Truth or Consequences city commissioners passed a resolution at the June 12 meeting that promises the city will pay New Mexico Finance Authority $1.6 million in “cash match” and take out a $1.6 million loan in exchange for a $14.4 million grant. The $16 million grant/loan will be expended on emergency waterline repairs.
This is $1.6 million more than the city was hoping to pay, but the city commissioners accepted the conditions of the NMFA’s grant/loan/match with little discussion.
The application the city commission approved Sept. 29, 2023 to the Water Trust Board that is administered by the NMFA requested a $16 million grant in exchange for the city’s $1.6 million cash match.
But the additional $1.6-million loan the city will have to pay back comes with very generous conditions. It’s a 20-year loan at .25 percent interest.
The loan payments will be made from water-utility fees collected, according to Assistant City Manager Traci Alvarez, who confusingly added that “The water department can’t take on more debt.”
The $1.6 million cash match will be paid with the $1.6 million U.S. Senator Martin Heinrich awarded the city in 2023 from “congressional direct spending” funds.
The $16 million “is $4 million short” of the money needed to fix emergency waterline repairs, Alvarez said, referring to costs and pipe locations outlined in a three-page preliminary engineering report prepared by Wilson & Co. a few years ago. That engineering report can be found in the Citizen’s prior article:
Alvarez said construction repairs won’t start for a year, since final designs will take up to nine months and then the project has to go out to bid.
Water and Wastewater Director Arnie Castaneda, in a May “water update,” reported that $4.4 million in Colonias Infrastructure Funds had been awarded to the city in 2024 for critical waterline repairs and would be added to the $16 million, which does not match Alvarez’ claim the city is “short.” The $4.4 million award has not come before the city commission for acceptance.
Presenting this financial issue in narrative format is too confusing. Readers would benefit for a standard accounting work sheet presentation with explanatory notes keyed to the figures.
This is too muddled an issue. We need transparency and clarity to understand what is history, fact, and mere wishful thinking or projections.
Finally, we need accountability of the acts and omissions. Please name names!
So, the money is there? Or we need a $1.6 million loan? Or that’s covered by a congressional grant? Or we need $4 million? Or that’s already there? Could someone please help my struggling reading comprehension?
The city commission has agreed to accept, from the NMFA, which administers the Water Trust Board money, a grant/loan with a cash match requirement. No money yet. The city will get the money after it proves it has $1.6 million cash match, turns in plans that schedule monthly draws it needs for construction. The city will use the $1.6 million cash match to pay for the engineering firm’s plans and other pre-construction needs.
$14.4 million grant
$1.6 million cash match (city will pay from direct congressional spending grant that Heinrich gave the city last year)
$1.6 million loan the city must take out with NMFA
Thank you, Kathleen. Am I now understanding correctly that there are two $1.6 million amounts in question – one to match the grant and one to get the project started?
Yes, there are two $1.6 million amounts. $1.6 million “cash match” and the city has to take out a $1.6 million loan with NMFA. Getting the money is a process. The process for gov. grant/loans:
1. apply (city applied Sept. 2023, asked for $16 million and said it would put up a $1.6 million match, which was U.S. Senator Heinrich’s “direct congressional spending” grant he gave the city last year. The application included the 3 page prelim eng. report by Wilson & Co. that’s linked to this article. The city said it had a water system emergency and would fix leaks south of the hospital and radiating out from Veater St.
2. gov. agency makes a counter offer and lays out its conditions. This is where the process is at right now. NMFA offered a $1.6 million loan at .25 interest for 20 years and a $14.4 million grant and said the city would also have to put up a $1.6 million cash match. NMFA or any gov. agency wants to see the local gov. have ‘skin in the game.’ The city will use Heinrich’s $1.6 million to pay for all the preliminary engineering and bid documents and financial counsel, etc. NMFA also gave other conditions, primarily that the city fill out the 3 page prelim eng study to full-blown plan with monthly draws on the $14.4 million grant estimated.
The full blown plan and going out to bid will take about a year. That’s when the city would get money from the $14.4 million in monthly draw downs.
I think the city has the $1.6 m from Heinrich in hand. So, now that the city commission has agreed to accept the deal from NMFA, design can start.
The city will also have to work on taking out the $1.6 million loan with NMFA. No timeline was given for that.