Alamogordo presents $162 million preliminary FY2027 budget; officials flag potential changes from union talks, golf course and capital carryovers

Finance Director Evelyn Huff presented the City of Alamogordo's preliminary fiscal year 2027 budget at a May 4 commission work session, laying out combined-fund totals, per-fund adjustments and next steps ahead of a May 26 preliminary adoption and a July 31 final submission to the Department of Finance and Administration.

Huff said the city began FY26 with $96.4 million in cash, was operating under a $162 million expenditure budget for FY26 and is proposing an FY27 program that reflects large capital carryovers rather than new operating growth. "So our FY26 projections our actual beginning cash balance at the beginning of FY26 was 96.4 million," Huff said, summarizing the work-session packet she provided to the commission.

Why it matters: Huff emphasized that much of the year-to-year swing is timing and capital carryover. Several large projects budgeted in FY26 are still in progress and will be carried into FY27; at the same time some revenue lines are being projected conservatively using a three-year average so the city does not assume unproven growth.

Key numbers and drivers

- Combined picture: Huff said the city's FY26 operating revenue was about $117 million with $162 million of budgeted expenditures (a negative net of about $44 million on the presentation recaps) and that proposed FY27 operating numbers were centered on a narrower operating footprint once capital timing is stripped out.

- Water rates: Huff confirmed the budget reflects an additional water rate increase due to take effect July 1. She said the rate schedule in place includes a 20% third-year step this cycle and that FY27 projections follow the approved rate study.

- Dispatch and cannabis transfer: The new local dispatch operation is budgeted with recurring subscriptions and staffing needs; Huff said the operating estimate for dispatch is roughly $1.66 million for FY27 and that the city will transfer $350,000 from the state-administered cannabis gross receipts tax fund into the general fund to help support dispatch operations.

- Landfill: The landfill board approved a fee increase to replenish reserves after high cell-construction costs. Huff said the board approved adjustments that will begin July 1; the rate change was driven by the need to restore required reserves rather than rely on episodic asbestos receipts.

- Flock Safety cameras: Commissioners asked about the camera program frequently described as "Flock Safety." Huff said the full installation and accounting were not yet completed but estimated recurring costs roughly in the $250,000-per-year range, noting some costs would be offset from opioid-funded allocations and other sources under consideration.

Other highlights

- Grants and capital outlays: Huff said the city does not budget grants until executed agreements are in hand; state capital outlay awards that are not completed by June will be carried over and revised into the final FY27 budget.

- Personnel and benefits: Departments were asked to hold flat operating budgets. The principal inflation in the operating lines is salary and benefits, largely caused by an employer shift to an 80/20 insurance split (city pays 80% of employee health premiums) and a handful of added or reclassified positions across departments.

- Public safety and unions: Huff reminded commissioners that fire union negotiations are ongoing and could materially change final FY27 numbers; any ratified contract would be brought forward for commission ratification and budget adjustment.

Next steps and procedural timeline

Huff said the preliminary budget must be transmitted to DFA by June 1 and the commission is scheduled to adopt a preliminary FY27 budget on May 26; the final budget will be adopted before DFA's July 31 deadline or at a special meeting if needed. Commissioners voted 7-0 earlier in the meeting to approve the meeting agenda; the commission adjourned by a 7-0 vote at the end of the session.

What remains uncertain

Huff and commissioners flagged several items that could change between the preliminary and final budgets: the outcome of fire-union negotiations, the golf course's operating model (which Huff said may produce significant changes), any late-arriving signed grant agreements, and final accounting for equipment and software that remain in implementation phases.

The commission will review requested corrections and bring the package back for final action; Huff asked commissioners to submit questions to finance ahead of the May 26 meeting so staff can incorporate any agreed adjustments in the preliminary submission to DFA.