Proposal: Cut NMFA Staff, Raid Cash

The New Mexico Finance Authority – which has helped finance billions of dollars of roads, schools and other public works projects around the state over the past two decades – would be eviscerated under a plan developed by a top official in the Martinez administration.

The 13-point plan calls for:

♦ Slicing the staff of the Finance Authority in half.

♦ Raiding the authority’s cash funds and transferring the money to the state general fund.

♦ Cutting off the supply of tax revenue to NMFA.

♦ Reissuing Finance Authority contracts for legal, financial and other services.

The plan is titled “Actions That Need To Be Taken with New Mexico Finance Authority” and was authored by Duffy Rodriguez, deputy secretary for budget and policy at the Department of Finance and Administration.

Rodriquez has more than 30 years’ experience in government and has played an influential role in the Republican administration. She also was a high-ranking appointee under Democratic Gov. Bill Richardson.

Supporters of the Finance Authority have leaked the plan in recent days in an attempt to show that the administration may use the auditing crisis at the authority to try to gut it, turning much of its work over to the private sector and politically favored government contractors.

The NMFA’s former controller, Greg Campbell, was arrested last week on charges related to the creation of a fake 2011 audit of the Finance Authority.

Campbell and John Duff, the authority’s chief operating officer, also are accused of conspiring to mislead investors about money transferred from NMFA to the state general fund to help ease a budget crunch. About $43 million was transferred over three years.

The Finance Authority has been forced to put off bond sales for school construction, and its credit ratings are under review as a result of the auditing scandal.

Scott Darnell, a spokesman for Gov. Susana Martinez, described the Rodriquez plan for NMFA as “a sheet of notes” that she put together a year or so ago and later shared with Martinez chief of staff Keith Gardner.

Darnell said in an e-mail:

“Those are potential changes that would need to be examined much further, and it seems that many of them would require significant legislative change (and, thus, legislative approval).

“They haven’t been analyzed or discussed in detail by our office, though there have been general discussions about concerns that the NMFA has grown beyond its core mission in recent years and (about) the importance of NMFA prioritizing the provision of loans and financing to smaller and rural communities where access to lending is much more scarce.”

Darnell said there also have been discussions about how the Finance Authority would fit into the administration’s initiative to overhaul how government plans and funds public works projects. Martinez wants a more needs-based system for project selection.

The authority is a quasi-governmental entity created in 1992. Its budget isn’t reviewed by the Legislature, and it isn’t subject to the supervision of any state agency, although gubernatorial appointees make up a majority of its governing board.

The NMFA manages more than a dozen loan and grant programs to fund public works projects and issues bonds on behalf of government agencies.

Its flagship program is the Public Project Revolving Fund. The Finance Authority issues bonds to provide money for the fund, then makes loans to state and local governments and agencies.

Loan payments and the authority’s share of the governmental gross receipts tax are pledged to pay off the bonds. The NMFA receives about $25 million a year from the tax.

The theory behind the creation of the Finance Authority was this: If governments and agencies combined their borrowing power, they would be able to obtain lower interest rates and pay less in financing fees, saving money for taxpayers.

Small governments and agencies, including those in rural areas, are said to benefit the most because they would have little borrowing power and face higher interest rates and financing fees on their own.

Rodriquez’s plan for the Finance Authority also called for personnel changes, including transferring Rick May from the job of Martinez’s secretary of finance and administration to chief executive officer of NMFA.

May was moved but was put on leave with pay as a result of the auditing mess.

UpFront is a daily front-page news and opinion column. Comment directly to Thom Cole at tcole@abqjournal.com or 505-992-6280 in Santa Fe. Go to www.abqjournal.com/letters/new to submit a letter to the editor.
— This article appeared on page A1 of the Albuquerque Journal