New Mexico justices reject move to void county's ICE contract for bond-funded facility

Bloomberg News

The New Mexico Supreme Court denied a petition from the state attorney general to invalidate a contract between Otero County and U.S. Immigration and Customs Enforcement (ICE) that generates revenue to pay off unrated bonds issued for a facility used to process individuals accused of civil immigration violations.

The high court's decision on Thursday — rejecting a writ of mandamus and stay — protects $14.33 million of outstanding Series 2007 jail project revenue bonds that depend on an intergovernmental service agreement with ICE, according to a statement from the county. 

"A forced termination of the federal contract would have placed the county in immediate default on those obligations, threatening the financial stability of the county and the county's standing with bond markets," it added.

Attorney General Raúl Torrez's office did not immediately respond to a request for comment. 

Torrez filed the petition earlier this month, contending Otero County did not obtain required approval from the state's Department of Finance and Administration and was apparently attempting to evade the prohibition of agreements involving the detention of individuals for federal civil immigration violations under the Immigrant Safety Act, which Gov. Michelle Lujan Grisham signed into law in February.

With the law not taking effect until May 20, Otero County commissioners on March 25 reapproved a five-year, $283 million ICE agreement after the state's justice department determined March 13 commission action on the contract was invalid due to a state Open Meetings Act violation. The move to replace a prior ICE agreement that expired on March 15 was aimed at avoiding a default on a nearly $5.26 million debt service payment due April 1.

On March 31, S&P Global Ratings revised its outlook on the county's A-minus underlying gross tax receipts revenue bond rating to negative from stable, citing large general fund deficits that could be exacerbated by the loss of the ICE contract.