Artesia city councilors hoped to address an $11 million annual deficit contained in an interim budget approved in May.

The City Council discussed the budget during their June 23 meeting but took no action on approving the final budget for Fiscal Year 2027.

Fiscal years run from July 1 to June 30 of each year, named for the calendar year they end within.

An interim budget is a temporary annual budget submitted before the close of the fiscal year to ensure legal spending and operations continue through the start of a new fiscal year July 1 before accounts have been reconciled. A final budget is then submitted by July 30 after accounts have been resolved and goes into effect in September.

Across multiple meetings, councilors studied projected revenues and expenses for FY27 in comparison to actual values from the City’s recent history after May 26 approval of the interim budget. That budget included an $11 million deficit that raised concern from councilors and constituents, who hoped to see the shortfall addressed before final submission at the end of July.

“I was uncomfortable with our initial interim budget as were a few of the Councilors,” said Mayor Jeff Youtsey. “I made some recommendations on the personnel wages side and brought it back for reconsideration. I feel much better about the amended interim budget.”

City Clerk Summer Valverde provided a long-term perspective during a special meeting June 16, where she explained the projected deficit is the result of overbudgeting expenses and underbudgeting revenue.

Valverde explained the city has 15 staff vacancies, which entail insurance costs of up to $28,000 in addition to their salaries, included in the interim budget.

The deficit also included about $7.4 million in capital projects previously approved by the city, along with pay raises scheduled in 2023 after city official said a “market study” showed Artesia’s city staff salaries were less than the market suggested they should be.

These projections show the cash reserve balance at the end of FY27 would be $18 million, $2 million above the unofficial reserve set by City officials at $16 million. An unofficial reserve is the balance City officials are not willing to dip into to maintain an adequate emergency fund.

According to Valverde, councilors approved these projects in the past as part of a long-term investment strategy they believed would open new revenue streams for the City. She said 84% of the city’s income comes from gross receipts tax (GRT) revenues, which the city must use to balance its spending.

Councilors discussed the need to balance spending and community investment with fiscal responsibility and planning for seasons of economic drought and how these goals should affect the final budget and future project approvals.

On June 16 the council explored options such as increasing projected GRT income from $2.4 million to $2.7 million, which reflects actual monthly GRT income from FY26.

Council also discussed what economic effects they might expect from the recent annexation of HF Sinclair Navajo Refinery property and the pending purchase of the Artesia Recreation Center (ARC).

Comments regarding the ARC prompted controversy in City Hall and online. Some constituents and councilors voiced concerns regarding the City’s ability to cover overhead and operational costs of the ARC and questioned if the facility would provide a net benefit from a financial perspective, though all agreed the state-of-the-art facility will certainly improve quality of life in the region.

Council made no decision regarding the projected GRT values, but did approve Resolution 1952 during their June 23 meeting to alter city staff salaries and pay grades.

Resolution 1952 amended the “Classification Plan establishing compensation grades and salary ranges for City positions.”

This entailed a 5% increase in pay grades for all city employees in FY27 which means all City employees, including police officers and firefighters will see an increase in pay this year. The resolution also updated the list of jobs included in the budget, removing significant unfilled positions such as “parks supervisor”.

According to Valverde, this will bring all salary ranges to a competitive position so that no salaries will need to be raised again until a market study once again becomes appropriate.

Council plans to continue discussions at an upcoming retreat set for July 17-19.

Other business

Council approved a public hearing for a potential cannabis dispensary at 705 N First Street after discussion regarding council’s role in the approval process. The public hearing is set for the July 28 meeting of the City Council and is open to the public.

Since cannabis has been legalized at the state level, council can only approve or deny license requests based on the location of the proposed business, following state approval.

Heavy rains in the early summer may have caused parts of Eddy County to turn green, but experts warn that drought persists throughout the region.

The area had received about 5.56 inches of rain since January as of July 8 – more than last year’s total of 4 inches but less than the 6.34 average for southeast New Mexico, according to data from the National Weather Service.

About 0.86 inches fell in May and 2.84 in June, according to data collected at the Cavern City Air Terminal.

