The Artesia City Council on Aug. 11 adopted Resolution No. 25-3063 establishing a general-fund committed reserve equal to 45% of projected general fund expenditures for fiscal year 2025–26.

City officials said the action is intended to create a “rainy day” fund to give the city greater stability for emergencies and unexpected revenue shortfalls.

Finance Manager Jamie Murriya told the council that the policy is based on audited fund balances through June 30, 2024, and government finance best practices. Murriya said the city’s audited general fund balances totaled $14,277,195 and that staff proposes to increase the committed reserve from about $5.3 million to $8.387 million — 45% of the FY 2025–26 general fund expenditures of $18,638,741 — by reallocating part of the unassigned fund balance. Murriya said the move would leave roughly $4 million in unassigned funds for other uses.

City Manager Simeon said the measure is part of a broader effort to improve Artesia’s fiscal management after completing several years of audits and to reflect new, more predictable revenue sources, including local measures passed recently. The council’s finance committee (Mayor Taj and Mayor Pro Tem Trevino) discussed the proposal on July 29 and recommended the 45% target.

Council members praised staff for completing audits and preparing the policy. Council member Renato thanked the finance team and said establishing a reserve was a “huge achievement.” After a motion and second, the council voted 5–0 to adopt Resolution No. 25-3063.

Background and what the policy does: Murriya said the Government Finance Officers Association (GFOA) generally recommends a minimum reserve (commonly cited as two months of operating revenue, roughly 20%), but that best practice increasingly calls for tailoring reserves to local risk factors — revenue predictability, expenditure volatility and exposure to one-time disasters. Staff reviewed peer cities and found reserve policies ranging widely; the average among respondents was 39% but cities use different reserve structures. The council’s resolution creates a single committed reserve category to be reviewed annually as part of the budget process.

Murriya said staff will return later with recommended assigned-fund balance categories and other refinements. Mayor Taj and council members noted the importance of continuing to monitor finances and to retain the flexibility to adjust the policy in future budget cycles.

The council adopted the resolution by unanimous vote; no public opposition or formal amendments were recorded.