them to enter into a new contract with his organization for Fiscal Year 2026.
The non-profit works under the New Mexico MainStreet, and follows that organization’s guidelines. Based on their contract with the N.M. MainStreet, the city is required to provide a minimum of $52,750 to Gallup Main Street. But actually, according to the agenda item, Gallup MainStreet asked the council for $75,000.
During the Oct. 28 regular city council meeting, City Manager Frank Chiapetti Jr. said the city had three options for their new contract with Gallup MainStreet. Option one involved continuing to fund the Leavitt Amp concert series, which Gallup MainStreet launched in 2021. The city recently allocated Gallup MainStreet $30,000 for Leavitt Amp (FY 2026) through the Lodger’s Tax program.
With the already allocated, $30,000 in mind, the city would need to provide $22,750 to meet the $52,750 required threshold set by N.M. MainStree, or $45,000 for Bulloch’s requested $75,000.
Per the discussion agenda item, option two involves funding the $52,750 outright, and using $41,000 from the city’s charitable fund to pay the bulk of it. Additional required funding would come from other approved funding sources based on Holland’s recommendation.
Finally, the third option would be to simply not fund Gallup MainStreet at all.
So the question arose: Should the city take over Gallup MainStreet?
Chiapetti suggested the city take over the organization. Gallup’s Marketing and Tourism Director Matt Robinson said it would take him about a month or so to absorb the organization into the tourism department.
At the Nov. 3 meeting, Chiapetti said he spoke to the director of New Mexico MainStreet Daniel Gutierrez and asked him whether the city could take the reins. Gutierrez said he was open to discussing the matter.
City Attorney Dave Eason, Chiapetti, and Holland all assured the council that the city wouldn’t be liable for Gallup MainStreet’s past financial issues if it took the organization over.
After listening to the issues from city staff, the councilors expressed their concerns about Gallup MainStreet.
“I support MainStreet, it’s needed and wanted, but there’s just no way I can support taxpayers’ money being given to anyone who’s not in compliance,” Councilor Linda Garcia, Dist. 1, said.
Councilor Ron Molina, Dist. 4, voiced his displeasure over Gallup MainStreet’s financial situation.
“I’m not comfortable or happy with a lot of what I’ve heard today,” he said.
Bulloch told the council that whatever decision they ultimately made, it needs to be made by Gallup MainStreet’s meeting with New Mexico MainStreet where they would seek reaccreditation. That meeting is scheduled for Dec. 17.
The councilors ultimately decided they didn’t want to make a decision on whether to take over the non-profit during the Nov. 3 meeting.
They asked Bulloch if he could fix the non-profit’s financial problems before the Dec. 17 meeting. He said he would try his best.
