NMFA outlines $320M in Water Trust Board recommendations and asks Legislature to pilot faster awards

The New Mexico Finance Authority told the Legislature’s Oversight Committee on Nov. 3 that it is recommending authorization for 113 Water Trust Board projects and laid out steps to accelerate awards and help smaller, rural applicants. NMFA staff said the recommended list totals roughly $522 million while projected available funding for 2026 is about $320 million.

NMFA CEO Marquita Russell explained two recent policy changes that shaped this year’s list: wastewater projects are now eligible for Water Trust Board funding, and NMFA may use Water Project Fund dollars to hire technical assistance — engineers, attorneys and accountants — to prepare planning documents or to facilitate regionalization for small systems that lack staff. "This is the first time we'll see wastewater as an eligible water project," Russell said, noting wastewater projects tend to be larger and harder to phase.

AJ Ford, vice chair of the Water Trust Board and executive director of the New Mexico Municipal League, framed the changes around public safety and system failures. Ford said the board remembers 2017 when "there was no money in 2017 for water," and emphasized that long delays and aging pipes create hazards for public-works crews and communities. He cited Portales wells that have lost roughly 60% of production as an example of the scale of need.

Why it matters: NMFA reported 114 complete applications this cycle totaling about $525 million; NRFA staff recommended 113 projects for authorization but warned the request amount exceeds available funds. With $320 million currently projected from severance tax bonds, Water Trust Fund distributions and carryover, the agency is asking the Legislature to consider a pilot that would let NMFA open application rounds, including separate small-system rounds, without waiting on post-appropriation legislative authorization.

Supporters of the pilot said it would allow small communities more time to apply and to use NMFA-contracted technical assistance; it would also smooth staff workload and reduce the lag between application and construction. NMFA staff said a rewrite of the process could cut about 180 days from the schedule while preserving readiness checks. Opponents and some legislators cautioned that removing a legislative authorization step raises oversight and political-consequence questions and asked for a time-limited pilot and safeguards.

Lawmakers pressed NMFA on timelines and readiness. Senator Michael Padilla asked whether a listed 18–24 figure on page 3 referred to months; NMFA confirmed that the full cycle — from notice to proceed through mobilization — typically spans about 18–24 months. NMFA staff emphasized that awards are generally "last dollar" (they fund gaps after applicants assemble other resources) and that match requirements vary by project type and the applicant's median household income; some projects may receive a 0% match while others require up to 20%.

Technical assistance for small and rural systems was a recurring theme. NMFA said it has used contracted engineers and facilitators to produce planning documents and to help systems become "readiness to proceed" eligible; the Municipal League and NMFA said they can dedicate contractors to help smaller clients through the application process. Legislators suggested greater use of regional Councils of Governments (COGs) and asked NMFA to improve notification and public reporting for applicants that are denied so legislators and community supporters can intervene early.

Funding and schedule: NMFA told the committee it expects to make grants and loan approvals in May (funding may be split across two cycles because of the volume). The readiness review — audits, water rights, plans and specs — remains a requirement prior to closing on construction awards. NMFA warned the committee that because many wastewater requests are large and hard to phase, a portion of the request list may be bypassed if funds cannot cover those projects.

The committee asked NMFA to return with clearer proposals for a pilot timeline, early-notification practices for denied applicants, and more detail on how contractors and COGs will be deployed. The oversight panel sought an endorsement to send the authorization list to the Legislature if NMFA and its partners can provide those refinements. The committee paused for lunch and later approved minutes from a prior meeting by motion (Sen. Michael Padilla moved; Rep. Jack Chatfield seconded).