Colonias Infrastructure Grant

On September 10, 2025, the Truth or Consequences City Commission unanimously approved Resolution No. 10 25/26, authorizing the execution and delivery of a Colonias Infrastructure Project Fund Loan/Grant Agreement with the New Mexico Finance Authority (NMFA). This marks a significant step forward in the City's long-term efforts to modernize and improve its wastewater collection system.

Project Overview
The approved funding, $191,000 total, will support the development of a Preliminary Engineering Report (PER) for the City's wastewater collection system. The funding structure includes:

$171,900 grant (90%)
$19,100 loan (10%), repayable over 12 years at a net effective interest rate of 0.25%

The PER will assess the condition of the existing infrastructure, identify system deficiencies, and propose prioritized improvements. It will also include a hydraulic model developed using flow monitoring, GIS data, and field verification. This model will be integrated into the City's GIS system, similar to the municipal water system.

Why It Matters
The wastewater collection system in Truth or Consequences includes:

61 miles of sewer main lines
644 manholes
Four sewer sheds with pump stations
Three conveyance types: gravity, vacuum, and force main

Many components date back to the 1970s. According to the City's Wastewater Asset Management Plan:

12% of components are in poor condition
37% of collection lines are made of vitrified clay, a rigid material prone to damage
Over 41,000 feet of sewer main are rated poor to very poor
More than 50% of manholes require rehabilitation

The PER is a prerequisite for applying for future design and construction funding from agencies such as USDA, NMFA Water Trust Board, and Colonias Infrastructure Board.

Timeline and Coordination
Assistant City Manager Traci Alvarez explained that the PER process could take 9 to 18 months. The project has already appeared before the Commission multiple times—in February, April, July, and now September, with a Budget Adjustment Request (BAR) expected at the next meeting.

Commissioner Merry Jo Fahl emphasized the importance of reminding the public that infrastructure projects are complex and unfold over time, often requiring multiple phases before visible progress is made. Commissioner Ingo Hoeppner raised a practical concern about coordinating water and sewer upgrades to avoid redundant street cuts. In response, Traci Alvarez noted that while funding sources for these utilities typically do not overlap, city staff will review project timelines to identify opportunities for improved coordination. City Manager Gary Whitehead added that while aligning infrastructure work is ideal, it’s not always feasible due to funding limitations and the varying conditions of existing systems.

Fiscal and Legal Framework
The loan portion of the funding will be repaid using revenues from the Municipal Infrastructure Gross Receipts Tax, specifically the 0.125% increment established by Ordinance No. 389 (1992) and amended by Ordinance No. 472 (2000). This tax has been de-earmarked and is enforceable under NMSA 1978, § 7-19D-9.

The City has already satisfied key requirements for the funding, including:

Approval of Resolution 32 24/25 (February 26, 2025) to submit the application
Acceptance of the award via Resolution 04 25/26 (July 9, 2025)
Submission of readiness-to-proceed documentation to NMFA

Looking Ahead
Mayor Rolf Hechler noted that the PER will position the City for future grants and provide an end-to-end engineering report. Once completed, the report will guide the City in applying for construction funding and implementing system-wide upgrades.

Published October 7, 2025