Valencia County Arroyo Flood Control District members approves its first fiscal budget

After some back-of-the-agenda math, the board of directors for the Valencia County Arroyo Flood Control District unanimously approved its first operating budget for the upcoming fiscal year, even though it most likely won’t have funding until 2026.

As the newest political subdivision in the county, the district is required to submit a budget for the 2025-26 fiscal year, which starts on July 1, but it won’t have any money to spend until the 2026 calendar year.

“In discussions with the state Department of Finance and Administration and the state auditor’s office, we were advised we should submit a budget (by June 1), even if it is an interim budget,” Board President Teresa Smith de Cherif told her fellow board members at the May 29 meeting. “In some wild news, it seems that we are not really recognized yet by the state of New Mexico, so maybe the rule doesn’t apply yet. But if we don’t submit it, it could come back to bite us. I think we should put together some preliminary numbers and submit it before the deadline so it’s in possession of DFA.”

Smith de Cherif said since the state hasn’t recognized the district yet, there wasn’t a budget upload portal available on DFA’s website, so she suggested submitting a basic interim budget via email.

Vice Chairman David Gardner said in his correspondence with the state auditor’s office, “they wanted documentation to show we’ve been created. It seems clear the state does not know we exist. I think we should do a budget now; if not, it will be a problem later most likely.”

The first step to building the budget for the district was to account for anticipated revenues, which totaled $915,000. As a brand new agency, the VCAFCD doesn’t have revenue yet, so its budget for the upcoming fiscal year contains what it might receive.

The main source of funding for the district will be the half mill levy the board approved in April. The mill levy — which will impose 50 cents per $1,000 of net assessed value on all properties in Valencia County — is expected to generate $800,000 a year.

Other possible sources of revenue in the budget include $15,000 the district plans to seek from other local government agencies either as a loan or gift. At its regular May 21 meeting, board members agreed to ask municipalities and other local special districts in Valencia County for financial assistance during the start-up phase.

During the May 21 meeting, Smith de Cherif said, as a public body, the VCAFCD could enter into a loan, which it would repay with mill levy proceeds.

“It might be a good idea to prepare an letter that explains the situation and purpose — that the district was created with overwhelming public support but without a budget, and ask for a loan or contribution,” she said. “We could approach the municipalities, county and other special districts, (for funds) to take us to the end of (this) calendar year.”

While the district approved the half mill levy, the property tax revenues most likely won’t be distributed until early in 2026.

The board also added in $100,000 in revenue from potential state allocated capital outlay. Members still need to develop an Infrastructure Capital Improvement Plan to submit to the Legislature to request capital outlay funding for the district.

After close to two hours of discussion, the board developed a budget with $630,278 in proposed annual expenses, covering costs ranging from salaries and benefits for four future employee positions to cleaning services and postage.

The four positions included were an executive engineer, director of administration, field engineer and office clerk/administrative assistant.

“I think we are really going to need an executive engineer,” said Smith de Cherif, who suggested that position versus that of a district manager. “We really need someone who knows their stuff, who has the science and engineering background, and has managerial skills.”

She continued, saying she envisioned a position similar to that Jason Casuga with the Middle Rio Grande Conservancy District, who is the CEO and chief engineer.

“Someone who has both management and technical skills is important to consider,” she said.

The budget includes $288,000 for salaries for the proposed positions, as well as about $70,000 for benefits, Medicare and Social Security. Other large dollar items in the budget were $48,000 for renting office space, $15,000 for professional contracts, $50,000 for IT services, $10,000 for training and $12,000 for utilities.

While the district has no revenue at this time, Smith de Cherif said the budget process had to imagine it did and to account for 12 months of expenses. The board also allocated $100,000 for reserves, since the mill levy disbursals come in two large chunks after the December and May deadlines.

The board approved its interim budget, which was due to the state by June 1, on a 5-0 vote. Once it is reviewed by DFA, the board will consider a final budget for the district in July.

“We can put numbers in now for the interim and adjust them in the final budget,” Smith de Cherif said. “We should do more rather than less. The state goes very hard on you if you overspend your budget.”