Officials explain GO‑bond handling and limited arbitrage; some proceeds held at NMFA

Councilors pressed staff about apparent interest earnings on certain GO bonds and the village’s practice for holding proceeds.

Administrator Romero explained that some bond proceeds sit with the New Mexico Finance Authority (NMFA) while proceeds from a 2024 GO bond sold on the open market were placed in the village’s bank account. “This money is sitting at NMFA,” Romero said when describing how activity statements are reported; she added that the 2024 bond used Bank of Oklahoma as the paying agent after an open‑market sale.

Councilors discussed arbitrage limits — earning interest above what bond covenants allow — and the mechanics of drawdowns and reimbursements when projects request funds. Staff said the village draws down against paid invoices and receives reimbursement, which can produce small amounts of interest before final payouts; staff also noted regulatory limits on arbitrage to avoid qualifying issues.

Council members asked whether the village could manage short timing windows to earn more interest, and staff responded that many bond and grant rules (and the need to match invoices to drawdowns) limit such opportunities.