(CNN) -- Still reeling from a scandal that claimed its former mayor, and potentially its former police chief and a village trustee, a small New Mexico border town is now without a police department.
Columbus, New Mexico, with a population of about 1,800, is in such financial disarray that the town is not even sure how much it owes, current Mayor Nicole Lawson told CNN.
Whatever that amount is, she said, "we don't have it."
The sudden drying of the town coffers meant that Columbus, situated across the border from Puerto Palomas, Mexico -- a town known to be a staging area for drug cartels -- had to fire its six-person police department.
The decision to do away with the department "was based on the financial crisis we are in," Lawson said.
Columbus has not seen a spillover of drug cartel violence from the other side of the border -- where assassinations, decapitations and daylight shootings have been recorded -- but the influence of drug cartels has not been absent.
Among those fired from the police department was its former chief, Angelo Vega, who currently is behind bars while awaiting trial on charges of smuggling weapons, conspiracy and making false statements. He pleaded not guilty and remained on administrative leave from the department, earning a paycheck until the unit was disbanded.
Former Mayor Eddie Espinoza, Village Trustee Blas Gutierrez and eight others were also arrested in a federal raid and face the same charges.
Espinoza this week was the first to plead guilty to the federal arms-smuggling charges. The plea agreement that the former mayor reached with prosecutors was sealed.
Because of financial mismanagement, federal grants that helped keep services running in Columbus are in jeopardy, and past funds may have to be repaid, Lawson said. The village is unable to provide proof of how the grant money was spent, and accountants are trying to save the town by figuring it out.
"We can't even provide documentation for anything that was done with that money," she said.
The town could owe $100,000 to the Department of Homeland Security, Lawson said, as well as $18,000 to the federal border protection program known as Operation Stonegarden.
Columbus is down to about $80,000 on hand, she said.
The accountants will try to get to the bottom of where the grant money went, and in the meantime, the current mayor said, "I'm not going to accuse anyone without proof in my hands."
The absence of a police department, will not make the village any more vulnerable to the drug cartels in Mexico, officials say.
Luna County Sheriff Raymond Cobos told CNN that his department will station a deputy in Columbus and will coordinate to have others come in when that officer is off. The goal is to get as close to 24-hour coverage as possible, he said.
"It's very vital for Columbus to have law enforcement presence," he said.
Also, a sizable Border Patrol presence in the area will remain unaffected.
"What I see from my perspective as sheriff is a mismanagement of funds and resources not just for one, but for several administrations," Cobos said.
Some residents also said that they were not afraid of being exposed to more risks without a police department and hobbled administration.
"I see things as OK. I think the village can rise above it," Martha Skinner, a bed and breakfast owner, told CNN. If Columbus goes bankrupt, it stands to lose its incorporation and to fall under the leadership of the county.
"It doesn't really matter to us who is in charge as long as we have water," she said.
Skinner's son, Addison Bachman, who owns a private website about Columbus, said that corruption and nepotism are long-running problems in the village. Several of the defendants in the arms-smuggling case are related.
The negative publicity about the scandal and financial troubles could cause further damage if it affects tourism, whose income Columbus is dependent on, he said.
Successes, such as the announcement that Sapphire Energy is building an algae plant in town that will create jobs, or that the port of entry is getting a makeover, stand to be overshadowed by the crisis, Bachman said.
"The irony about Columbus is that it is a wonderful place to live," he said. "You feel like you are in an oasis in the middle of nowhere."