With nearly $5B unspent, legislative staff recommend tighter controls on large public projects - Austin Fisher, Source New Mexico
Billions in public funds meant to pay for new buildings, vehicles and equipment for local communities throughout New Mexico have not been spent, and legislative staff are recommending state officials create a new government office to help complete projects.
At the end of September, there was nearly $5 billion in unspent funds set aside for 4,900 projects funded by the state’s “capital outlay” program, state analyst Cally Carswell told the Legislative Finance Committee on Tuesday.
Lawmakers pass a capital outlay bill each year to pay for all or part of new infrastructure or construction — things like buildings, parks, roads or acequia upgrades.
There are 766 active projects, which lawmakers have given at least $1 million for fiscal year 2024, accounting for $3.6 billion in total, according to data produced by legislative staff.
Of those, 415 are on schedule, 170 are behind schedule, and 181 have had no activity, or the local governments responsible have not sold the bonds needed to raise the money, or are facing “significant obstacles to completion,” according to the report.
These include, for example, the relocation of the Guadalupe County Magistrate Court, a few senior center projects, numerous projects with the city of Santa Fe, money set aside for road construction and money for a therapeutic group home run by the New Mexico Children, Youth and Families Department.
Only 11 projects funded with more than $1 million have been completed or have been granted an extension, according to the LFC data. This includes the Vladem Contemporary Museum of Art in Santa Fe, upgrades to the Albuquerque Police Department evidence lab, a vehicle for the Albuquerque Fire Department, and upgrades to a building at Eastern New Mexico University.
TRACKING TAXPAYER FUNDED PROJECTS
Legislative Finance Committee staff are working with the state Department of Finance and Administration on a proposal to create a centralized “infrastructure division” within the department, with four goals:
1. Provide more support with state officials planning and developing projects before they get any funding.
2. Help local communities figure out and actually use the appropriate sources of money for their projects to get them done more quickly.
3. Track projects regardless of how they are funded.
4. Increase capacity for grant and project management support for communities that need it. “Not just spending money, but actually getting projects completed,” Carswell said.
Earlier in the year Carswell told lawmakers that construction costs are increasing, and contractors are having difficulty attracting and retaining qualified workers to meet demand for construction in the state.
In her update Tuesday, she said the situation remains the same.
Carswell said almost all of the 1,400 projects lawmakers approved in the last legislative session were funded with money out of the state’s General Fund, its biggest single pot of public money.
The source of the money matters because the law that authorizes spending requires each capital outlay project to spend at least 5% of the money within a year. When that doesn’t happen, the money gets pulled back into the General Fund, Carswell said.
Rep. Jack Chatfield (R-Mosquero) asked how paying for capital outlay projects using the General Fund rather than by selling bonds affects the state’s score from bond rating agencies.
It does not put the state in a bad position, Carswell said.
But she cautioned that if state officials borrow too much money in order to pay for capital outlay projects, that could put them in a worse position with the rating agencies.
“It is an issue that they have already flagged to the Board of Finance as something that they are concerned about,” she said.
She suggested lawmakers change state law to lower the maximum amount of money they can borrow each year to pay for these projects.
Three key state agencies that manage most capital outlay money: the Department of Finance and Administration, the Indian Affairs Department, and the New Mexico Environment Department, she said, and each issued grant agreements for eligible projects.
Now, communities need to keep better track of signing those agreements and spending capital outlay money, Carswell said. Lawmakers can use the data about projects given at least $1 million to perhaps call those local governments and encourage them to get moving, she said.
The LFC expects lawmakers to have billions more in capital outlay requests during the 2024 session. If approved, those projects are likely to face a “construction market saturated if not oversaturated, where it’s difficult to start new things and complete those already in the pipeline,” Carswell said.
Anticipating higher costs, some state agencies and higher education institutions have already asked for more money on top of their original requests for next year. Carswell said this means local governments are already facing significant changes in the expected project costs over the summer and fall.
Local governments and others who have received these capital outlay funds have until Nov. 22 to provide information to state agencies about unexpectedly high costs for existing projects, she said.
The goal for these reports is to inform Legislative Finance Committee analysts about which projects are stalled, delayed or otherwise facing challenges due to cost increases. Carswell testified that the LFC expects to present the results of that survey to lawmakers in December.
And in 2025 and beyond, Carswell said she recommends lawmakers consider setting an earlier deadline for local capital outlay requests, and creating a basic method of vetting and tracking projects that get state money.
That could allow lawmakers to fund planning and design separately from construction, so that the larger amounts of money would be reserved for major construction projects with proper plans and that are ready to go, she said.
House Appropriations and Finance Committee Chair Rep. Nathan Small (D-Las Cruces) said lawmakers have asked Gov. Michelle Lujan Grisham’s administration to standardize its capital outlay requests, and that “there’s an openness from the executive to do that.”
