Minutes of the Regular Meeting of NMSBIC, April 18, 2025

A meeting of the New Mexico Small Business Investment Corporation was called to order on this date at 9:00 a.m. at DreamSpring, 2000 Zearing Ave. NW, Albuquerque, NM 87104. A quorum was established.

Members Present:
Mr. Joshua Smith, Chair
Mr. Robert Valdiviez, Secretary/Treasurer (via Zoom)
Ms. Kristina Alley
Mr. Joshua Grassham

Members Excused:
Ms. Anne Beckett, Vice Chair
Hon. Laura M. Montoya, NM State Treasurer
Ms. Sayuri Yamada

Executive Director/Financial Adviser to Board: Mr. Russell Cummins

Board Legal Counsel: Not present

Guests Present:
Anne Haines, DreamSpring, President & CEO
Jake Dopson, Pulakos CPAs, Assurance Partner/Shareholder
Jay Harrison, Clearinghouse CDFI, Chief Investment Officer
Brian Svendahl, RBC Global Asset Management, Senior Portfolio Manager
Chris Boppre, RBC Global Asset Management, Client Portfolio Manager
Angela Merkert, Alliance for Economic Prosperity, Executive Director

REVIEW AND ACCEPTANCE OF AGENDA

Mr. Grassham moved to accept the agenda, as published. Ms. Alley seconded the motion, which passed unanimously by roll call vote.

DREAMSPRING WELCOME AND TOUR

Mr. Cummins introduced Anne Haines and expressed his appreciation to her for hosting today’s NMSBIC board meeting at DreamSpring. Ms. Haines welcomed everyone and said it is a joy to have the NMSBIC board meeting at DreamSpring. She said the room was intended to be a community space, and having partners hold gatherings here is very meaningful for her. DreamSpring was established in 1994 in Albuquerque and has been supporting historically under-resourced entrepreneurs for over 31 years by providing financial and social capital. It initially offered loans locally but expanded to rural areas and beyond, eventually operating in 27 states. Notable programs include aiding creative entrepreneurs and acting as a lender during crises like the Great Recession and the pandemic. Collaborations with partners like the NMSBIC have been pivotal. NMSBIC’s financial and strategic support has enabled DreamSpring to empower small businesses and communities, particularly during challenging times, fostering economic growth and resilience.

Mr. Grassham asked if there had been any cutbacks in DreamSpring’s federal funding. Ms. Haines responded that DreamSpring has intermittently received federal funding, primarily through the U.S. Department of Treasury’s Community Development Financial Institutions (CDFI) Fund, totaling about $20 million over 25 years. While DreamSpring is not dependent on federal funding, it acknowledges the potential impact of changes to the CDFI Fund, especially following a recent executive order aimed at reducing redundancy in federal programs. The CDFI Fund has historically enjoyed bipartisan support due to its role in fostering small business growth. DreamSpring remains focused on managing risks and ensuring access to capital, while closely monitoring potential shifts in federal funding policies.

Ms. Haines noted that DreamSpring designed its headquarters building collaboratively with an architectural firm, involving clients, stakeholders, donors, staff, and board members to reflect New Mexico’s vibrancy and history, blending professionalism with a sense of home. Funding came from a mix of sources, including a grant from the U.S. Department of Commerce Economic Development Agency and a significant donation from Joe Jacobs, a benefactor who earmarked funds for assets such as DreamSpring’s building. The project also received substantial private sector support from entities like Wells Fargo, along with other banks and individual donors. This collective effort helped turn the vision into reality, creating a space that honors its community and mission. Ms. Haines then led a tour of DreamSpring’s facility, after which the group returned to the meeting room.

PUBLIC ATTENDENCE

Mr. Cummins welcomed Angela Merkert who joined the meeting via Zoom. He asked Ms. Merkert if she would like to address the NMSBIC board. Mr. Merkert said she is the Executive Director of the Alliance for Local Economic Prosperity and expressed her interest in learning more about the workings of the NMSBIC. Her organization advocates for a state public bank as a mechanism to enhance investment of New Mexico’s revenue, particularly in small business development. She said she appreciated the opportunity to observe and hear more about the NMSBIC’s activities and being able to join the meeting via Zoom.

