Cloudcroft Passes Budget on Deadline Despite Financial Uncertainty
The council approved the village FY 2025-26 budget for the state, with reservations, in the nick of time. But questions remain about how to allocate staff expenses and find more revenue
[NEWS ANALYSIS]
Cloudcroft met its state budget deadline for the first time since 2023 Thursday night, but not before council members aired deep doubts about spending decisions made just two days earlier in front of a packed audience.
The contrast was stark: Where dozens of residents had crowded Tuesday's meeting to watch heated debates over staff raises, Thursday's budget approval drew only the fire chief, finance director, and two reporters to the village council chambers.
The $1.7 million budget passed on a 3-0 vote, but the sparse attendance masked continuing divisions over how Cloudcroft should manage its finances while working with unreliable financial records dating back to 2022.
Despite the one-topic agenda, there was interesting back-and-forth between Council members, which revealed the strains of trying to manage the tight village budget when recent financial reporting can not be relied upon. “I just don't trust any of the numbers. None of the numbers going back to 2022 are really correct, “ said Mayor King.
At the heart of Cloudcroft's budget challenges: Two-thirds of the village's operating funds go to personnel costs — police, maintenance, clerks. After years of staff turnover, officials are struggling to balance competitive wages against limited revenue and incomplete financial data.
So, how do you find the right mix?
The challenge of working with a modest revenue base comes down to a few basic questions: Where do you invest? Where do you trim? How do you grow revenue? And how do you plan when working with incomplete financials?
Despite the near-empty chamber on Thursday, three council members used the moment to clarify their positions on the controversial budget decisions made in front of dozens of observers just two days earlier.
Trustee Jim Maynard went first.
“I want to make sure it ends up in the minutes that this budget, the surplus in the general fund revenue offsets the deficit in the water, wastewater sewer fund, pretty close. But we still have to deal with, in the near future, payroll increases that we agreed to, and then the water meter expense of about $110,000.“
Mayor Tim King and Trustee Gail McCoy expressed reservations about their support for salary increases on Tuesday night, citing the Village's uncertainty about its incoming revenue.
Having voted for all the motions on Tuesday night, including a pay increase for the maintenance staff, Trustee McCoy seemed conflicted about her vote.
“I think I felt that I was not as effective as I could have been on Tuesday night. I felt that I did not go with some of my gut feelings. So, you know, I'm just saying that. I want to be real. And, you know, I mentioned a couple things, but then I proceeded to go against what I felt at that moment. So I just want to say that.”
Mayor King also felt he was not vocal enough Tuesday night about his concern that the increased pay might put the Village in a deficit if revenues do not prove better than budgeted. While he did not have a vote on the Tuesday motions, he had expressed his support for them. But then he’s had second thoughts.
King said:
“The whole thing's a mess. But the thing is, I'm not gonna sacrifice the fiscal soundness of the village to give a raise of 30% when I don't know what the fund balances are. I've thought this over a ton. If we find out in September that we're in the red, and we guarantee the 30% raise, we're SOL.”
Those remarks led to a discussion of pausing the pay raises approved Tuesday night.
But Trustee Jim Maynard firmly rejected suggestions to delay the approved increases, arguing that reversing a unanimous vote would undermine the council's credibility.
He said,
“The sticky part of what you mentioned to me is the payroll. Those expectations are there, and you had a unanimous vote (Tuesday night). That's really hard to argue with, or else none of our votes matter. And it was specifically stated.”
"You don't want to promise somebody something and then take it away,"
Recent employee losses to higher-paying entities raise the question of how vulnerable Cloudcroft is to the poaching of employees, especially in maintenance and police. Are our pay scales sufficiently competitive?
Maynard noted that Alamogordo's higher wages, just 16 miles away, make employee retention a constant challenge.
Trustee Hanna said, “Ask yourself, can you afford to lose the people we have working here right now?”
Mayor King said,
“We’re trying to be conservative. When we have the opportunity with the state to make budget adjustment resolutions in September, then we'll be able to get everything fixed. I hope we’re like, 'Okay we have more money than we thought. But we can't guarantee it right now because we don't know.”
Trustee Maynard said,
“You can afford it if you pay more for your water. You cannot afford to lose key people when we're so fragile; that’s the last thing our town needs.“
A motion by Trustee McCoy to make the final budget resolution approval contingent on future revenue numbers died for lack of a second. She then dropped the ‘contingency’ language and made another motion to adopt the resolution. Trustee Maynard seconded her motion. Trustees McCoy, Maynard, and Nick Hanna voted in favor of the budget resolution without amendments.
Shortly after the vote, Mayor King submitted the budget to the state — on time.
