BY LWV OBSERVER CORPS

Editor’s note: Members of the League of Woman Voters of Los Alamos Observer Corps have been providing LWV members with reports on certain meetings in the County for many years. These reports have been included in the LWV’s monthly newsletter and now, at the invitation of the Los Alamos Reporter, will also be submitted to the Reporter for publication. The video of the two special budget meetings may be seen
at https://losalamos.granicus.com/player/clip/4750?view_id=2&redirect=true and https://losalamos.granicus.com/player/clip/4755?view_id=2&redirect=true

Councilors present: Randall Ryti (Chair), Theresa Cull, Suzie Havemann, Melanee Hand, Ryn Hermann, Beverly Neal-Clinton, David Reagor.

Adopted FY27 County Budget

At the end of two days of public hearings, Council adopted a Fiscal Year (FY) 2027 expenditure budget totaling $350.2M, including $0.9M for two approved budget options. The vote was 6–1, with Councilor Reagor in opposition.

The adopted FY2027 budget is about $18M less than last year’s adopted budget, largely attributable to a $13.6M decline in capital project funding.

Reagor said he opposed the budget requested by the Department of Public Utilities because he felt its contract with the Foxtail Flats Solar Project put the County at an unacceptable financial risk. He also felt the Capital Improvement Projects (CIP) budget in FY 2027 warranted more discussion. In particular, he questioned the need for an Emergency Operations Center.

Council approved reallocating $1.4M in the CIP Fund to the North Mesa Bike Park, bringing the total project funding to $1.9M. The vote was 5–2, with Councilors Cull and Neal-Clinton opposed.

Revenues

County Manager Anne Laurent’s opening remarks for the budget hearing summarized changes to the County’s revenue stream, emphasizing Gross Receipts Tax (GRT) revenue.

GRT is the County’s main source of funding, making up about 75% of General Fund revenue. Property taxes provide about 8%, with the remainder coming from fees, state and federal funding, and other sources. Because of the heavy reliance on GRT revenue, changes in the economy can directly affect County services, infrastructure, and long-term investments.

In recent years, GRT revenues have fluctuated in concert with changes in employment and construction activities at Los Alamos National Laboratory. After reaching a peak, collections declined and have since leveled off at lower amounts. In FY2025, GRT dropped by nearly 18%, and FY2026 is projected to come in about 4% below budget. While the County remains financially stable, this revenue shift requires adjustments to ensure long-term sustainability.

A previously approved 0.625% increase in the GRT rate will take effect on July 1, 2026, with FY2027 as the first full year of implementation. The intent is not to increase spending, but to stabilize finances by aligning ongoing costs with reliable revenue, supporting essential services, infrastructure, and key community priorities such as economic development, workforce housing, environmental sustainability, regional partnerships, employee wellness, and upkeep of County facilities and roads.

The FY2027 proposed budget also recommends increasing the targeted reserves of the unassigned General Fund balance from 20% to 25% to strengthen financial resilience and ensure continued support for critical services. Council approved this change to the County’s existing financial policy.

Budget Guidance to Department Heads

Laurent and Director of Administrative Services Helen Perraglio outlined the budget review process. County leadership developed the FY2027 budget starting from the adopted FY2026 budget, excluding one-time expenses. Departments were guided to plan for moderate increases in salaries and health costs, while reducing non-labor spending by about 10%.

Given inflation and economic uncertainty, departments were asked to focus only on essential needs, complete delayed projects, and prioritize maintaining existing assets and implementing already adopted plans (i.e., Climate Action Plan, ADA audit, master plans, etc.). Any new requests were expected to clearly support Council goals and community priorities, including affordable housing, economic development, and key capital projects.

Adopted FY2027 Budget

The table below presents the adopted FY2027 departmental budgets. The FY2025 actual budget and FY2026 adopted budgets are provided for comparison, with a “Variance” column showing the percent change of the FY2027 budget relative to last year’s budget.

The adopted budget aligns with the County Manager’s guidance. Council approved nearly all departmental budgets unanimously. The budgets for the County Council and the Department of Public Utilities were approved by 6–1 votes, with Councilor Reagor voting in opposition.

Commentary is provided below for departments marked with an asterisk in the table, to account for large variances, budget option requests, new initiatives or focuses, and Councilor opposition.

Adopted FY2027 County Budget

Note: The dollar amounts shown in this table were compiled by the League’s observer from slides presented at the hearing by Department Directors and elected officials. The official amounts will be reported in the final adopted budget released by the County Finance Division.

Department	FY2025Actual Budget ($K)	FY2026Adopted Budget ($K)	FY2027 Adopted Budget ($K)	VarianceFY2027 vs FY2026
*County Council	362	445	689	55%
County Assessor	967	1,041	1,104	6%
County Clerk	1,267	1,334	1,413	6%
County Sheriff	17	18	19	5%
Municipal Court	824	909	946	4%
*Probate Court	5	8	19	125%
*County Manager’s Office	19,514	25,468	25,135	-1%
County Attorney’s Office	1,282	1,501	1,659	11%
*Administrative Services	13,938	22,433	17,267	-23%
*Community Development	16,119	17,971	18,525	3%
*Community Services	35,281	33,742	35,490	5%
Fire	50,536	56,472	58,258	3%
Police	16,205	17,986	20,113	12%
Public Works	44,790	69,548	64,367	-7%
*Public Utilities	95,328	108,740	95,588	-12%
Other Funds	4,823	10,549	8,179	-17%
REPORTED TOTALS	300,986	367,980	350,220	-5%

County Council

The Council’s requested budget was approved 6–1, with Reagor voting in opposition.