NMSBIC PROPOSED BOARD RESOLUTION HONORING F. LEROY PACHECO

Mr. Cummins said he was sad to report that Leroy Pacheco, President & CEO of the New Mexico Community Development Loan Fund (“The Loan Fund”) passed away on March 27, 2025. The Loan Fund has been an NMSBIC lending partner since 2003. Mr. Pacheco joined The Loan Fund in 2007 as President & CEO and was responsible for expansion of The Loan Fund’s reach and assistance to small businesses throughout the state. Mr. Cummins referred to Mr. Pacheco’s obituary which was provided in the board package, including information about services for Mr. Pacheco.

Ms. Alley moved the NMSBIC board of directors to approve the following resolution:

NMSBIC Board Resolution

WHEREAS, F. Leroy Pacheco, President and CEO of the New Mexico Community Development Loan Fund (The Loan Fund), dedicated his life to fostering economic growth and empowering individuals and communities; and

WHEREAS Mr. Pacheco’s leadership and vision made The Loan Fund a place of hope for small business owners seeking financial support and guidance; and

WHEREAS his unwavering commitment to helping underserved individuals succeed and grow generational wealth has left an indelible mark on people and communities throughout New Mexico; and

WHEREAS Mr. Pacheco passed away on March 27, 2025, leaving behind a legacy of compassion, innovation, and dedication to the betterment of our State;

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors of the New Mexico Small Business Investment Corporation hereby honors the life and contributions of F. Leroy Pacheco, recognizing his profound impact on the community and his leadership at The Loan Fund.

Mr. Grassham seconded the motion, which passed unanimously by roll call vote.

Mr. Cummins noted that, in accordance with the family’s wishes, $110 had been provided on behalf of NMSBIC to plant ten trees in a forest of need.

BOARD MINUTES FOR FEBRUARY 21, 2025

Mr. Grassham moved to approve of the Board Minutes for February 21, 2025, as presented. Ms. Alley seconded the motion, which passed unanimously by roll call vote.

PULAKOS CPAS, PROPOSED ENGAGEMENT LETTER FOR INDEPENDENT AUDIT AND TAX RETURN PREPARATION

Mr. Cummins said that Pulakos CPAs has been conducting NMSBIC’s external audit for several years. He noted that NMSBIC is not a State Agency and does not have a requirement to rotate audit firms. He added that the American Institute of Public Accountants (the “AICPA”) does not recommend required rotation of audit firms. Mr. Cummins said service provided by Pulakos CPAs has been excellent.

Mr. Dopson outlined the audit process, emphasizing their commitment to ensuring quality through internal rotation within the team and fresh monitoring perspectives. He said the NMSBIC’s audit involves submitting reports within 90 days of the fiscal year-end. Their team typically begins the process in early August, breaking the work into two phases. They finalize and report results by late September once all required data from equity partners and lending partners is received. Transparency is ensured by submitting audit results directly to government entities.

Mr. Cummins said that from the time all information is received from NMSBIC’s partners at the end of August, Mr. Dopson and his team are able to complete the audit and issue the report within 30 days, which is impressive.

Mr. Valdiviez made a motion for:

• The NMSBIC board of directors to approve the Pulakos CPAs 2025 Audit and Tax Engagement Letter at a cost of $30,750 for audit services, and $4,325 for tax preparation services, plus New Mexico Gross Receipts Tax, and
• Robert Valdiviez, NMSBIC Secretary/Treasurer, be authorized to sign the Pulakos CPAs 2025 Audit and Tax Engagement Letter.
• The NMSBIC Executive Director/Investment Adviser report back to the board after the document has been executed.

Ms. Alley seconded the motion, which passed unanimously by roll call vote.