Trustee Tabitha Foster was not in attendance and did not vote. When contacted, she declined to comment on Thursday’s Council meeting.
This year’s budget process revealed significant damage to the village's operational management, stemming from failures in financial reporting during FY 23-24 under former Mayor William Denney. Recording was so shoddy that the village can not generate an accurate balance sheet to this day.
To understand the Village’s financial challenges, it helps to look at a couple of key issues.
The Revenue Reality Check
The council based its FY 25-26 revenue projections on the assumption of projected revenues of $1.7 million, the amount from three years prior.
One question being asked is, What can the Village do to improve revenue?
“I don't think we have a spending problem,” Trustee Hanna said.
Where might more money be found?
Small municipalities like Cloudcroft rely on a mix of limited revenue sources:
Gross receipts taxes on local sales
State and federal grants
Bonds or loans for major projects, and
Utility Bills, Property Tax
Water rates are a promising source. In fact, for several years, the Village has not included cost-of-living-based rate increases in water bills, forgoing additional dollars.
In New Mexico, municipal water and sewer rates can increase by council decision with no legal cap. The council can increase bills across the board to cover deficits; they can also focus increases on high-volume users.
Even if the Council approves a water rate increase tomorrow, software billing issues hinder the Village’s ability to implement the changes. This problem persists, as accurate and timely water bills are still a challenge.
The Council can also consider the property tax as a source of additional revenue. If the village takes this step, it has the potential to raise hundreds of thousands of dollars.
The second area to consider is how to manage costs and allocate our available funds efficiently.
Cost-Saving Strategies
Trim headcount. For example, the village’s largest operating expense is the police department. The budget funds four officers. Currently, the village has three positions filled. Can the village afford four full-time now?
Retain key employees; stop costly turnover. How can we retain critical staff when they can earn more elsewhere?
Delay hiring: The council could prioritize raises in certain departments and leave vacancies open until accounts are reconciled.
Delay non-essential purchases.
Explore shared services: Continue partnering with neighboring communities for services like emergency response through the Otero County Sheriff’s Department.
Delegate and update the personnel handbook: Allow high-performing department heads to determine raises within their council-allotted budget. Have them help create departmental pay scales within those constraints.
Why It Matters
The village faces a fundamental choice: invest in retaining experienced staff or accept the higher costs and service disruptions that come with chronic turnover.
Cloudcroft's narrow revenue base leaves little room for emergency response or strategic investments. Without new income sources—whether through updated utility rates, property tax increases, or expanded regional partnerships—the village remains financially vulnerable.
The approved budget represents a starting point. Council members expect to make adjustments throughout the year, decisions that will test their spending priorities and likely influence voter choices in the upcoming municipal elections.
Go deeper into the budget after this brief message.
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Go Deeper: Discussion and The Numbers
Here are the highlights from the budget-deciding discussions, broken down by topic:
Water and Public Works
The council “earmarked funds” for 15-30% raises for the current Water Operators and Public Works crew, bringing the water, wastewater, and sewer payroll budget to $542,000, which includes salary increases and two vacant positions with starting wages of $18 per hour with full benefits.
[Tuesday, July 29th]
Maynard: “We have lost these level one, two, three, and four water people that we cannot operate without to Alamogordo because they pay so much more money.”
McCoy: “What do we have in the village that we can offer that's different, not just monetary?”
Maynard: “If you don't keep up, you don't have any employees.”
“It's a false economy if you know you're setting up a revolving door. When Gail makes a good point—what can we offer them that will keep them in the village longer …we've got to have stability and it's going to cost some money.”
“We have the water increase ordinance amendment to the ordinance. On pay increases, if we can't hit a target that makes us competitive tomorrow, I think we need to show employees a path forward to be competitive within a reasonable period of time. And then that gives us a little bit of time to say is the income going to keep going up like we think and then address it with a water rate adjustment.”
“It's a reasonable place to pay big bills, so many leaks. If we don't keep a similar staff around it's going to cost more money and that's a tough pill to swallow.”
[Thursday, July 31st]
King: “I don't think it's fiscally responsible to give those raises.”
"What I’m proposing, is to have the raises, they’re still in here, but to not approve them for the August 15th payroll, but to extend them, don’t put them out until September, that first payroll in September.”
Trustee Nick Hanna pointed out that with Alamogordo only 16 miles away and with much higher wages for lateral employment, a commute for Cloudcroft residents is no feat. “I said last [meeting] that I drive twice the distance (from Alamogordo) to work. It is not going to stop somebody from taking care of their family,” he said.
