Bernalillo County has agreed to reimburse the state Department of Transportation $7.1 million after its potential misuse of federal funds well over a decade ago.
The settlement pertains to property that the county bought in the mid-1990s as part of a project extending Paseo del Norte from Eubank to Tramway. The county purchased land expecting that eastern section of Paseo del Norte to have a freeway design that included overpasses at cross streets — elements later deemed unnecessary. Realizing it had more land than required, the county sold off 21 of the “excess” parcels for a total of $3.6 million, according to a settlement agreement the county commission approved Tuesday.
It then applied most of the revenue — $3.4 million — to a subsequent road project on Isleta Boulevard between Rio Bravo and Arenal that happened in the early 2000s.
But there were two problems:
- The county used federal money to buy the Paseo del Norte-related land that it later sold, meaning the $3.6 million in made from selling the properties is considered federal money, according to county documents.
- The county may have improperly characterized the $3.4 million it later applied to the federally funded Isleta project as its required local “matching” funds for the project. A county search for records proving it did not use the money that way has been unsuccessful.
The state DOT — which administered the federal funds for the Paseo del Norte project — identified the issues in 2012 and alerted the Federal Highway Administration. The FHWA required the state to “recoup the sum of the sales proceeds and the amount of the proceeds used by the county as federal matching funds” on Isleta, according to the settlement agreement.
The county has agreed to pay they money back in installments, making an initial $4 million payment in April and then $1.5 million installments in 2024 and 2025. The money will come from the county’s road fund.
Deputy County Manager for Public Works Elias Archuleta was not with the county when the land sales occurred and said most people from that era are now gone. He said that has made tracking down specifics somewhat difficult but that the county now has safeguards in place to avoid such errors. He cited the “real estate committee” that includes four deputy county managers, the county attorney and other advisory members with various backgrounds. The committee hears and vets proposals, whether that is county land dispositions or acquisitions.
“That’s what our big thing is, is ensuring ‘What do we do to make sure this (kind of thing) doesn’t happen?'” Archuleta said.