(A) The funds collected pursuant to §§ 14-19-1 et seq. shall be used solely for the purpose of planning, design, land acquisition, construction, expansion and development of system improvements for the service area from which the impact fees were collected.
(1) Eligible costs include, but are not limited to, the costs of system capacity and/or system impact studies, planning, design and construction, land acquisition, land improvement, design and engineering related thereto, including the cost of constructing or reconstructing system improvements including, but not limited to, the construction contract price, surveying and engineering fees, and related land acquisition costs.
(2) Impact fees shall not be used for routine and periodic maintenance expenditures, personnel training and other operating costs.
(3) Road impact fees collected on or after the effective date of this article shall not be expended for right-of-way acquisition or collector road improvements. The costs of these components have not been included in the updated road impact fees, and credit will no longer be provided to developers who make right-of-way dedications or improve collector roads.
(4) Trail impact fees collected on or after the effective date of this article shall not be expended for right-of-way acquisition. The cost of right-of-way has not been included in the updated trail impact fees, and credit will no longer be provided to developers who make right-of-way dedications for trails.
(B) Notwithstanding the above, impact fees may also be spent on:
(1) Fees paid to independent qualified professionals who are not employees of the city for preparing and updating the land use assumptions, impact fee capital improvements plan and impact fee study;
(2) Costs and fees charged by qualified professionals who are not employees of the city for services directly related to the construction of capital improvements; and
(3) Administrative costs associated with §§ 14-19-1 et seq. for city employees who are qualified professionals. Such administrative costs shall not exceed 3% of the total impact fees collected, as provided by Section 5-8-4 NMSA 1978. The city shall be entitled to expend up to 3% of the impact fees collected annually to offset the permissible administrative costs associated with the collection and use of such funds.
(C) The city may issue bonds, revenue certificates and other obligations of indebtedness in such manner and subject to such limitations as may be provided by law in furtherance of the provision of capital improvement projects. Funds pledged toward retirement of bonds, revenue certificates or other obligations of indebtedness for such projects may include impact fees and other city revenues as may be allocated by the City Council. The impact fees paid pursuant to §§ 14-19-1 et seq., however, shall be restricted to use solely and exclusively for financing directly, or as a pledge against bonds, revenue certificates and other obligations of indebtedness for the cost of capital improvements as specified in this section.