Alamogordo officials say New Mexico Finance Authority priced utility loan at 4.38%; funds to be available in two weeks

Alamogordo — City financial advisers told the Alamogordo City Commission on Feb. 11 that the New Mexico Finance Authority (NMFA) priced bonds this morning for a 25-year loan at 4.38% and that the city’s proceeds will be available after closing in about two weeks.

John Archuleta, of Bosque Advisors, the commission’s financial adviser on the transaction, said, “we had to sell this morning at a 4.38% for a 25 year financing.” He said the financing produced roughly $25,530,000 of par financing and an approximately $2,545,000 premium paid by purchasers, which together brought the transaction to about $28,000,000. Archuleta added that the city’s annual debt service payment will be “about a million 800,000 on a yearly basis.”

Why it matters: Commission discussion and staff statements tied the planned borrowing to the city’s water and sewer infrastructure work. Commissioners and staff said the first tranche of projects will be financed through this loan and repaid through utility rates rather than the general fund.

City presentation and next steps Chris Muirhead (presenter) summarized the timeline, saying the NMFA will close the transactions and “the money will be available 2 weeks from today,” after which project work can begin. The presenters told commissioners that the ordinance previously adopted by the commission set parameters for the borrowing (the ordinance was referenced at the meeting but no ordinance number was given in the transcript) and that NMFA’s pricing fell within those parameters.

Commissioners and staff discussed project sequencing. A city consultant, Justin Boyle, described one specific replacement scope — a mainline replacement along the Highway 54/Main corridor — noting it will be a 12-inch waterline replacement across both sides of the road and include pressure-control (PRV) work at one crossing. Boyle warned that the bridge crossing could extend design time to about four or five months, while other projects listed on the agenda were “ready to go.”

No formal commission vote recorded Commissioners discussed the pricing and project readiness, but the transcript shows no commission motion or formal vote to accept the NMFA pricing at this meeting. Staff said the closing and deposit of loan proceeds will occur after NMFA’s closing; the commission did not take further formal action on the financing during the Feb. 11 meeting.

Funding limits and time window cited by staff Presenters and staff referenced limits discussed earlier in the process: an ordinance had set a not-to-exceed borrowing parameter and a not-to-exceed interest rate (the transcript referenced a not-to-exceed borrowing amount of $32,000,000 and a not-to-exceed interest rate of 10%, but did not supply an ordinance number). Staff also cautioned that projects financed under the program have time limits (a three-year window was mentioned by staff in describing program sequencing), and that this loan represents the first tranche of planned projects rather than the entirety of the city’s long-term capital needs.

What remains unclear from the meeting The commission did not provide a numbered ordinance citation or list of the precise projects that will receive funds in the transcript beyond general references to water and sewer infrastructure and the Highway 54/Main corridor work. Several dollar figures and program totals were discussed (par amount, premium, $28,000,000 total, and references to $30,000,000 and $130,000,000 program totals), and presenters used those figures to describe sequencing; the transcript does not reconcile every figure into a single definitive project list.

Looking ahead Presenters said design work will continue for later tranches and that staff will return with additional project details and timelines as designs and procurements proceed. The commission did not take a formal vote on the financing at the Feb. 11 meeting.