'People first' budget: City proposes $440.1 million in spending for upcoming fiscal year

Apr. 15—The city of Santa Fe is proposing a $440.1 million operating budget for the upcoming fiscal year with a focus on investing in its workforce.

"The City is seeking to attract, retain, develop and promote — and pay our City workers," Mayor Alan Webber wrote in a letter introducing the proposed budget, which was published on the city's website late last week. "The big idea in this budget is our people."

The proposal, which Webber described in his letter as "a people first budget," includes $4.1 million for a 3% raise for all city employees, $8 million to implement recommendations from a recent class and compensation study and nearly $20 million for workers' health care and life insurance costs.

The proposed budget includes a $7.8 million increase in general fund expenditures from fiscal year 2024 and a $36.7 million increase overall.

The council unanimously approved a $403 million operating budget for the current fiscal year in May 2023. In November, the city announced it had $16.5 million in unanticipated gross receipts tax revenue, which makes up the largest portion of the city's revenue.

Funding for most city departments would remain flat or decrease compared to a midyear budget for the current fiscal year reflecting revenue changes. Some, including tourism and arts and culture, would increase. The Community Services Department budget would decrease by about 22% from fiscal year 2024, and the Public Works Department budget would decrease by about 16%.

The Affordable Housing Department budget would decrease to $4.6 million from $5.4 million. Finance Director Emily Oster said $3.7 million of that would be in the Affordable Housing Trust Fund.

Webber, who in the past has described Santa Fe's lack of affordable housing as the city's No. 1 issue, wrote in the letter his budgets "have been steadfast in our focus on housing for all."

The City Council Finance Committee will begin holding budget hearings Tuesday, with seven days of presentations scheduled in the next two weeks.

Each department in the city will make a presentation to the committee about its accomplishments over the past year and its goals, Oster said.

The first meeting will include an overview of the recommended budget as well as presentations from the three unions representing city employees.

Louis Demella, vice president of the American Federation of State, County and Municipal Employees Local 3999, which represents more than 600 city workers, said the union plans to call for changes to the way some pay increases are handled. Demalla said the union has concerns about a "hybrid parity" approach recommended in the recent class and compensation study and has yet to reach an agreement on the first part of a raise connected to the study, which the City Council approved in March. The police and fire unions have both signed agreements.

Councilors on the Finance Committee — Carol Romero-Wirth, Signe Lindell, Jamie Cassutt, Lee Garcia and Pilar Faulkner — can propose amendments to the budget, which Oster said she anticipates will be brought to the City Council for a final vote May 8. However, they cannot increase the total dollar amount.

All budget hearings are open to the public and will be livestreamed on the city's YouTube channel but do not include opportunities for public comment. The city put out a call through its emailed newsletter asking members of the public to share their budget priorities during the April 10 City Council meeting. Several people responded.

The city's operating budget is due to the New Mexico Department of Finance and Administration by June 1. Following a state review process, it will go into effect July 1, the start of fiscal year 2025.

Along with the typical budget process several councilors have requested, the city will schedule a special meeting to discuss the potential spending of millions of dollars in reserves.

Oster and Webber have said the city is considering spending some of its reserve funds in the next fiscal year but did not cite a dollar amount. Councilor Michael Garcia said in February he was told the city was considering spending up to $30 million.

Oster said any plans to spend one-time money will occur independently of the budget process, adding a special meeting is likely to be held in mid-May, though a date has not yet been set.

The amount of reserve money to be spent and what it would be used for will depend on the outcome of the budget process as well as the city's delayed 2023 fiscal year audit, which Oster said is on track to to be submitted to the state by May 15, five months past its deadline.