Pecos City Council adopts FY2025–26 budget; staff warns insurance premiums will rise

Pecos City Council held a public hearing on and then adopted the fiscal year 2025–26 annual budget, covering the general fund, water and sewer, sanitation/landfill, the criminal justice center and the municipal airport.

Assistant City Manager Heather Ramirez presented the budget and noted capital items including park improvements, City Hall renovations, water and sewer upgrades, landfill purchases (metal dumpsters and equipment) and airport lighting and terminal work. She also explained revenue sources: sales tax contributes roughly 42% of general fund revenue and property tax about 28%.

Ramirez told the council she had received the city’s insurance renewal late and that the insurer initially proposed a 36% increase; Ramirez said she negotiated that figure down and reported an incremental budget impact of $411,927.60. She asked council whether to absorb the increase in the city’s operating budget or pass some of it to employees. Ramirez said open enrollment begins Monday and Tuesday and requested direction so the broker could finalize plan materials.

Council discussed options including absorbing the cost for the coming year, sharing increases with employees, and the administrative complexity of differentiating contributions by employee tenure. Ramirez said the city’s plan historically was a recruitment and retention tool and that staff had shopped other plans but the current plan’s benefits could not be matched by many alternatives without reducing coverage.

Councilman Saldania moved to approve the fiscal year 2025–26 budget by resolution; Councilman Graham seconded and the motion passed by voice vote. Council asked staff to return options for how increased insurance costs could be allocated and for detail on benefit comparisons.