Lea County staff propose permanent fund; commissioners review preliminary FY26 budget

County staff recommended the commission consider creating a local government permanent fund governed by New Mexico statute “6 6 19” and presented a preliminary FY26 budget at the May 8 meeting.

Staff explained that establishing a permanent fund requires two ordinances (one to create the permanent fund and one to create a government income fund to receive earnings). Using current estimates (a beginning cash balance example of ~$575 million and other assumptions), staff illustrated a maximum initial contribution in the neighborhood of $115 million under the statutory formula; two funding models were shown — a maximum contribution front‑loaded strategy and a levelized contribution strategy — with projected principal accumulation over eight years.

Commissioners discussed tradeoffs: staff emphasized that funds moved into a permanent fund would not be available for capital projects without voter approval, and that adoption would require budget adjustments to pull long‑term capital funds back into cash for transfer. Staff proposed bringing ordinances to the May 22 meeting for authorization to publish and a possible June 12 vote, with ordinances taking effect 30 days after adoption.

In the same meeting the assistant county manager presented the preliminary FY26 budget assumptions: 27 new positions beginning in July, a proposed 4% cost‑of‑living adjustment for employees, a projected total capital budget of about $366.6 million (roads, courthouse remodel, event center renovations among the largest items), and operating assumptions tied to oil and gas revenue scenarios. Staff said some grant‑timed purchases will require ratification after purchase in coming meetings.

Commissioners expressed support for the permanent fund concept while acknowledging it would reduce immediate capital availability; staff will return with ordinances, required budget adjustments and more detailed proposals.