§ 3-4-4 NMSA 1978

If a majority of the votes cast are in favor of disincorporation, the municipality shall be disincorporated after provision has been made for payment of its current indebtedness, contracts and obligations, and for levying the requisite tax to do so. The current indebtedness, contracts and obligations do not include funded or bonded indebtedness nor any contract whose termination date is more than one year beyond the date the election was held.