Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Jennings

ORIGINAL DATE

LAST UPDATED 08/16/08 HB

SHORT TITLE Lincoln and Otero County Flood Damage Repair

SB 2

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)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

Senate Bill 2 appropriates $ 5 million from the General Fund to the Department of

Transportation to plan, design and construct improvements to roads and bridges damaged by

severe flooding in Lincoln and Otero Counties.

FISCAL IMPLICATIONS

The appropriation of $5 million contained in this bill 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.

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)

Senate Bill 2 – Page

2

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 final approval of the federal aid in

the immediate future. 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.

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.

TECHNICAL ISSUES

The bill contains the following: This amount is in addition to, and is not intended to supplant,

any federal emergency management assistance funds provided by the federal government”. This

language is not exactly clear whether the appropriation is intended to be over and above any state

matching fund requirement for federal aid or if it is intended to be the state match.

In addition, it may be advisable to include language to allow budget increases at DHLSEM to

insure the matching arrangements are handled in the proper manner.

Possible Language

The department of homeland security and emergency management may request budget increases

up to five million dollars ($5,000,000) from internal service funds/interagency transfers and

other state funds from the department of transportation for road repairs in Lincoln and Otero

Counties.

MW/mt