The City of Española has more than $1.5 million in opioid settlement funds in its Fiscal Year 2026 budget, but the Social Services Department has just gained access to them within the last month.
The city has yet to release an official plan on how it will allocate these funds, approve expenses or get community input on their use.
Social Services Department Director Michelle Fraire wrote in an email that she has been in consistent communication with the city’s finance department and city leadership in an attempt to access the money for use by her department. Fraire was hired in April 2024 and the city received its first disbursement of opioid settlement funds in October 2022.
“In the past, I did not have the opportunity to access these funds until July/August 2025,” Fraire wrote. “While this has presented some limitations in fully implementing certain initiatives, the department has continued to find alternative ways to support the community and move forward with available resources and the support from several collaborators and successful partnerships.”
Emergency Order
City Councilor and Mayor Pro Tem Peggy Sue Martinez wrote an undated letter to Gov. Michelle Lujan Grisham to request that she declare a public safety emergency in Española, Rio Arriba County and the surrounding pueblos due to the rising crime and related social and behavioral health crises.
Grisham, on Aug. 12, issued an executive order and declared a state of emergency due to a “surge in violent crime, drug trafficking, and public safety threats,” that is overwhelming public resources. She also allocated $750,000 to state and local agencies to address these problems.
In her letter, Martinez specified five main areas of need for the city, which include:
• Increased coordination with state law enforcement to “combat drug trafficking and violent crime.”
• Funding for public safety and community service personnel, including mental health professionals.
• Support for behavioral health and substance-use disorder treatment services including “detox and long-term recovery resources tailored to our region.”
• More license plate readers and cameras that track vehicle movements.
• “Enhanced support for intergovernmental cooperation.”
Fraire said that while the opioid settlement funds will play an important role in how the community addresses these problems, the emergency declaration also has a purpose.
“Used together, they can create a more effective, strategic, and compassionate response to the challenges our community is facing,” she wrote.
Spending the opioid settlement funds is not straightforward and often requires lengthy coordination between multiple departments and stakeholders, Fraire wrote.
“An emergency declaration, on the other hand, allows for a more immediate and coordinated response,” she wrote. “It elevates the urgency of the situation, streamlines access to broader resources, and can trigger interagency cooperation at the local, state, and federal levels. In many cases, emergency declarations create the framework necessary to break through bureaucratic barriers and move forward with solutions more quickly and comprehensively.”
While correctly using the funds is a lengthier process, the money can be used to address issues listed in Martinez’s letter to the governor’s office.
According to the opioid settlement agreement, the money can only be used on approved activities, which include core abatement strategies, treatment, prevention and other specified uses. It includes the use of funds for the treatment of opioid use disorder (OUD), as well as co-occurring substance use disorder (SUD) and mental health disorders.
This includes the creation and expansion of treatment programs, hiring and training mental health professionals, as well as providing housing.
In some cases, the money can also be used for family members of those with opioid or substance use disorders.
According to the allowed list of uses, funds can “provide treatment of trauma for individuals with OUD (e.g., violence, sexual assault, human trafficking, or adverse childhood experiences) and family members (e.g.,surviving family members after an overdose or overdose fatality), and training of health care personnel to identify and address such trauma,” according to the agreement.
Martinez cited the need for intergovernmental collaboration so the city, county and neighboring pueblos could “ensure culturally responsive, community-based approaches to problems in the community.”
The settlement also allows for the creation “or support culturally appropriate services and programs for persons with OUD and any co-occurring SUD/MH conditions, including new Americans.”
Martinez and Mayor John Ramon Vigil did not return phone calls or respond to text messages asking about the city’s lack of spending of the opioid settlement funds.
FY 2026
The city council approved the Fiscal Year 2026 budget on July 30, which shows the city’s opioid settlement fund has $1,421,924. During the council meeting, Deputy Finance Director Adam Bailey said the city is expecting to receive an additional $87,736 later this year, for a total of $1,509,660.
The city has allocated $220,090 to fund employee wages and related expenses, equipment and more.
This includes $95,090, or about 43%, for employee related expenses:
• $65,822 for full-time positions
• $5,036 for Social Security and Medicare payroll taxes
• $13,552 for New Mexico Public Employee Retirement Association contributions
• $7,764 for employee health care contributions
• $1,974 for retiree healthcare
• $395 for unemployment insurance
• $547 for workers compensation insurance
• Equipment purchases totaling $93,000, or about 42%:
• $90,000 for the purchase of two vehicles
• $3,000 in non-capital spending
The remaining $32,000, or about 14%, is allocated for employee training or other expenses that may include direct services:
• $10,000 for unspecified contractual services
• $5,000 for employee professional development
• $17,000 for unspecified harm reduction activities
Fund History
Budget and finance documents obtained by the Rio Grande SUN through an Inspection of Public Records Act request show the city has improperly spent opioid settlement funds in the past.
According to these documents, the city spent $58,390 of the funds on payroll expenses and an equipment purchase in Fiscal Year 2023. This included one electronic SmartBoard and accessories for $10,192.84 to be used by the Española Fire Department for training. In Fiscal Year 2024, the city used $17,827.09 of settlement funds for payroll expenses.
All of the money was returned to the opioid settlement fund because they were determined to be unapproved opioid expenditures, and the expenses were instead paid for using general funds.
Public discussions on how to properly use the money date back to at least August 2023.
During an Aug. 8, 2023 city council meeting, then-interim city manager Sally Baxter, Vigil and then-city attorney Charles Rennick discussed how the city had improperly spent the funds and plans for future spending.
They originally thought they could use the money for wages and police retention payments, Baxter said according to the minutes.
“We have taken a step back on that,” she said, according to the minutes. “Before using those funds we need to ask the city attorney to check us on that. Then use of funds will go before the governing body as a whole. There will be no staff decisions.”
Rennick recommended that the city not have an ad hoc approach to spending the funds, but instead, have a designated employee, board or subcommittee to oversee needs assessment and possible prevention and treatment strategies. He also suggested creating a public dashboard to show how funds were spent, report outcomes and track key opioid indicators.
The city has not implemented these suggestions.
The city council, on Oct. 8, 2024, passed a resolution approving $186,125 for the Social Services Department for the following expenses:
• $5,000 for a resource fair
• $5,000 for advertisements and promotional materials for opioid education and prevention outreach
• $3,000 for two iPads
• $90,0000 for two vehicles
• $83,125 for employee wages and related expenses
Although approved, it was not spent and many of the same expenses appear in this year’s budget, including the $90,000 vehicle purchase.
The city has yet to hire a second full-time employee for the Social Services Department.
The city posted a job advertisement for the Social Services specialist position on April 30, which states the position will remain open until filled. The job listing remains on the website as of press time. An Inspection of Public Records Act request for all submitted applications has been pending with the city since Aug. 17.
Future
Fraire wrote that on May 28, the Social Services Department was formally recognized as a stand-alone entity within the city structure, and that this will make it easier for the employees to better serve Española residents.
She said her goal is to use these funds to expand access to harm reduction services, peer support programs, overdose prevention initiatives, housing support for individuals in recovery, and comprehensive mental health care to our children and families in the community.
“Many of our community members are in crisis and simply trying to survive,” she wrote. “They need compassionate, consistent, and culturally competent care and these funds could be the bridge between life-threatening circumstances and long-term recovery. This isn’t just about policy, it’s about people. These funds can provide real hope and healing for some of the most vulnerable individuals in our city.”
Wheeler Cowperthwaite contributed to this report.