Silver City council discusses budget for upcoming fiscal year.

By Lynn Janes

The Silver City Town Council held a work session meeting July 24, 2025. Attendance to the meeting included Mayor Ken Ladner, Mayor Pro Tem Guadalupe Cano, and Councilors Nicholas Prince, Rudy Bencomo and Stan Snider.

No public input currently.

The meeting had been called to discuss the fiscal year budget starting July 1, 2025, and ending June 30, 2026. Alex Brown, town manager, apologized for bring the budget before the council so late. It had to do with the transition of the water billing software and cash receipt software that affects almost all of the funds. He commended the staff for all their work on this, which had resulted in working on weekends and late during the week.

The numbers provided Brown said had been unaudited for the 2026 beginning balances but had been reconciled numbers. The numbers will not change much from what the council had before them. Some changes affecting next year have to do with what had been happening nationally on a federal level that would pass down to the state level of which some could be major. In his experience from the past, the state usually will go after the municipalities and counties to recover their funds.

They also will be seeing a 22 percent increase in health insurance for the employees but a 10 percent decrease in dental and vision. The increases and decreases would average out to an 18 percent increase to health insurance and town pays 75 percent of the employees' health insurance. The state had increased the contribution rate on employees as well as the municipality of 1.5 percent.

The number of personnel will stay the same except for the people that had been hired for the recreation center. He hoped by mid-August they could open the center.

Brown said he would be encouraging the staff to apply for large grants. He asked if the council had any questions. Ladner felt they should take the budget one page at a time. Brown asked that they address for now only what he had brought up at that point.

Prince wanted to know who the insurance Brown spoke about would be paid to. Brown said the insurance comes from the state pool of insurers.

Bencomo wanted to know how many projects the town would be working on and the total dollar amount. Brown said the total budget last year had been $70 million and a ,different amount for last year's projects came up. Brown said for this year the projects would be around $17 million so things would slow down some.

Brown asked the council to look at the first page and they would see a history of gross receipts for 2023-2025. Last year the total had been $17,644,203 for total gross receipts for the entire fiscal year. For the next year he will be estimating a little less, $17,418,860 to be conservative, a 1 percent decrease. He generally averages the past three years, but it brought it to low. "The budget is going to be very tight this year." He would be watching but many of the additional things the town had done such as sponsorships and programs would be shied away from. He cited the uncertainty of things both on the state and local level.

Total revenues consist mostly of three things gross receipts, property taxes and franchise fees. The fees consist of things like entry fees and library fees. If gross receipts become affected, they will have to make major changes immediately. If he sees any decrease in revenues he will bring it to the council right away.

Prince wanted to address decrease in revenues. He thought consumer confidence would be important to watch and look at week to week. He asked if he should be looking at anything else such as national statistics.

Brown said watching the tariffs would also be important as well as consumer confidence. In April when the announcement came out on tariffs, people started doing panic buying and knew revenue would go up, but in May people started pulling back when the tariffs took effect. However, the check for gross receipts for this month actually had been 2 percent higher than the same month last year. Retail purchases impact the town.

They had construction projects going on and winding down. Brown went over those and named the recreation center, city hall, Swan Street, etc. A number of things affect what would be happening. The mine had just announced holding back operations in August in Tyrone ,however they have enough openings at Chino to absorb those positions. At the same time copper has risen to an all time high, which will be a positive impact on the town. Brown said lot has to be watched.

Brown went to the next item on the budget, transfers out, general fund expenses. That total comes to $3.16 million. Most of them will be grants, debt service and part for the golf course. Operating expenses had gone down a little from last year.

Expenses last year had been $15.7 million but this year they have budgeted $14.16 million. Part of the reason for the difference was  last year they had some big one time purchases.

With the income and expenses, they have projected an ending balance of $1.23 million

He wanted the council to know that all three union contracts had expired, and they have been in negotiations. Because of the uncertainty they have not been able to give them any numbers on what they could give them in the next year. This contract will only be a one-year contract because of the uncertainty, and they will be meeting month to month after receiving the gross receipts tax. If the gross receipts go well, he wants to work with them to pay them more money. Just like everyone else their dollar has not gone as far as it did last year or the year before.

The next item will be operating costs and that would be for each department. The majority of their increases have to do with the health insurance increased cost.

Some questions came from the council and some miscellaneous items. Brown said the employees in their union contracts had seen a cost of living increase that the town would be honoring.

