Albuquerque Public Schools will get about $600,000 over 30 years (an average of about $20,000 per year for three decades) for a $172 million project in Sandoval County that will provide electricity to the Meta data center in Valencia County – all because of the 382 students attending Corrales Elementary School.
That’s because of a new formula used to distribute Payment in the Lieu of Taxes (PILOT) to school districts will be applied to a solar plant to be built west of Rio Rancho.
“To say it’s convoluted would be an understatement,” Rob Burpo, Sandoval County’s financial advisor, said of the formula when he spoke to the Sandoval County Commission on Oct. 25. “It is very difficult to even factor. It takes quite a while to actually figure it out.”
The commission authorized the issuance of $275 million in Industrial Revenue Bonds to build the NMRD IV Project on 1,100 acres of land. Burpo said construction of the 140 megawatt solar array could start the first quarter of next year and take 18 months to build. He said the plant could supply power to the Meta data center in Los Lunas by June 2025.
Such projects have benefitted local school districts through PILOT distributions. But SB 474, sponsored by state Sen. Benny Shendo, D-Jemez, and signed into law by the governor, amended the Industrial Revenue Bond Act to change how payments were distributed to school districts.
As a result, the new formula provides for Albuquerque Public Schools, which only has 382 students attending Corrales Elementary School – its only school in Sandoval County – to receive about $108,000 more in PILOT payments than Bernalillo Public Schools, the district that serves the county seat.
Burpo called the amendment “terrible legislation” because the formula gives weight to the size of the school district, even if most all of the district is located in a neighboring county.
Commissioner Jay Block didn’t like it either. He didn’t like APS getting a slice of the money, nor that Meta was getting a better rate for power than the average citizen.
“Help me understand this,” he began, addressing Burpo. “You’re telling me that for 382 students, they get $600,000?” he asked.
Burpo reiterated that’s the number is determined by the formula in the new state statute.
Block also questioned Burpo about the rate Meta was paying PNM, noting that the corporation formerly known simply by one of its platforms, Facebook, would be paying a much lower rate for power than the residential customers.
“The big corporation of Meta is getting a sweet deal here on the power, and the normal everyday New Mexicans who are getting burdened by inflation and higher energy costs are going to be paying four or five times more. Is that correct? Does that sum it up?” he asked Burpo, who paused and said, “I’m not here to dispute your description.”
RRPS big winner
Prior to the legislation being signed into law, the distribution to the schools was shared equally among the five districts. Now, Burpo explained, school districts get 38% of the total PILOT distribution. Of that amount, 50% goes to the school district in which the project is located, which in this case is Rio Rancho. Forty percent is based on the land mass occupied by each school district within Sandoval County. And the remaining 10% is distributed based on the population within each school district, regardless of whether that population resides in the county or not.
Consequently, Rio Rancho Public Schools is set to receive $3.7 million over the life of the bond, an average of $123,000 annually over 30 years on an escalating scale. RRPS receives about $107,000 each of the first five years of the distribution, roughly $113,000 the next five years and so on, ultimately receiving payments of $137,000 annually the final five years of the bond.
Cuba Independent Schools gets $1.3 million over the life of the bond, while Jemez Valley schools get $812,000. Bernalillo schools receive just short of $500,000.
County gets more
The new formula calls for Sandoval County to receive 62% of the total PILOT distribution, which translates to $11.3 million, or an average of $377,000 in recurring revenue annually over the 30 years of the bond. Previously, Sandoval County was getting $100,000 in distributions annually.
“So, things worked out pretty well for us,” said Burpo.
After all the discussion over the intricacies of the formula and PILOT payouts, Commissioner Michael Meek made the decision to approve sound like a simple one.
“But the basic fact is that we’re going to be exchanging $3,000 a year for taxes times 30 years in exchange for a total of $11,259,000 to the county?” he asked.
Burpo confirmed that and Meek seemed satisfied. The commission unanimously approved issuing the bond, as well as an accompanying resolution.
After the vote, Block again expressed his distaste.
“I just want to reiterate I really am totally against Meta getting that sweet deal, but this is money for the schools and God knows our schools need help in New Mexico being dead last,” he said.