Councilor Reagor pointed out that, at $503K, professional and contractual services made up 73% of the Council’s $689K budget and have more than doubled compared with FY2025. He questioned the sharp increase, noting that “almost the whole budget is in one item, and there’s no information on that page.”

Deputy County Manager Linda Matteson replied that the rise is largely due to new contracts for state and federal lobbyists. The County’s longtime state lobbyist stepped down, and its federal lobbyist left his position, prompting the Council to issue Requests for Proposals (RFPs) for replacements. The new agreements cost more than twice the previous contracts. Together, the two lobbying contracts total nearly $250,000 annually.

Council did not approve the requested budget option to add $37,350 to the Council’s travel budget.

Probate Court

The budget for the Probate Court more than doubled because of the salary increase for this position that Council approved last year.

County Manager’s Office

Council approved the budget option for $15K to fund inclusivity training and other program costs associated with the newly formed Inclusivity Board.

Administrative Services

Compliance with the Inspection of Public Records Act (IPRA) requirements and the impact on the County’s budget was a recurring theme during the hearing.

Perraglio said that the Records and Information Management (RIM) Division handles IPRA compliance and responds to public records requests in line with state law. The Division processed 3,625 IPRA requests in FY2026, resulting in the release of about 1.5 million records. She said last year’s IPRA requests were about half of the number received in FY2025, but the hours to fulfill those requests nearly doubled. An external vendor was engaged to assist with high-volume requests and submitted over 5,000 billable hours.

Perraglio emphasized that no two IPRA requests are the same; some may take 2 hours, some 1,000 hours. She said she does not expect the overall workload to decline, even if raw request counts fluctuate.

To address this challenge, RIM is exploring Artificial Intelligence (AI) tools to help search across large volumes of records/emails for IPRA requests more efficiently. This approach could potentially replace some contractual services with in‑house capability without replacing staff, by using AI as a search/efficiency tool while humans still review and redact.

Police Chief Sgambellone echoed Perraglio’s characterization of the need for assistance in fulfilling IPRA requests, calling it a County-wide issue. He said that over the last fiscal year, the Police Department responded to over 14,000 IPRA requests. He added, “you have to understand that a lot of our IPRA involves video, which is very labor-intensive to review and to redact. So, I echo any of those initiatives throughout the County that will help provide us a way through that.”

County Clerk Michael Redondo reported that the Clerk’s Office is also looking to use AI to speed up the process of indexing a backlog of about 140,000 historical records. He said that this project is 11% complete but will take 10 years to finish at the current rate. His office will be issuing a RFP next year that will likely include AI methodology.

Perraglio said that the Administrative Service Department (ASD) will be advancing AI governance and tools to support departments with balanced, efficient, and responsible use of emerging technologies.

The requested ASD budget was decreased to adjust for CIP funding ($1.4M) that was reallocated to the North Mesa Bike Park. This project is included in the Community Services adopted budget.

Community Development

Community Development Director Eli Isaacson presented information showing that over half of CDD’s proposed budget for FY2027 ($22.1M) is from its Economic Development Fund ($12.4M). These expenditures primarily fund infrastructure and housing programs ($5.9M) and local Economic Development Loans or grants ($4.9M).

Isaacson emphasized that the high budget requested for FY2027 would not be repeated in next year’s budget request. He said the projected CDD budget for FY2028 ($7.1M) was more representative of future budgets. It is about 68% less than that adopted for FY2027 due to a much lower budget for professional/contractual services and for expenditures from its Economic Development Fund.

Community Services

The CSD budget for FY2027 ($33.5M) is nearly the same as that for FY2026. An increased cemetery budget ($1.0M) is due to needed renovations but this increase is offset by decreases in the other parts of the budget, such as for CIP projects.

The requested CSD budget was increased by the reallocation of CIP funds ($1.4M) to the North Mesa Bike Park, bringing the total project funding in the FY2027 budget to $1.9M. Another $1.5M for the bike park project is included in the projected FY2028 budget. CSD Director Cory Styron said that staff would be sending out an RFP for bids on this project later this year.

Public Utilities

The FY2027 budget ($94.7M) requested by the Department of Public Utilities (DPU) was 13% lower than its FY2026 budget ($108.7M). Public Utilities Director Philo Shelton attributed the decrease to three factors:

●       Electric utilities: The decrease of $9.2M is primarily due to decreases in purchased power costs, Interdepartmental Charges, and debt service expenditures.

●       Gas utilities: The decrease of $1.1M is due to decreases in the costs of gas and the in-lieu taxes/franchise fee.

●       Water utilities: The decrease of $3.8M is primarily due to decreases in expenditures for capital improvement projects for both water distribution and water production.

Council voted 6–1 to adopt the requested DPU budget, with Councilor Reagor in opposition.Reagor did not support the budget because he disapproved of the terms of the DPU contract with the Foxtail Flats Solar Project. The County has a power purchase agreement with Foxtail Flats to purchase 100 MW of energy as it is produced.

Reagor pointed out that the contract obligates the County to pay for an amount of energy that is far in excess of its need. He felt that this obligation could bankrupt the County if DPU was unsuccessful in establishing partnerships with other users to purchase the excess energy.

Shelton replied that the County is negotiating with the Laboratory through the Energy Coordination Agreement, and with Sandia and Kirtland, which will take about 25% of the load for their uses. Having these other partners will spread out any financial risk. Shelton felt confident that the negotiations would be successful.

Council approved the proposed budget option of $900K for a joint DPU/PW project to repave Fairway Drive and to replace the associated utility infrastructure.