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Council reallocates $1.3M in ARPA funds from Casa Linda to finish Cortez Drive work while contractor issues resolve
Summary
After a terminated contract left Casa Linda Acres with $1.3 million unspent, the council approved reallocation of those ARPA funds to the Cortez Drive improvements to avoid returning federal funds; public works said the terminated contractor’s bonding company must respond by July 10 and that funds used on Cortez will be re-applied to Casa Linda later.
The Las Cruces City Council approved a resolution to reallocate $1.3 million in unspent American Rescue Plan Act (ARPA) funds originally budgeted for the Casa Linda Acres reconstruction project to the Cortez Drive Improvements project.
William Beasley, accounting manager, explained that the Casa Linda construction contract (executed October 2024) was terminated before completion in April 2026 after $902,000 of ARPA funds had already been spent, leaving roughly $1.3 million unspent. Because ARPA funds must be obligated and spent by federal deadlines, staff proposed moving the unspent Casa Linda allocation to Cortez Drive — a project that meets ARPA eligibility — so the city can obligate and spend the funds before the December 31, 2026 deadline.
Beasley said the reallocation approach reimburses the original Cortez Drive accounts with ARPA funds and would make the non‑ARPA funds previously used on Cortez available to return to finishing Casa Linda when contractor issues are resolved.
Kyle Orange, interim public works director, told council the contractor on the Casa Linda project had been terminated and that the city is awaiting a response from the contractor’s bonding company, due July 10, about how the project will be completed. “We’re in a low period right now where we’re waiting to see what the contractor’s bonding company is going to do for us with regards to their obligations to finish that project,” Orange said.
Councilor Bencomo said she had received many constituent complaints about Casa Linda and expressed concern that reallocating funds would delay improvements in District 4. Orange and Beasley said the swap of accounting sources is intended to preserve ARPA eligibility while giving the city time to resolve contractor completion via bonding or rebid.
The council approved resolution 27‑008. Roll call recorded unanimous 'yes' votes by present councilors; Councilor Matisse was listed as absent.
Why it matters: reallocation preserves ARPA funding for local infrastructure while the Casa Linda project is put on hold pending bonding‑company action; District 4 constituents may see project timelines shift until completion details are resolved.
Next steps: staff said they will report back with details on contractor bonding‑company responses and any follow-up finance actions to transfer non‑ARPA funds back to Casa Linda as work resumes.