Jim DeBerry, lead meteorologist at the National Weather Service’s Midland-Odessa office, said the early spring and summer rains were brought on by the absence of a high-pressure air ridge that usually materializes over the region in early summer.

In May and June, he explained, the ridge normally blocks off precipitation brought via other air currents and reduces the chances for storms.

The system is known as the “Death Ridge” for its ability to “kill thunderstorms,” DeBerry said, and is currently hovering above Kentucky and Tennessee, allowing currents to enter southeast New Mexico and bring rain in short bursts.

The Death Ridge system is stalled, DeBerry said, but should arrive sometime during the summer.

“It’s an upper-level disturbance that ends up bringing thunderstorms,” he said.

“Super El Niño” could bring more rain

Further strengthening the area’s chances for increased rainfall is the El Niño weather pattern experts are expecting this summer.

An El Niño weather pattern occurs when the water off the Pacific coast warms, shifting air currents away from their normal patterns. It could mean a wetter-than-normal summer.

“Conditions are very favorable for El Niño,” he said. “For our part of the country it will result in increased precipitation.”

And the pattern could be more intense than in past years, according to AccuWeather, a national weather forecasting company.

While the “Super” El Niño could bring more rain to southern states, it could lead to dangerous drought in northern portions of Texas and as far north as the Dakotas.

In the south, meanwhile, the wet months could be followed by several years of intense drought, said AccuWeather long-term forecaster Paul Pastelok.

“The stronger the upcoming El Niño conditions get, the longer it takes for weather patterns to return to their historical average,” Pastelok said.

But in Carlsbad and southern New Mexico, the expected high moisture had yet to fully appear.

Most of Eddy County remained under drought conditions as of July 7, with 88.4% listed as such by the U.S. Drought Monitor.

The Drought Monitor, operated by the University of Nebraska, reports drought conditions throughout the U.S.

The monitor reported Eddy County’s drought conditions could be marked by increased fire danger and low soil moisture, meaning livestock may need supplemental water to survive.

About 97% of New Mexico was under drought, the monitor reported, with the most intense conditions in the northwest and central regions around major cities such as Albuquerque and Rio Rancho.

‘Not the best situation’

Coley Burgess, manager of the Carlsbad Irrigation District, said the level of dryness that remained despite the early-summer rainfall was “concerning.”

The Irrigation District services about 580 water users, mostly agricultural, in southern Eddy County from farmlands near Lake Avalon to south of Malaga. The district operates a canal that sends water from the reservoirs at Avalon and Brantley Lake to others in the district.

That water is measured in “acre feet,” or the amount of water it takes to cover an acre of land a foot deep – approximately 325,851 gallons. The district’s board decides each year how much to allot per acre.

Burgess said this year’s allotment of 2.5 acre feet for each user was lower than he would like to see. A “full allotment” is 3.5 acre feet, a goal Burgess said the district has not met “in several years.”

That means that although the grass is greener, and vegetation has grown, farmers are unlikely to “break out” fallowed farmlands into operation, Burgess said.

“It’s still not the best situation even though we’ve had these rains,” Burgess said. “Even though the rains have been nice and they’re welcome, it’s still not enough to put more water in the reservoirs.”

Burgess said the district will need some heavy rains in August or September, which he said are the “wettest months” of the year as the late summer and early fall rainy period known as the “monsoon” takes hold.

Without a strong monsoon, Burgess said, the typically dry winter months could be perilous for farmers and ranchers.

And despite the apparent promise of moisture via El Niño, Burgess said, he’s hoping for the best but planning for more drought.

“Everybody prays for rain but I don’t see much sense banking on an El Niño pattern until you have the water in the system,” he said.

National Weather Service forecaster DeBerry agreed.

He said the region typically sees some rain in the early summer before drying out in July and early August. That appears to be happening with chances for rain remaining limited in the coming weeks.

“Usually through late spring we’ll some rainfall and get ahead,” DeBerry said. “Then that ridge shows up. Once it sets in, we drop below normal. We’re dropping now.”

Managing Editor Adrian Hedden can be reached at 575-628-5516, or @AdrianHedden on the social media platform X.