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F I S C A L I M P A C T R E P O R T
SPONSOR Jennings
ORIGINAL DATE
LAST UPDATED
8/16/08
8/19/08 HB
SHORT TITLE Flood Damage in Lincoln and Otero Counties
SB
29/aSCW/aHTRC/
HFA#1
ANALYST Weber
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY09
FY10
$5,000.0
Non-recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to HB16 and SB 2
SOURCES OF INFORMATION
LFC Files
SUMMARY
Synopsis of HFA#1
The House Floor Amendment makes the following changes to Senate Bill 29 as amended by the
House Taxation and Revenue Committee.
Strike House Taxation and Revenue Committee items 1 and 5. This deletes the $1 million
appropriation to Valencia County for infrastructure damage.
Synopsis of HTRC Amendment
The House Tax and Revenue Committee makes the following changes to Senate Bill 29 as
amended by the Senate Committee as a Whole:
1.
On page 1 line 12 add Valencia County
2.
On page 1, line 19 the appropriation is directed to the Department of Homeland Security
and Emergency Management rather than the Department of Transportation.
3.
On page 1, line 21 after “roads” strike “and” and insert in lieu thereof a comma.
4.
On page 1 line 21 add infrastructure to approved uses of the funds.
5.
On page 2 insert “one million ($1,000,000) is appropriated from the general fund to the
local government division of the department of finance and administration for
expenditure in fiscal years 2009 and 2010 for relief of severe flood and other storm
pg_0002
Senate Bill 29/aSCW/aHTRC/HFA#1 – Page
2
damage in the city of Belen in Valencia County. Any unexpended or unencumbered
balance remaining at the end of fiscal year 2010 shall revert to the general fund.
Synopsis of SCW Amendment
The Senate Committee as a Whole Amendment to Senate Bill 29. On page1, line 17 the
appropriation to the Department of Transportation is changed to $4.9 million from $5 million.
Synopsis of Original Bill
Senate Bill 29 appropriates monies for two purposes.
1.
Five million dollars is appropriated to the Department of Transportation to plan, design
and construct improvements to roads and bridges damaged by flooding in Lincoln and
Otero Counties.
2.
One hundred thousand is appropriated to the Department of Homeland Security and
Emergency Management for emergency relief for flood victims along the Rio Ruidoso as
provided in Section 12-11-25.
FISCAL IMPLICATIONS
The appropriation of $5 million contained in this bill to DOT is a Non-recurring expense to the
General fund. Any unexpended or unencumbered balance remaining at the end of FY2013 shall
revert to the General Fund.
The appropriation of $100 thousand contained in this bill to DHLSEM is a Non-recurring
expense to the General fund. Any unexpended or unencumbered balance remaining at the end of
FY2010 shall revert to the General Fund.
SIGNIFICANT ISSUES
Severe rains July 26 and 27 spawned by the remnants of Hurricane Dolly led to damaging and
dangerous flooding in Lincoln and Otero Counties. On July 28 Governor Richardson issued
Executive Order 2008-042 declaring a disaster in Lincoln County thereby releasing $750
thousand to the Department of Homeland Security and Emergency Management (DHLSEM) to
help defray local costs associated with the disaster.
After the initial emergency and rescue operations by DHLSEM and the National Guard,
assessment teams from both the state and the Federal Emergency Management Agency (FEMA)
began estimating infrastructure damage and costs to rehabilitate the area. Information gathered
by the teams pointed to damage being extensive enough to meet federal thresholds to qualify for
FEMA funding. Presently DHLSEM information estimates a swift final approval of the federal
aid for this purpose. Federal aid allows for a state-federal matching arrangement of 25 percent
state to 75 percent federal. The state funds can be a combination of state and local monies.
Worksheets provided by DHLSEM estimate the total required expenditures at approximately
$5.1 million. This total includes include $2.9 million for Lincoln County and $47 thousand for
Otero County for roads and bridges. DHLSEM cautions however that this should NOT be
construed as the final total costs but is rather a rough projection to determine if federal thresholds
for FEMA aid were met. Until requests for proposals are issued and bids received the actual
costs are somewhat uncertain and difficult to estimate.
pg_0003
Senate Bill 29/aSCW/aHTRC/HFA#1 – Page
3
Once all the funding is in place the federal funds are handled on a reimbursement basis with
generally local authorities taking the lead for plan design and construction management. For this
reason it may be advisable to direct the appropriation to Local Government Division of the
Department of Finance and Administration. This division has direct contact and arrangements
on how to coordinate local community capital projects which this type of infrastructure repair
appears to be.
The $100 thousand appropriation to DHLSEM indicates the expenditure should be for
emergency relief for flood victims along the Rio Ruidoso as provided in Section 12-11-25
NMSA 1978. The section states “The funds shall be expended by the governor or any agent or
agency designated by him for those purposes, either as a state project or for securing matching
federal funds”. Further along "state project" is defined as “an expenditure by a state agency to
provide those resources and services necessary to avoid or minimize economic or physical harm
until a situation becomes stabilized and again under local self-support and control. State project"
may include any expenditure on a temporary, emergency basis for lodging, sheltering, health
care, food, any transportation or shipping necessary to protect lives or public property; or for any
other action necessary to protect the public health, safety and welfare”. This could be construed
to mean the funds are to repay governmental entities such as the National Guard or State Police
for their services in the emergency phase.
TECHNICAL ISSUES
It may be advisable to include language that clarifies how the $5 million relates to the state
matching requirement for FEMA federal funds. It is unclear if these funds are just an
appropriation for roads and bridges in Lincoln and Otero or if some or all of the $5 million
should act as the state matching requirement. If this is not clear and the funds are not spent in
the proper chronology it could result in not having state matching funds available at the required
time with the resultant loss of the 75 percent federal portion. For example, language could
provide that the primary purpose of the $5 million is to act as match and any non-matched funds
could only be expended after the depletion of FEMA funds.
MW/mt:svb