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Rio Rancho staff propose $32 million revenue bond to finance Unser Boulevard widening and Fire Station 8
Summary
City staff proposed issuing a $32 million revenue bond, pledged to state-shared gross receipts tax, to fund $16.2 million toward Unser Boulevard phase 2B and $13.7 million toward Fire Station 8; staff outlined timelines, additional federal and state grants, and scheduled ordinance readings in March and a bond sale in April.
City of Rio Rancho staff on the governing body’s work session presented a plan to issue a $32 million revenue bond to finance two capital projects: the Unser Boulevard widening (phase 2B) and construction of Fire Station 8.
The proposal matters because it would use a limited-obligation revenue bond — pledged to a portion of the state-shared gross receipts tax — to fund major transportation and public-safety projects without a voter referendum; staff said the governing body’s approval is required to proceed.
Director Jaramillo opened the presentation by describing staff’s proposal and the difference between general obligation bonds and revenue bonds. Staff said the revenue bond would not require voter approval and would be secured by a pledged revenue source; staff identified the pledged source as the state-shared gross receipts tax. Don Martinez, capital and grants supervisor, outlined the proposed allocation of bond proceeds and related funding sources: staff proposed allocating roughly $16.2 million of bond proceeds toward the Unser Boulevard reconstruction and $13.7 million toward Fire Station 8, with the remainder for issuance costs, contingency and design for a multigenerational center.
For Unser Boulevard (reconstruction from Cherry Road west), staff presented an anticipated April bond sale and a May closing after which funds would be available. The project funding plan includes approximately $11.6 million in federal grants, $2.0 million in New Mexico match funds and $2.0 million in road impact fees in addition to the bond proceeds. Staff said the Department of Transportation (DOT) approvals — including environmental and right-of-way certifications required by federal TIP funding — are underway and the city will request federal reimbursement as eligible.
For Fire Station 8, staff said design is underway and estimated total project cost at about $14 million after accounting for prior design expenditures and a remaining state grant balance. Timelines presented estimate construction start dates in 2026 and completion during fiscal year 2027 for both projects in staged fashion; staff also described projected cash-flow timing tied to federal reimbursements and a planned $9 million transfer from the strategic initiative fund to bridge cash until reimbursements arrive.
Staff reviewed the procedural steps needed to issue the revenue bond: a parameters ordinance with first reading proposed for March 13 and second reading on March 27, followed by a negotiated bond sale in April and closing in May. Staff noted the city already has revenue debt pledged to the state-shared gross receipts tax for other projects and that some general-obligation debt is currently outstanding.
Councilors asked clarifying questions about DOT certifications, timing of federal reimbursements and the source pledged to the bonds. Staff confirmed TIP/DOT certification steps are underway and that federal reimbursements can take months for processing; staff said the city budgeted for additional debt service in its five-year plan to anticipate issuing revenue bonds. No formal vote was held; staff will return with the parameters ordinance for readings in March.