Maynard: “Something that's complex, issues with which it's presented, the raises, I mean, if we were gonna go over and play raises again tonight, (the employees) deserve to be here. They didn't have any notice that this was gonna be back on the table. When we talked about the deficit, that was in front of everybody, it was acknowledged, I think, in many different ways.”
”The question of raising a water bill, all that was thrown out there, so no secrets? Whereas you come back in tonight, I mean, you see the audience (gestures to empty room). You didn't tell (JJ) you were gonna talk about this stuff. That's what agendas are for, to make sure that the public knows in advance. So if they have an interest, they can be here.”
“(The state) wants you raising your dues and fees and everything else on a schedule. At least address them manually. We have the cost of living adjustment, the goals, or an automatic [increase] in a water bill, but the base has not been adjusted. So that's why I was comfortable, if we are four years behind the numbers, that's what leads to these 20 or 30% adjustments. It's not that we're doing that; we're catching up on what we should have been doing every year. We're behind the curve to the point where we risk losing people.”
Law Enforcement
The council set aside a budget of $608,504 for payroll for four full-time police officers—a sum for salaries accounting for 34% of the projected General Fund. No capital outlay or equipment was included in Chief of Police Rolando Hernandez’s request, since the Law Enforcement Protection Fund funds them.
[Tuesday, July 29th]
Maynard: “That's $150,000 per person. It's a lot of money… I'll make a motion that we include $608,504 as salaries to include part-time community service or full-time certified officers with no capital outlay or equipment included.”
Finance and Administration
The Finance budget was accepted at $400,686, which includes High Water Mark’s Chief Financial Officer Karen Gutierrez’s contracted service and two full-time positions with benefits: Finance Director Sylvia Hall and one vacant Finance Clerk.
[Tuesday, July 29th]
Gutierrez: “[I’m] not sure if that finance position was in the original budgets or not, but that includes two full-time positions with full benefits. So, if that position does not happen, you'll have salary savings.”
Motor Vehicle Department
While the village’s Motor Vehicle Department (MVD) remains closed for the time being, the motion to approve the MVD budget passed, in hopes of renewing the service in Cloudcroft.
[Tuesday, July 29th]
Maynard addressed Utilities and Interim Clerk Ashley White: “How's the office? I mean, you're the only one up there and you're answering phone, and you're taking people that are coming. How's it working for you?”
White: “It’s insane.”
Maynard: “Do you think having another person there would help in the front?”
White: “Probably.”
The motion to approve $64,951 in the budget for an MVD Clerk, including additional duties, passed.
[Thursday, July 31st]
King: “I want to keep (the MVD) in Cloudcroft, but I almost like to make it private. There's some interest from Alamogordo… I’d still like to have that in the village, but have it private. I'm not a huge government guy. We have a private, we'd still get the people to come out here, and we wouldn't have to take that $64,000, so that would go towards our deficit.”
Other Motions Made
The council approved $110,000 in the budget specifically for remote-read water meters, with Public Works Supervisor JJ Carrizal noting they have about 700 more meters remaining to install.
The Library budget was accepted at $91,054, which includes Director Sandra Barr’s position and also accounts for Barr’s triple duties as the Planning & Zoning and Court Clerk.
The Community Center budget was accepted at $18,000, which provides maintenance and janitorial service costs for the Old Red Brick Schoolhouse. The Community Center includes everything in the building but the Library and Teen Center rooms, which are funded through the Library budget.
A partial Lodger’s Tax Allocation passed. The approval is through the end of December, with conditions for review of how the money is spent. A re-evaluation will occur from January to June 2026 to determine if the village is getting their money’s worth.
The Municipal Court budget was accepted at $20,090.
$5,500 was retained for the Senior Center.
In a first for Cloudcroft, the council voted to increase the governing body budget to $29,850, with $15,000 explicitly earmarked for governing body compensation, which can only begin at the next election cycle. If the money is evenly split between the mayor and trustees, it comes out to an annual stipend of $3,000 per council seat.
What’s Next?
Both King and McCoy told the Reader they intend to run for office this November.
Through the Village of Cloudcroft Facebook page on Friday morning, King promised a Budget Adjustment Resolution on the September agenda.
“When I got appointed mayor, the first thing I promised myself was I wasn't gonna quit. The second thing was, I didn't want to do to the next council the same thing that was done to us. Other than Tabitha, who's not here, unfortunately, she's the only person who's guaranteed to be here on January 1st, 2026. So, Jim and Nick aren't running. Gail and I are going to be running, so it can be just a table of four brand new people,” King said.
During the Thursday night budget resolution meeting, the council mentioned an upcoming Special Meeting, TBD.
We’ll keep you posted.
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