Northern NM officials may wait months for federal approval before getting state disaster loans

To cover how long it takes federal disaster funds to come through, the state decided a month and a half ago to send $100 million in emergency loans to political agencies and public acequias struggling to recover from New Mexico’s largest fire ever and other natural disasters that followed.

While officials are still waiting for that help to arrive, a Mora County official says melting snow is creating flooding threats again in and around the burn scar.

Gov. Michelle Lujan Grisham signed Senate Bill 6 on Feb. 20, just past the halfway mark of the recent 60-day legislative session that ended in March. The bill makes $100 million in state funds available for political subdivisions to borrow to repair public infrastructure damaged by the Hermits Peak-Calf Canyon Fire and following disasters.

The state’s loan program depends on billions in federal dollars Congress approved after the U.S. Forest Service took responsibility for starting the fires that damaged northern New Mexico communities.

It can be a lengthy process to actually get those dollars to northern New Mexico. The loans from the state were meant to serve as a quicker recovery route in the meantime.

Wayne Propst, New Mexico Department of Finance and Administration cabinet secretary, is heading the agency in charge of getting approved state loans from the Hermits Peak-Calf Canyon Fire Recovery Funds to local officials and people.

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On March 30, weeks after the governor signed the bill to spend the emergency funds on the burn scar, Propst met with disaster victims to explain the loan process.

“We know that you have been waiting patiently for this to happen,” he said.

Members of the Department of Homeland Security and Emergency Management and other finance agency officials also joined Probst at the virtual meeting last week. 

Carmen Morin is the bureau chief of DFA’s Community Development Bureau. She said political subdivisions have to fill out a Google form to apply, sending things like disaster, tax and contact information over to the state.

At least six different public agencies, she said, are eligible to get the state loans: Mora County, San Miguel County, the City of Las Vegas, New Mexico Highlands University, the Agua Pura Mutual Domestic Consumers Water Association, La Acequia del Canoncio and La Acequia del Cañoncito de La Cueva. 

For some of those applicants, it’s a race against the warming weather to get work done before floods come through the vulnerable region again.

That’s already started happening in Mora County.

Mora County Commissioner Veronica Serna said roads and private property have already flooded from snow runoff. People are asking for sandbags again, she said.

“Time is against us,” she said.

She said Mora County is waiting for FEMA to authorize projects regarding repairs on 29 broken-up roads before being able to apply for the state loans. Serna said it might add up to around $50 million in costs but it’s hard to tell exactly how much at this point.

Those projects alone could take up half of the money approved by Lujan Grisham.

Serna said FEMA has been reviewing the county projects for about two or three months. Even with the state’s help, she said, it’s a long process because of all the bureaucracy.

But it’s a race against the sun shedding snow off the charred mountainsides now. Water can slide easily off the burn scar, leading to floods, as has already been happening.

“It hasn’t been as extensive as it was during the monsoon, but it’s already started as a result of the snowmelt,” Serna said. “As the weather warms, we’re going to continue seeing more.”

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The state loans could include mitigation measures, ensuring that local roads are better equipped to direct water flow to avoid catastrophic flooding, she said.

Other political subdivisions can apply for the state loans under the new law, too, as long as it’s before March 31, 2024. To be eligible to apply, political subdivisions must be approved for FEMA’s Public Assistance Program.

While it remains unclear how many local repair projects will be funded, the law does specify that $250,000 will be set aside for administrative costs. The rest of the $99,750,000 will be available as zero-interest loans for local governments and political agencies to be reimbursed for public infrastructure work, like road or acequia fix-ups, following the fire, floods or debris flows.

Any political subdivisions getting the funds must enter a loan agreement with the state before receiving any payments.

Patrick Schaffer, attorney with state finance authority, said at the meeting that the loan agreement lays out terms local officials must follow, including that the political subdivisions have to repay the state within 30 days of getting the requested FEMA funds, only use the money for specified public infrastructure repairs and update the state every few months on the projects.

If any of the political subdivisions break these clauses, they’ll have to pay more back to the state. The loans would no longer be zero interest, and the current market interest rate would be added to the loans.

Schaffer said the loan agreement should be very easy to navigate and understand.

“The loan agreement is basically a page and a half. And that includes the space for signatures and those kinds of things,” he said. “So it’s very, very straightforward. It’s probably the shortest, most straightforward agreement I’ve ever seen.”

Repairs done using the loan money have to be finished by November 2024. Entities can ask the state department of homeland security for extensions, if needed, or to change what work is being done with that money.

All loan repayments will go back into the state’s General Fund.

The state will hold in-person workshops next week in Mora County and Las Vegas, N.M. to help out with the application process.