A big portion of the budget operational cost will be tied to water. Brown has proposed a 6 percent increase in the water rates across the board to include local residents and water associations. Everyone will have the same increase.

Prince questioned the flat rate and if they had different cost based on how far they would be located from the central system. Brown explained that the negotiations for the water associations had happened before him but had been negotiated based on how far away. Arenas Valley rates are higher than Rosedale and Pinos Altos would be higher than both because of the cost to get the water to them. Tyrone has been a different situation and Brown did not know all of the particulars, but some water rights had been given to the town when they became an association. The condition had been the town could not charge them more than 10 percent more than town residents. Those in the extra territorial zone had been set up to pay double water rates up to 15 years ago. At that time, he had started putting the same increase on them as the town. He would provide them with the rate sheet.

Snider asked if the tap fees would increase 6 percent. Brown said no because those fees would require, an ordinance change. The ordinance does have automatic rate increases. Brown would not be recommending any increase for the sanitation fund. After auditing the residents with multiple carts and charging for those it will cover the increases for sanitation. That fund stays pretty constant unlike the water that changes greatly from summer to winter and if they have a dry year.

Prince had concerns about those residents that had been or will be making their homes more fire wise that they would have an avenue to dispose of that debris. Brown said the residents and people paying disposal fees may take up to a ton of trash to the landfill every month and it would include yard waste and no extra fees.

Brown circled back to the total budget for this fiscal year will be $62,127,000 a $8 million decrease from last year. He asked if they had any questions. The council did not have any questions.

Brown went to capital funds. This year they will be $17,246,000 and the majority will be grant projects that have come before the council or will.

Prince had a few questions and named a number of projects and Brown explained or reminded him what they will be. Some would be for design and not the construction. Some tied to the Grant County Water Commission but for now the town will be the fiscal agent and will not be incurring any costs.

Brown said he has been pushing the staff to apply for grants especially big ones to keep things funded and their feet under them. Special revenue funds come from grants mostly and the council does not see them. He named out a list that included fire protection, EMA, prisoner housing, etc.

The town sees income from lodgers' tax and a few cents off of every gallon of gas sold in town.

Snider had questions about the one of the grants, Operation Stonegarden. He wanted Brown to expand on what this grant would be involved in. Brown turned the explanation over to Police Chief Freddie Portillo. The county would actually be the fiscal agent on this grant under border patrol and customs. "I just want to make it clear that this grant is for interdiction on the highways." The border patrol will assign the Silver City police force to a specific area within the county for drug interdiction, human trafficking and violent crime. "If an officer comes across illegals, they have the same rights as anybody else." They have to work within the scope of their duties. If they come across an illegal, they will notify border patrol and if border patrol will be too far out, they must let the person go, because they cannot prolong the stop. "They have civil rights like anyone else."

Snider continued to repeat some things Portillo had just explained. Portillo said they could not detain them just because they have an illegal status. If they have been committing a crime the officers will enforce the law. "That is what this grant is specifically for, and it helps border patrol with drug trafficking and human trafficking." Snider ask him to say they would not be assisting ICE (Immigration and Customs Enforcement). Portillo told him no that this grant would not be to target illegals, and he wanted to be very clear on that.

Snider continued by asking what the actual requirements of the grant would be. Portillo asked for clarification of what he had asked. Snider asked again what the stipulations of the grant would be. Portillo said they would be working under the Silver City Police Department policies. They provide a report to board patrol quarterly to be reimbursed for their time. Brown added that they would be called out at the request of border patrol. They have an MOU (memorandum of agreement) that Portillo offered to the council for review.

Snider addressed that the department seemed to be understaffed. How did this affect staffing? Do they go out of city limits to do this work? Portillo said the main priority of the department will always be the town. This grant would be for working outside of city limits within the county. They have not been able to use this revenue much because the town will and had been the priority.

Prince said, "You use the word illegals, what does the department do to ascertain somebody's citizenship status?" Portillo said, "We do not ask that question but do ask for a driver's license just like anybody else along with insurance and registration." Prince said, "When you say 'we' does that include the work you do with the border patrol?" Portillo said they work withing the scope of the Silver City Police Department policies. If they come across anybody illegal or not if they commit a crime the officer will enforce the law. "I don't know how else to explain that to you because this is not to specifically look for illegals. This is for interdiction stops involving drug trafficking, human trafficking and violent crimes. As you all know we have fentanyl pouring into our communities."

