City nearing deadline on millions in spend-it-or-lose-it federal dollars

As the clock ticks down on federal Covid-19 relief money, Las Cruces officials said most of the money given to Las Cruces has been spent or allocated. 

The discussion took place at the city council’s work session at city hall on Sept. 9.

The federal government allocated $1.9 billion to aid local governments in pandemic relief efforts, primarily through the American Rescue Plan Act. The money comes with a timeline stipulation: It must be allocated by the end of 2024 and spent by the end of 2026, or the federal government will take it back. 

City and nonprofit officials who spoke about the funding's impact suggested to the council that all of the money would be spent by the deadline, something the council said was a priority.

Tracking efforts by the Brookings Metro and the National League of Cities show that most municipalities in the U.S. allocated the money to address homelessness, affordable housing, public safety, public health and infrastructure needs. 

However, the same tracker shows that the vast majority of municipalities used at least a portion of the money to replenish rainy day funds, provide staff with wage increases, upgrade facilities and technology or conduct other governmental operations. 

According to a presentation from the Las Cruces Finance department, Las Cruces received two payouts of $12.4 million for a total of over $24 million. 

Liam Beasley, a city accountant, said that as of June 30, Las Cruces had spent about 58 percent ($14.4 million). Another $10.3 million has been obligated, leaving about $4 million unobligated and unspent. 

“We’re constantly moving on this,” Leeanne Demouche, the city’s finance director, said, reporting that other departments would use the unobligated and unspent money. 

Beasley also broke down the spending by category. He said $2 million was allocated to public health and safety projects, much of which went to fire department training efforts and police technology.  

Another $1 million was allocated to Visit Las Cruces, the city’s tourism department, to bring people back to Las Cruces after Covid-19 shutdowns.

A Visit Las Cruces official cited the recovery of the lodger's tax to pre-pandemic levels as proof that the money had been well invested. 

Other investments included:

• $958,000 allocated to city employee pay
• $3.5 million to sewer and water projects such as septic tank elimination
• $6,888,670 allocated to various infrastructure improvements, such as covering funding gaps in general obligation bond projects
  
  

Several community organizations also received ARPA funds:

• Boys and Girls Club, which provides programs and services for young people, received $1,388,800.
• Catholic Charities of Southern New Mexico, which provides social, legal, and economic assistance to people in need, received $550,000.
• Community Action Agency, a nonprofit geared to assist low-income families, received $1.7 million.
• Cruces Creatives, a nonprofit “maker space” connecting residents with opportunities to create art, received $1 million.
• Jardin de Los Niños, which assists homeless children, received $350,000.
• LiftFund, which provides loans and microloans to small businesses, received $1 million.

Las Cruces Storefront Repair Program, Mesilla Valley Community of Hope, Mesilla Valley Public Housing Authority and the New Mexico Housing and Community Development Cooperation also received money. 

Beasley said most of the money sent to the community organizations had been spent or obligated, with the expectation of some workforce development programs.