Truth or Consequences Acting City Manager Traci Alvarez submitted a one-page document in response to City Commissioner Randall Aragon’s request a month ago for a capital projects report at the commission’s March 10 meeting.
Aragon asked Alvarez to “identify funding sources” in addition to listing the city’s current and planned capital projects, but Alvarez only partially delivered on that request. She left out the most important funding source: what public funds will be used to pay off the city’s ballooning debt.
The report lists 14 projects for which combination grant/loans have been secured. The grants total over $7.1 million. The city’s cash matches for those projects total nearly $343,000, and the loans to pay for them total nearly $6.6 million.
The grant-loan ratio is nearly 50-50, for a grand total of a little over $14 million in current capital projects.
City Commissioner Frances Luna praised Alvarez for bringing “$7 million in free money” to the city. Neither she nor her fellow commissioners commented on the accumulated debt, which city taxpayers and fee-paying utility customers will be required to pay off.
In addition, the city has pending grant/loan applications for at least $17.65 million more in capital projects, which would add about $8.8 million more to city debt, if the 50-50 ratio holds.
Seven of the 19 additional capital projects for which funding is being sought only have funding agencies identified, with no project cost estimate given, meaning the city’s debt load could be even higher than the $7 million already secured by loans and likely $8.8 million that is pending.
During the March 10 city commission meeting, Alvarez handed over the one-page report to the city commission, but did not make it available to the public. The Sun received the document through an Inspection of Public Records Act request.
Alvarez provided few details about the nature or need for the projects, either in the report or orally. She did caution the commissioners not to “freak out” at the last project listed on the report. Several people have approached her recently, she said, to request the city provide water and sewer services to land owners across the Rio Grande. “Careful consideration” would be required to assess the “feasibility” of providing such services, Alvarez said.
None of the city commissioners asked any questions about the projects or the additional debt to be borne by local residents.
The Sun contacted the city commissioners and Alvarez shortly after the meeting to obtain more information, in particular requesting identification of what municipal funds the city will tap to pay for its loan debt and cash matches. As yet, none have responded.
T or C’s 2019 year-end audit (the most recent available) tallied the city’s long-term debt at $17.9 million, but interest was not included. Accounting rules define long-term debt as liabilities extending beyond one year and short-term debt as liabilities to be paid off in less than a year. Therefore the yearly loan payments on the long-term debt were put in the short-term-debt category, meaning the $17.9 million was debt owed for the years 2020 and beyond.
The city’s long-term assets were $34 million compared to its long-term debt of $17.9 million, according to the 2019 year-end audit.
The long-term debt added in fiscal year 2020 will be made public when the State Auditor’s Office releases the 2020 year-end audit, probably this month.