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Rio Rancho board tables proposal to park up to 50% of permanent‑fund earnings as emergency reserve
Summary
Member Baker proposed reserving up to 50% of an annual permanent-fund earnings payout into a liquid emergency account; Director Carol Harnell said the city already holds nearly 30% in general-reserve funds (~$30M) and noted ordinance and policy steps needed. The board voted to table the matter to February for further study.
Member Baker proposed that up to 50% of annual permanent-fund earnings in a strong year be set aside in a liquid account to serve as an emergency reserve the city could draw on in a downturn. “What I’m proposing is that we could decide not to send it out to be spent. But take 50% and put it into, Wherever that would go,” Baker said while outlining a money-market style account to preserve access.
Director Carol Harnell responded that the city already maintains a large reserve and described policy and legal constraints. “The city holds currently almost 30% reserves in its general fund... that is something around $30,000,000,” Harnell said, and she noted the city’s reserve-policy guideline is 25% and that any change to the permanent-fund withdrawal rules would require a governing-body resolution or ordinance action; changes to the charter would require a voter-driven process.
Harnell explained mechanics in the existing ordinance: withdrawal timing is set for the first quarterly meeting of the calendar year, and earnings not withdrawn become part of the fund’s corpus. “Per the ordinance, any investments not pulled out becomes part of the corpus for purposes of calculating the earnings next year,” she said, adding that funds moved out of the permanent fund must be placed in another fund such as the general fund or a separately established special revenue fund, which would require distinct accounting and auditing.
Board members discussed trade-offs, including the potential for earmarking money for parks or public safety in a good year versus leaving earnings in the permanent fund to grow. Member Jablonski and others noted the board’s role is advisory: the board makes recommendations, and the governing body (city council) would accept or reject policy changes.
Member Baker moved to table the proposal until the board’s February meeting to research implementation steps and legal requirements; the motion passed on roll call (Chair Wainwright: Yes; Member Jablonski: Yes; Vice Chair Baker: Yes; Member Billups: Yes). The item will return in February for further discussion and possible recommendation to the governing body.
