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F I S C A L I M P A C T R E P O R T

SPONSOR T. Garcia

ORIGINAL DATE

LAST UPDATED

1/30/07

HB 432

SHORT TITLE

Village of Eagle Nest Professional Services

SB

ANALYST Propst

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$75.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

House Bill 432 appropriates $75,000 from the General Fund to the Local Government Division

of the Department of Finance and Administration in order to fund professional services contracts

for the Village of Eagle Nest.

FISCAL IMPLICATIONS

The appropriation of $75.0 contained in this bill is a recurring expense to the General Fund. Any

unexpended or unencumbered balance remaining at the end of FY08 shall revert to the General

Fund.

House Bill 432 – Page

2

SIGNIFICANT ISSUES

The Mayor of the Village of Eagle Nest provided the following breakdown for the professional

services contracts to be funded through HB 432:

Attorneys’ fees for election lawsuit judgment - $56,250

Attorneys fees for water rights work -

$18,750

Total expenditures in FY 2008 -

75,000

The Department of Finance and Administration reports that the election lawsuit attorney fees are

a result of a lawsuit filed by the loser of the March 2006 election for mayor. The plaintiff alleged

fraudulent voter intimidation and that precincts didn't conduct the election fairly. The 8th

Judicial District of New Mexico agreed with the plaintiff and ordered the Village of Eagle Nest

to pay her legal fees and court costs and to have a special election for mayor before April 4,

2007. The Village of Eagle Nest is seeking this money from the legislature “to cut through

bureaucracy and red tape," presumably a reference to the Village seeking a loan from the Board

of Finance. The advantage to the Village of this special appropriation is that the funds would not

have to be repaid, whereas a loan would have to be repaid.

The water rights work is presently almost complete except for the payment of the legal fees.

POSSIBLE QUESTIONS

DFA raised the following question:

1.

Did the Village appropriate funds for contract attorney fees for the water rights work

prior to the work beginning and, if so, why was that original budget insufficient to cover

the costs.

WEP/csd