Rio Rancho advisory board recommends reinvesting 50% of Permanent Fund distribution after reviewing strong returns

The Rio Rancho Investment Advisory Board on its quarterly meeting reviewed strong 2025 returns across the city’s Permanent Fund and recommended that the governing body reinvest half of the fund’s 2025 earnings. Chair Wainwright and staff heard a presentation from Deann Woodring, the board’s oversight advisor, and from Director Yara on policy changes and distribution recommendations.

Woodring told the board the Permanent Fund is diversified across domestic and international equities, real-return assets and fixed income; she highlighted that international equity allocations have driven strong year-to-date performance (presented as roughly 31% for the international sector) and noted that the real-estate/real-return component has underperformed but acts as a diversification tool. She said the fund began on Jan. 1, 2023, with $10,000,000 seed money, that small contributions followed and that no withdrawals have been taken from the corpus. A transcript correction recorded in the meeting clarified that a “small donation” in 2023 was $2,000 (not $2,000,000). Woodring reported unrealized gains and that the operating portfolio and bond proceeds are conservatively laddered with a large treasury component.

Director Yara presented proposed edits to the Permanent Fund investment policy to clarify terminology and to specify targets for real-return assets. Staff recommended adding a 5% target for real-return assets in the policy, clarifying that the New Mexico State Investment Council (SIC) provides pooled investment options for local governments, and specifying how performance would be tracked using consultant and SIC indices.

After discussion about capital needs (examples cited by staff included additional baseball fields, playground replacement and pedestrian-curb work) and alternatives for reserve design, the board considered options for handling the distributable earnings. Staff reported the Permanent Fund’s market value with SIC and that 50% of the 2025 earnings are governed by ordinance to be returned to the fund; the other 50% is available for recommendation to the governing body. Staff’s calculation of the distributable half was presented as $1,028,605 (50% of the earnings amount discussed).

Chair Wainwright moved that the board follow the staff recommendation and recommend reinvesting the distributable amount back into the Permanent Fund, and asked staff to model a possible two-portfolio approach (a portfolio A for the core Permanent Fund strategy and a portfolio B designed as a short-term cash/liquidity sleeve). The motion was seconded and, following roll call, the board voted to recommend reinvestment to the governing body. Director Yara and Woodring said the portfolio-B concept appears feasible but that any change that would alter withdrawal rules likely would require ordinance-level review and additional drafting.

The board also approved the staff-proposed edits to the Permanent Fund investment policy language clarifying pool/manager descriptions and performance tracking; the board’s motion to accept the policy changes passed by roll call vote.

The board asked staff to return next quarter with asset-allocation modeling that includes a cash component and scenario modeling to show how a cash sleeve or portfolio-B approach would behave in downturns. The board made no final ordinance changes at this meeting; the recommendation to reinvest will go to the governing body for final action.