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Council approves up to $22.15 million in gross‑receipts tax bonds after MFA reserve amendment
Summary
The council authorized gross‑receipts tax improvement revenue bonds not to exceed $22.15 million, approved a staff amendment to raise an MFA reserve requirement to 200%, and recorded a roll‑call vote adopting the ordinance as amended.
The City Council on June 15 approved an ordinance authorizing the issuance and sale of gross‑receipts tax improvement revenue bonds not to exceed $22.15 million and a maximum 20‑year maturity, following an amendment to meet New Mexico Finance Authority reserve requirements.
Adolfo Cardenas of the Treasury Department told the council the pledged revenue sources would be the city's municipal gross receipts tax (1.325% and a subordinate 0.5%), and that staff's target was to raise roughly $20 million for maintenance and capital projects while using excess capacity to cover issuance costs. Cardenas outlined preliminary allocations: approximately 60% for maintenance and upkeep (streets, fleet, facility ADA work, fire‑station improvements) and 40% for targeted projects including a public‑safety training facility and recreation center design work.
City staff said a requirement from the New Mexico Finance Authority (MFA) necessitated a change to reserve‑fund language. The council approved an amendment to sections 17E and 20A.3 of the proposed ordinance to raise the reserve multiplier to 200% of the maximum annual principal and interest coming due in any subsequent fiscal year, aligning the ordinance with MFA policy.
Eric Harrigan, the city's municipal advisor with RBC Capital Markets, estimated an average financing rate of about 3.2% based on market conditions at the time and explained that the MFA will sell bonds in late August, at which point interest rates will be locked for the borrowing.
The council moved to amend the ordinance to reflect the MFA requirement and then voted to adopt Ordinance 3110 as amended; roll call recorded unanimous 'yes' votes among council members present (Councilors McClure, Mattis, Harris, Bencomo and Koran) and Mayor Enriquez; Councilor Muñoz was absent.
Ending: The ordinance as amended authorizes the city to proceed with the bond issuance and aligns reserve language with MFA policy; staff will continue to finalize sale timing and project allocations prior to closing.