Prince cited a situation in the recent past with a stop when the people had been possibly trafficked and they didn't interact with the local system for wellness or were they sent to the hospital for professional help. Portillo asked him what the question was. Brown said he thought Prince had been refereeing to a call in Hurley where illegals had been found and turned over to Homeland Security. Portillo said Hurley Police Department works under their policies. "Our policy is not to ask." Prince continued on the line of questioning and possibly turning them over to the hospital and the hospital would turn them in to Homeland Security.

Prince said, "I am just concerned they will be handed over to border patrol and we are seeing some pretty scary situations with border patrol." He hoped they would receive medical attention no matter what their citizenship. Portillo again told Prince, "They will not be treated any differently than any US citizen. Again, they have the same rights." They follow protocol and treat them exactly the same.

Brown asked if anyone had any other questions on the special revenue funds.

Prince had more question on some of the grants. Both the grants he addressed Brown said had to do with targeting narcotics and violent crime. It funds overtime and the department receives reimbursement. He went into explanation of how they worked. High Intensity Drug Trafficking (HIDTA). Silver City falls in region 7 task force, and it has been specifically utilized for narcotics and violent crime. The other one has been a program of JPO (juvenile probation office). Snider asked if that could be used for intervention and Brown said no, not to his knowledge.

Brown went on to debt service and explained this would be loans the town has and most have to do with Colonias grants. He asked if they had any questions. He went over several other funds and explained what they would be. He again asked if they had any questions.

Prince said, "I am just not comfortable with us taking Homeland Security money. I want to see the Stonegarden grant sent back." Brown said they had already spent part of it. Prince said they had spent $2,179 already and could send it back along with what would be left of the total $28,000."

Cano said she had a concern that this would be similar to other grants they applied for. If they send it back, they would not be able to apply for it in the future. Portillo agreed,  because they had been trying to obtain this grant for a few years. This had been the first year and they can purchase equipment needed by the department as long as they participate in the program to work on stopping narcotics, drug trafficking and human trafficking. To send it back would be detrimental. "I would ask that you not do that. Again, what we are after is drug trafficking, human trafficking and violent crimes."

Prince said this grant has been in operation across the country and he had not seen any data that it had been effective and slowed or stopped any of the challenges faced. He had concerns on giving Homeland Security direct access to the officers to operate unmonitored and unsupervised. "I have some very deep concerns based on some things we are seeing across the country with Homeland Security." He didn't think $28,000 would be worth the cost to the community.

Portillo disagreed with Prince and Snider broke in and said he agreed with Prince.

Bencomo pointed out that $28,000 would not be a lot of money but the community does have a drug problem, and it would not benefit them to send it back. He asked Portillo if they could purchase equipment and Portillo said absolutely. This will be the first year, but he had confidence they would be able to receive more funding in the following years, and it would impact the community. He spoke to the ability to purchase license plate readers and how much those have impacted crime. He has looked at this long term.

Cano said if this could grow in the future, she would like to see some data before a decision would be made. If they have already seen positive things and this could grow it would be great. She went back to applying for the grant then sending it back would impact the possibility of not being awarded it in the future. "It is not just about today and what's going on in this country, it's what's happening four years from now when we have a new president."

Snider asked if they could provide training with this grant. Portillo said he didn't know. They do have to have specific training in order to work the program, but he would double check. Snider alluded to them being trained on immigration law or something for when they do when they make a stop.

Portillo said they have training to even be involved and work the program. "We work and operate under our policies, and we are enforcing state law."

Bencomo wanted to add something. He said he works as a substitute teacher at the schools and has had two students die as a result of being exposed to fentanyl. He knew these kids on a day-to-day basis. Personally, this hit him, and he knew some of the families. "I would like to see this continue." He had been referring to the Stonegarden grant.

Brown said this would pay for about 460 hours of overtime through the next fiscal year.

Prince said on that note he wanted to talk about the opioid settlement money that had been seen moving across the country. He wanted to know if that money had been reflected in the budget. Brown said they had not seen any of that and therefore would not be in the budget. He said if that did happen it would come through the state and then to the municipalities and the state had not put anything out on opioid lawsuit funding.

Cano said from the Municipal League point of view they would have very little of that received from the state and not to expect it. Brown said whatever opioid settlement money received would probably be used for the state police and not filtered down to the local communities which has been the standard of operation.

Ladner thanked Brown and his staff for the tremendous amount of work they had put into the budget.

Meeting adjourned.