City's proposed spending of millions in reserves prompts call for special meeting
Feb. 28—Several Santa Fe city councilors called Wednesday evening for a special meeting to discuss plans for the city to spend potentially millions of dollars from its reserves as part of its budget for the upcoming fiscal year.
Councilor Michael Garcia said he learned during a meeting with finance leaders last week city officials are considering spending $30 million from reserve funds in fiscal year 2025. He said he was concerned about spending so much money without a process for public input.
He contacted City Manager John Blair on Feb. 19 to request a study session with public comment, according to emails obtained through a public records request. He said at a council meeting Wednesday, however, he believed a special meeting would be a better format.
"I would just ask we take these requests seriously," Garcia said.
Councilors Lee Garcia, Pilar Faulkner and Alma Castro were copied on the email correspondence between Blair and Michael Garcia. They all said in interviews they backed the plan for a special meeting on the proposed spending. Councilor Jamie Cassutt also voiced support for the idea.
"That's something we should all be having a conversation about," Faulkner said.
Castro said she is a big fan of what she described as participatory budgeting. "Allowing for community input can only benefit us," she said.
Finance Director Emily Oster and Mayor Alan Webber said the city is considering spending some of its reserves in the next fiscal year, but a dollar amount has not yet been set. Webber defended the proposal.
"If you look at the city's reserve fund, we've been very, very frugal in the way we budgeted," the mayor said, noting that's one of the reasons the city has maintained a strong bond rating. "That also means we've built up the reserves to the point where if we want to make some one-time allocations for high-priority, nonrecurring expenditures, we have some money to do that."
Every year, the city has more budget requests than it has the money for, he added.
Oster and members of her team met one on one with councilors last week to discuss their priorities for the upcoming budget year. Garcia said the idea of spending about $30 million in reserves was mentioned at his meeting.
Other councilors said they had similar meetings but were not told directly about planned spending from reserves.
Lee Garcia said at the end of a long meeting with Oster and Deputy Finance Director Alexis Lotero, Oster told him there was "not a whole lot of room for extra things, just so we were aware." He was surprised when he later was told about plans for reserve spending.
Michael Garcia wrote in his email to Blair he was "caught off guard" by the proposal and believed both the City Council and the public needed an opportunity to share their input on how reserve funds should be spent.
Blair responded Feb. 24, saying he would be out of the office the following week on personal leave. He recommended Garcia speak with Webber and Councilor Carol Romero-Wirth, who chairs the Finance Committee.
"As I understand it, Director Oster and Deputy Director Lotero have been discussing spending down some portion of reserve fund and that it's come up in some of their one-on-one meetings with Councilors in advance of the budget process," Blair wrote in the email. "I don't believe there's been much more to it at this point beyond those initial discussions."
Romero-Wirth did not respond to a request for comment Wednesday and was not present at the council meeting.
Asked Wednesday afternoon if he would support the councilors' request for a public discussion on the spending, Webber said, "I haven't really talked to any of them about it."
Castro said in an interview she wondered if the proposed spending would be used to supplement state funds for beautification.
The New Mexico Department of Transportation announced in December it was partnering with the state Tourism Department "to make critical street repairs, maintain medians, and clean up litter in high traffic areas" of the capital city. By that time, the state had spent about $650,000 on work in Santa Fe. The announcement cited the city's issues accessing state capital outlay due to overdue audits.
Gov. Michelle Lujan Grisham more recently allocated $5 million for upgrades to Fort Marcy park in fiscal year 2025. The funding, which was not on the city's wish list for new capital outlay, made up more than a quarter of the $18.9 million it received during this year's legislative session.
The city has spent about $13 million on capital projects in fiscal year 2024, which came from several sources, Oster said in an interview. Its infrastructure capital improvement plan includes about 90 projects, which is more than it can fund in any budget year.
It's unclear how much the city has in its reserve funds. Oster said it had about $62 million as of June 2022. She could not provide a more recent figure because that was the last audited amount, she said.
Webber said any reserves spent would go toward necessary maintenance the public typically doesn't see, such as snowplows, computer software and equipment for filling potholes.
Those types of things often are deferred because the city has more urgent needs, he said.
"It's not sexy. It's not something that folks will necessarily see out in their neighborhood," he said. "But if you're going to be a 21st century city, those are investments that need to be made."
