Loan could help fund civic center remodel
FARMINGTON — The City Council approved a motion to submit an application to the New Mexico Finance Authority for two loans totaling $18 million today.
The loans will fund an energy conservation and efficiency project, and the remodel of the Farmington Civic Center. The city is submitting the two projects to the New Mexico Finance Authority to be packaged with other projects statewide and sold as bonds. The New Mexico Finance Authority will sell the bonds in November.
The city is asking for about $5.5 million from the New Mexico Finance Authority for the energy conservation and efficiency project, which includes a retrofit of City Hall. It is also asking for $12.5 million for the civic center remodel.
"We're kicking off the financial process for two major projects," City Manager Rob Mayes told councilors during the meeting today.
Mayes told councilors the money for the civic center remodel will be repaid using revenue from fees charged to use the civic center. He said the civic center makes more than $800,000 in revenue each year, and the city will have $710,000 in payments on the loan. The city will have 25 years to repay the loan for the civic center, and 15 years to pay the loan for the energy conservation and efficiency project.
Mayes said architects will present the next phase of designs for the civic center remodel during the next City Council work session, which is scheduled for September.
In other business, the city also approved refinancing two revenue bonds for Public Service Company of New Mexico. The two pollution-control revenue refunding bonds total about $146 million.
PNM officials first approached councilors during their Aug. 9 meeting about the possibility of refinancing the two bonds that were first issued in 2003 and set to mature in 2033.
During the Aug. 9 meeting, Michael Rico, the assistant treasurer for PNM Resources Inc., cited low interest rates of 4.875 percent as one reason to refinance the bonds. He said the refinancing could save between $1.5 million and $3.5 million each year in interest payments, and told councilors that the company would use the proceeds from the refinancing to repay old bonds, according to council minutes.
Because the city is issuing the funds, the company will not have to pay gross receipts and property taxes.The tax-exempt bonds will help PNM finance pollution-control equipment for the San Juan Generating Station and the Four Corners Power Plant. While the city will issue the bonds, it will not be acquiring additional debt, according to City Attorney Jennifer Breakell.
After the meeting Tuesday, Rico said the bonds will help the company receive lower financing rates and could help the company keep rates lower for customers.
Hannah Grover covers Aztec and Bloomfield, as well as general news, for The Daily Times. She can be reached at 505-564-4652.