The New Mexico Department of Finance requires cities to submit their final budget for the upcoming fiscal year by July 31. The Truth or Consequences City Commission held a special meeting July 30 to pass the final budget, making the cut.
City Manager Gary Whitehead, in the position for five months now, along with City Finance Director Jocelyn Holguin, who is also newish and putting together her first city budget, did the deepest dive into city finances this reporter has ever witnessed in watching the city for 20 years, 13 of which included attending nearly every meeting.
Whitehead said at the beginning of his employment that he was initially going to concentrate on the July 1, 2025-June 30, 2026 budget and the annual audit. Like a python eating a pig (too repulsed to watch the video), Whitehead had to first ingest and digest department operations, state of the infrastructure, capital projects and the ability and needs of city staff. His understanding and ability to get the best out of people pervades the budget document.
He wanted to get the budget in sooner, but the capital projects portion had to be amended, Whitehead told commissioners. Communication between Assistant City Manager Traci Alvarez, who oversees capital projects, and the finance department, was done via emails, which resulted in misunderstandings or lapses in entries or double entries or not closing out projects. Alvarez will now walk over from her office to the finance offices when a new project comes online.
This deep-dive into capital projects resulted in a $13-million reduction in that section of the budget.
The draft budget estimated a total budget of $102.2 million, $73 million capital projects, $29 million one year of operations. See:
https://sierracountycitizen.org/biggest-budget-t-or-c-has-ever-had-60-percent-is-capital-projects/
The final budget estimates a total budget of $90 million, $60 million capital projects and $30 million for one year of operations. See the city packet, which includes the budget:
https://cms5.revize.com/revize/truthconsequencesnew/7-30-25%20Special%20CC%20Agenda%20Packet.pdf
The operations portion of the budget went up from the draft estimate of $29 million to $30 million, mostly because of closer scrutiny of fuel and insurance costs. Insurance went way up, Holguin said.
This year’s operations budget is up about $3 million from last year’s $26.7 million. Whitehead, unlike past city managers, had the budget reflect 100 percent employment, including cost of benefits. It also assumes staff pay will go up a modest 1.5 percent for those staying with the city another year–an automatic step he is instituting. And a recent pay study resulted in $250,000 of adjustments to those whose pay was below market who are paid on an hourly basis. Salaries for management-level staff still need to be adjusted, but they were much more inline with the market and can wait.
Last year the city budgeted $18 million for capital projects but only spent $5.8 million. This year the city budgeted nearly $60 million, but it’s doubtful it will spend even half that amount.
You see, the budget plugs in revenue and expense numbers when a contract is signed, but sometimes it takes two or more years for design, engineering and government-agency approvals to be completed. Then it goes out to bid, and post-Covid, estimates from years prior are too low, and it becomes a rinse-and-repeat process. The time element of a project moving through the pipeline is reduced to a still photo or snap shot.
Some divergences from the $60 million estimated expenditure I expect:
- Fund 305: Animal shelter expansion. The budget shows $445,000, but they have received about that much again in grant funds, which hasn’t been signed on the dotted line. This project has already gone out to bid, but came in way over the $900,000 the city has. Whitehead has or will find a construction company that will do it for that amount, switching from a bid procurement process to a “design-build” procurement process, which allows the city to negotiate with a firm on price, project scope, and materials. This line item will therefore probably be adjusted to a $900,000 expenditure by the end of the year.
- Fund 320: MSD Water System Improvements. Main Street Downtown? Who knows why this is called MSD. This is already 99 percent completed, with only $500,000 or so left of a $9.4 million project that the budget shows as a $10.4-million project.
- Fund 321: WSPI 2. Water Systems Performance Improvements, 2. This is a $9.9-million project that is still in design and probably won’t happen until next year.
- Cantrell Dam: A formal contract has not been signed, but when it is, it will be nearly a $9- million project, which will probably be done or at least started this fiscal year, since it is 100-percent designed. It’s not among the capital projects, page 184 of the 344-page city packet: https://cms5.revize.com/revize/truthconsequencesnew/7-30-25%20Special%20CC%20Agenda%20Packet.pdf
Whitehead put together his own chart of capital projects, (page 343 of the packet), which gives a truer picture of money remaining or coming in, but it isn’t totaled.
To understand the timing of big water projects that make up the biggest portion of the capital projects, please see Whitehead’s explanation:
https://sierracountycitizen.org/whitehed-explains-next-four-water-projects/
I put together a chart too, that shows grant, loan and cash match amounts, since I wanted to know how much local money T or C citizens will be paying. My chart used figures from a December 2025 projects report by Alvarez, a June 2025 water-projects report by Whitehead and page 184 and 343 of the city packet.
I came up with a little over $55 million in capital projects. About 72 percent or $40.7 million are government grants or capital appropriations. About 28 percent, or nearly $16 million, is local money–$15.4 million in loans and $663,000 in cash matches. Please see my chart below: