County reviews FY2026 budget, manager warns of GRT decline; tentative approvals advance for multiple departments

County Manager O'Rourke and finance staff presented the county's proposed FY2026 budget during the April special meeting and budget hearings, outlining a projected drop in gross receipts tax (GRT) revenues that the administration said will require drawing on reserves and considering a quarter‑cent GRT increment for FY2027 to preserve long‑term fiscal stability.

The manager told councilors the county ended FY2024 with an unassigned fund balance of about $60,400,000 — roughly $17,000,000 higher than the prior adopted projection — but said more recent receipts and revised projections show a decline phase for GRT. Staff described two related variances: an updated projection that is roughly $10,000,000 lower than the FY2025 adopted amount and a roughly $14,000,000 decrease when comparing FY2024 actuals to the next projection. The administration's 10‑year financial model, as presented, assumes a quarter‑cent GRT increment beginning July 1 of FY2027 to restore long‑term sustainability.

Why it matters: GRT is the county's largest revenue source and the staff presentation framed the proposed FY2026 spending plan around a projected operating shortfall that would be covered by reserves while leaving the county above its 20% unassigned reserve target for the next two fiscal years only if the modeled increment is adopted. The manager's team showed a scenario in which, with the quarter‑cent, the county ends FY2026 with roughly $10,500,000 above the policy target; without a new increment, staff warned future guidance would need significant recurring spending cuts.

Public Utilities: projects, purchased power and proposed rate changes

The Department of Public Utilities (DPU) delivered the most detailed departmental presentation and the council engaged with staff on reliability, new generation, and rate proposals. DPU officials said the department has a 70‑megawatt solar plus an 80‑megawatt 4‑hour battery storage power purchase agreement with Foxtail Flats in active environmental review and anticipated commercial activity in mid‑2026 after an implementation delay.

DPU reported it used settlement proceeds to restore electric reserves and noted recently higher purchased power costs — which the presentation characterized as the primary driver of a roughly $4,000,000 increase in electric production expenses in the proposed budget. DPU staff summarized recent operational metrics: a system average interruption duration index (SAIDI) that improved to 15 minutes but has since returned to about 46 minutes following recent outages; a continuing tree‑trimming program to bolster reliability; completion of two DC fast chargers (municipal building and White Rock); and ongoing projects including San Juan generating station demolition and mine reclamation.

On rates, officials said previously adopted adjustments include a 6% water increase and a 5.5% gas increase; DPU proposed a 7% wastewater increase and a 9% electric increase for FY2026. In addition, staff noted time‑of‑use proposals are revenue neutral in the county's 10‑year projection. Councilors asked for further rate detail and comparisons to CPI and for clarification on planned electric vehicle fleet purchases and transformer lead times; staff acknowledged the need to return with more granular modeling during later hearings.

Public comment and contract oversight

At the start of the hearing a resident, Greg White (600 San Ildefonso Road), spoke during public comment about the Community Services Department's contract oversight. White said “the community services department is not capable of following their own contracts and the legal issues in the contracts and is not capable of properly inspecting work done by their contractors,” and urged the council to consider involving public‑works inspectors in future contract inspections. Councilors and staff acknowledged the comment and noted it will inform future review of procurement and inspections practices.

Votes at a glance (tentative approvals and roll calls)

Council took tentative votes on department budgets and budget options during the hearing. The transcript records the following formal tentative approvals (motion text, mover/second if given, vote tally and outcome):

- Approval of the meeting agenda as presented — motion by Councilor Reedy; second by Councilor Habenmann; recorded unanimous in favor. (unanimous)

- Approval of county council minutes for 04/08/2025 as amended — motion by Councilor Reiting; second by Councilor Veil Clinton; recorded unanimous. (unanimous)

- Department of Public Utilities: Tentative approval of the proposed Public Utilities budget in the amount of $107,289,835, including budget option items 6 and 7 — motion by Councilor Reedy; second by Councilor Herrmann. Roll call: recorded votes listed in meeting transcript produced a 7–0 approval. (approved 7–0)

- County Council: Tentative approval of the County Council budget in the amount of $445,212 — motion by Councilor Neill Clinton; second by Councilor Hand. Roll call recorded the motion passed 6–1 (Councilor Regor recorded as opposed). (approved 6–1)

- County Attorney: Tentative approval of the County Attorney budget in the amount of $1,500,630 — motion by Councilor Reedy; second by Councilor Havemann. Roll call recorded the motion passed 6–1 (Councilor Regor opposed). (approved 6–1)

- County Manager: Tentative approval of the County Manager proposed budget in the amount of $25,393,200, together with budget option items identified in the packet (listed in the transcript as items 11, 13 and 14) — motion by Councilor Hahn; recorded roll call result 6–1 (Councilor Regor opposed). (approved 6–1)

- Administrative Services Department: Tentative approval of the proposed Department of Administrative Services budget in the amount of $22,432,928 — motion by Councilor Hannon; second by Councilor Neill Clinton; recorded roll call 7–0. (approved 7–0)

- Community Development Department: Tentative approval of the proposed Community Development budget in the amount of $17,971,077 — motion by Councilor Veil Clinton; second by Councilor Hammann; recorded roll call 6–1 (Councilor Regor opposed). (approved 6–1)

- Community Services Department: Tentative approval of the proposed Community Services budget in the amount of $33,154,153 and budget option items 2, 3, 4 and 5 — motion by Councilor Hammon; second by Councilor Hahn; roll call recorded 7–0. (approved 7–0)

What passed tentatively is not final adoption. Staff emphasized that the hearings are the starting point for assembling final motions and that any tentative adoption or tentative budget options will be rolled into the long‑range financial projections used for the final adoption actions scheduled later in the process.

What council asked staff to provide next

Councilors asked for more detail in several areas for later hearings and the final budget deliberations, including:

- A breakdown of risk management / self‑insurance fund increases and the health‑insurance claim drivers behind a multi‑million‑dollar rise in that internal service fund. - More granular Public Utilities rate modeling and the operational impacts of major purchased‑power increases, plus clarity on time‑of‑use timing and how it fits the FY2026 revenue assumptions. - Clarification on the economic development / housing funds: staff committed to provide clearer fund statements showing the carryover, encumbrances, and what has been transferred from CIP into the economic development fund, and to run scenarios showing what a recurring housing fund might look like (examples tied to GRT increments were discussed). - Additional detail and sample costs for proposed Community Services maintenance staffing and for the new public‑safety computer‑aided dispatch / records system (a multi‑year CIP item described as significantly larger than originally budgeted).

Next steps

The council recessed the meeting at 10:10 p.m., with the manager's team and department heads scheduled to return for additional department hearings and follow‑up detail later in the week. Staff said they will incorporate tentative motions into the summary of changes, update the long‑range financial plan, and bring refined scenarios — including the quarter‑cent GRT increment and the range of options the council asked to see — before final adoption.

Sources and attribution: All facts, motions, votes and direct quotations in this report come from the council's April special meeting transcript and on‑record presentations and public comment. Where direct quotes are used, they are attributed to the speaker as identified in the transcript.