LOS LUNAS — The Village of Los Lunas is in a race against the clock to fund the proposed I-25 interchange and east-to-west corridor project.
If the village does not give a notice of bid award for the first phase by July 2024, it could lose out on $25 million awarded to the village through the federal Infrastructure for Rebuilding America grant.
Los Lunas Public Works Director Michael Jaramillo told the governing body the village is about $51 million short of fully funding the $141 million first phase of the project. The entire cost of the project is $220 million.
“I wanted to bring to your attention that we are moving forward and we do have some plans to go again to the Legislature this year with a different take and different push to get some of this money that is supposedly out there,” Jaramillo said during a January work session on the village’s five-year strategic plan.
The corridor project includes four miles of a four-lane highway — Los Lunas Boulevard — from N.M. 47 to I-25. It would include a new I-25 interchange, a new river crossing and four signalized intersections with the goal of alleviating congestion from Main Street in Los Lunas.
“We are hoping something happens this year,” Jaramillo said in regard to securing more funding. “If it does, that’s great. If it doesn’t, we can’t go backwards. If we go backwards, everything we have worked through to get to this point will have to restart and have a whole new cost. It’s just not worth it.”
Los Lunas Mayor Charles Griego also pointed to the INFRA grant as the reason why the project could not be postponed until more funding has been secured.
“(It) will cause us to lose our studies that we’ve done, our environmental studies will be dated, right of way will be spent, design will be dated also,” Griego said. “So, that’s one of the main reasons we need to get this program moving.”
Scaling back the project is also not an option due to restrictions placed on federal funds the village has already been awarded. Through requirements of the INFRA grant and the application submitted by the village three years ago, the first phase of the project is required to include the interchange, a new river bridge, and intersections, but with only one lane in each direction.
Jaramillo said costs on the overall project have increased due to inflation, with New Mexico Department of Transportation officials requiring the village to increase estimates on the project by 30% on two separate occasions.
While Jaramillo does not expect the first phase to actually cost the village $141 million, he is required to show funding available for the entire amount in order for NMDOT to consider the project fiscally constrained.
Another increase came when the village began to look into the cost of the new river bridge. Jaramillo said first estimates predicted the cost to be similar to the replacement of the river bridge on N.M. 6, however the Middle Rio Grande Conservancy District is requiring different criteria for this crossing.
Jaramillo said assumptions were made “because they already built and rebuilt (the) N.M. 6 bridge on Main Street and they did it for about $30 million.
“We were hoping the same structure design could be carried onto this project,” he said. “But the abutments (for) that bridge sit underneath, they said, ‘No, you can’t have them in the river; you have to put them on the outside.’ So it’s similar to what’s on I-25 in Isleta.”
Jaramillo estimates building a bridge with the abutments clearing not only the river but also the conservancy ditches on either side increases the bridge cost to about $55 million.
Potential funding sources
Jaramillo told the council his department has been exploring several options for funding through both the state and federal governments; however, match requirements are causing the village to still come up short.
“I have to meet the federal requirement for any federal funds received and, right now, (we’re) short about $9.5 million (in matching funds),” Jaramillo said, referring to money the village received through the state in 2021. “So, yes, I got $10 million, I can say it’s right there, but overall in the whole project, I’m $51 million short.”
The village has already applied for a federal Mega grant and will also apply for several other federal grants, such as the RAISE grant or the Build America Better grant.
Jaramillo pointed out that while the Mega grant has yet to be awarded, the New Mexico Department of Transportation has three separate applications also into that program.
“If there is one award to New Mexico and it goes to them, what they have been telling us is that it will help them free up some money to where they can move some of their money into our project,” Jaramillo said. “I don’t feel very comfortable with that.”
During the 2022 legislative session, the Los Lunas I-25 interchange project was one of the 12 projects that qualified for the $250 million in funding available through House Bill 2. Jaramillo said due to the way the bill was written, the village saw none of that funding despite expecting to receive about $20 million.
“The (department of transportation officials) basically said, ‘Mike, if you read the house bill language, it says may appropriate funds to these projects, so, we have the discretion to appropriate the funds where we see fit,'” Jaramillo said, adding that in year’s past, each project received a specific dollar amount of funding as outlined through the bill.
One of the largest prospects of funding that could also address the village’s concerns over matching federal funds is through American Rescue Plan funding, which is allocated through the state.
Jaramillo said he has been talking with a member of the governor’s office, who told him they are working to ensure the allocated ARPA funding can go toward a federal grant match, which will ease the financial burden on the village.
The village is also looking at applying for a State Infrastructure Bank loan, which allows governments to access low-cost financing for surface transportation projects. However, much like the problem with federal grants, the village doesn’t have the money to repay the loan.
“We are going in the right direction. We are in the right position…,” Jaramillo said. “I think that if we do this right, we could be successful with some additional funding.
“It doesn’t end here because I know we all want the full project, so we’ll be doing this for, as according to this, the next four years,” Jaramillo told the council as he gestured to the strategic plan outline for the village for the next five years.
Contingent on whether the village can secure the remaining $51 million to fund the $141 million first phase on the project, the village has its sights set on September 2024 to begin construction.
The village’s goal is to get the project financially constrained so it can move forward with submitting their 90% design to the New Mexico Department of Transportation for review.
Jaramillo said the project is essentially ready for the design review process, with the fiscal side of the project being the only holdout.
“Hopefully, we can work our way through it, but it’s not a guarantee,” the mayor said.