Small said as oil production becomes increasingly uncertain in the future, the state’s entire system for funding capital outlay projects comes more into question, because any variation in that industry affects the entire program.
Small said he is reluctant to constrict too tightly the amount of money provided for capital projects.
”But clearly we need to establish other funding opportunities and other sources to support capital (outlay),” he said.
BernCo jail transfers more inmates to thinly stretched Santa Fe prison - Albuquerque Journal, KUNM News
The state Corrections Department is transferring inmates to the Santa Fe Penitentiary in an attempt to lighten the load on Bernalillo County jail staff.
But, as the Albuquerque Journal reports, officials say the Santa Fe Penitentiary is facing a staff vacancy rate of more than 40%.
Staff shortages at jails and prisons has been an issue for years, though the Santa Fe jail has a vacancy rate much higher than that of the Metropolitan Detention Center – where the rate hovers around 33%, according to MDC spokesperson Candace Hopkins.
Hopkins says seven inmates were transferred to the Santa Fe prison earlier this month. In total, 32 have been moved over the past two months.
These transfers come as local law enforcement prioritize arrests to tackle gun violence in Bernalillo County.
Las Vegas Mayor Trujillo resigns - Las Vegas Optic, KUNM News
The mayor of Las Vegas, New Mexico, has resigned from office.
The Las Vegas Optic reports Louie Trujillo’s resignation Tuesday is effective immediately.
In a letter, Trujillo cited his “physical, mental and spiritual well-being,” as the reason behind suddenly stepping down. He went on to thank the residents of the northern New Mexico city for entrusting him with the office.
Elected in 2020, Trujillo’s term wasn’t scheduled to end until the next local election two years from now. It was initially set to conclude this coming March, but was pushed out more than a year when Las Vegas opted into the Regular Local Election.
Trujillo led the community through the Calf Canyon/Hermit’s Peak Fire, the state’s largest in recorded history, and the ongoing recovery. The Optic reports he saw significant turnover in his cabinet during his tenure, including having to replace his city manager, city attorney and police chief.
City Councilor and Mayor Pro-Tem David Romero will take over as acting mayor until the city holds a special election to replace Trujillo.
The date of the special election has not yet been confirmed.
New Mexico Tech gets $44 million for carbon storage study – KUNM News
New Mexico Tech in Socorro will receive over $41 million in federal funds for a site characterization study on carbon storage.
Senators Martin Heinrich and Ben Ray Luján along with U.S. Rep. Gabe Vasquez jointly announced the funding Tuesday. The study will focus on three proposed sites for carbon storage in the San Juan Basin in northern New Mexico.
The money is part of $444 million from the U.S. Department of Energy’s Office of Fossil Energy and Carbon Management for 16 carbon storage projects around the country. The funds come from the Bipartisan Infrastructure Law.
New Mexico Tech has already conducted studies on subsurface conditions in the San Juan Basin. The new funds will allow the university to move ahead with detailed planning and permitting.
Illegal border crossings into the US drop in October after a 3-month streak of increases - Associated Press
Illegal border crossings from Mexico fell 14% in October from a month earlier, U.S. authorities said Tuesday, ending a three-month streak of big increases.
U.S. officials highlighted the resumption of deportation flights to Venezuela on Oct. 18, shortly after Venezuelans replaced Mexicans as the largest nationality appearing at the border. Arrests of Venezuelans plummeted 45% to 29,637 from 54,833, still second only to Mexicans. Arrests of Venezuelans fell even more, by 74%, in the second half of October from the same period of September.
Arrests for illegal crossings totaled 188,778 for all nationalities in October, down from 218,763 in September, which was the second-highest month on record. Arrests had more than doubled over the previous three months as migrants and smugglers adjusted to new asylum regulations introduced in May.
Arrests of Chinese rose slightly to 4,247, with 99% of them in the San Diego area, as more fly to Ecuador and make their way to the U.S. border amid a faltering economy at home.
"We continue to enhance our border security posture and remain vigilant," said Troy Miller, the acting CBP commissioner, who urged Congress to approve President Joe Biden's supplemental budget request for $13.6 billion in border-related spending.
While crossings remain unusually high, the monthly decline is a rare piece of welcome news for a White House that has been criticized on the right and left flanks for its immigration policies. Panama has yet to release October figures for crossings through the notorious Darién jungle, which totaled more than 400,000 during the first nine months of the year, largely Venezuelans.
Biden, a Democrat, has adopted an approach at the border that combines new legal pathways to enter the country with more restrictions on asylum for those who cross the border illegally. Including those legal pathways, migrants crossed the border 240,988 times in October, down 11% from 269,735 in September.
More than 44,000 people entered from Mexico with appointments on the CBP One mobile app, bringing the total number of scheduled appointments on the app to 324,000 since it was introduced in January. Additionally, nearly 270,000 migrants from Cuba, Haiti, Nicaragua and Venezuela have entered the country by applying online with a financial sponsor and arriving at an airport.