NMSBIC PURPOSE FROM THE SMALL BUSINESS INVESTMENT ACT

Mr. Cummins said this information is provided for reference in the board package.

FINANCIAL REPORTS AS OF FEBRUARY 28, 2025, AND MARCH 31, 2025

Mr. Cummins said the financial reports as of March 31, 2025, were not ready when the board package was prepared and are included in a supplement to the board package that has been provided to board members. He provided the following summary of the March 31, 2025, financial results:

• The Local Government Investment Pool (“LGIP”) balance was $48 million and includes the $28 million contribution from the Severance Tax Permanent Fund received in February 2025.
• Total loans outstanding have increased to $105 million.
• Total assets are over $184 million.
• The change in net assets was $493,000 in March, and $31.4 million for the fiscal year-to-date. If we subtract the contribution from the Severance Tax Permanent Fund, the year-to-date change in net assets was $3.1 million.
• Funds available for investment were $28 million, which is the amount recently received from the Severance Tax Permanent Fund. Mr. Cummins noted there is a request on the agenda for today’s meeting for a $10 million increase in funding from Clearinghouse CDFI.

Mr. Grassham moved to accept the financial reports as of February 28, 2025, and March 31, 2025, as presented. Ms. Alley seconded the motion, which passed unanimously by roll call vote.

BUREAU OF BUSINESS AND ECONOMIC RESEARCH IMPACT STUDY – UPDATE

Mr. Cummins said the legal agreements between NMSBIC, and the Bureau of Business and Economic Research (BBER), are in process. He said when BBER completed the NMSBIC’s economic impact study in 2017, BBER entered into non-disclosure agreements (NDAs) with each of NMSBIC’s lending partners. He noted the NMSBIC has more lending partners now than it did in 2017. For the current study, BBER recommended a single NDA with the NMSBIC, and for NMSBIC to collect data from lending partners and pass-through the data to BBER. Mr. Cummins reviewed the request with Randy McDonald and Chair Smith, and we are moving forward with executing a single NDA between NMSBIC and BBER.

Mr. Cummins has had discussions with Julian Baca at BBER, and Brendon Gray at the Legislative Finance Committee (LFC), about a possible collaboration between BBER and LFC on the current BBER study. Mr. Baca noted that LFC staff might provide information and insight about the costs and impact of other New Mexico economic development programs, which might be useful in providing a comparison of the NMSBIC’s results to other state programs. Mr. Baca and Mr. Gray both expressed interest in a collaboration, and Mr. Cummins said he plans to pursue this.

EXECUTIVE DIRECTOR/INVESTMENT ADVISOR REPORT

Mr. Cummins said NMSBIC had $151 million in total commitments, with $109 million outstanding, including $2.8 million in equity program investments. He provided the following updates:

Lending Partners:

• DreamSpring Leadership Changes: Anne Hayes is retiring after 31 years at DreamSpring; an interim CEO appointed and a search for a permanent replacement is underway.
• LiftFund Update: The maximum funding amount was reduced from $3 million to $1 million in 2021, and maturity was extended to November 2026. LiftFund has experienced turnover in executive management. Mr. Cummins is working to establish contact with new management and inquire about LiftFund’s plans to utilize NMSBIC funds.
• The Loan Fund: Conchie Searle, CFO, was named interim president after Leroy Pacheco’s passing. There is a separate agenda item with a recommendation to extend the waiver of liabilities/net assets for two months.
• New Mexico Mortgage Finance Authority: MFA plans to deploy full $3.5 million in NMSBIC funding. There have been delays in a low-income housing tax credit (LIHTC) multifamily project and a single-family infrastructure development.
• RBC GAM: There is a separate agenda item, with a presentation by Chris Boppre and Brian Svendahl in today’s meeting.
• West Lending Expansion: Mr. Cummins is having follow-up discussions with Sandro Tonini on potential partnership opportunities.

Equity Partners:

• New Mexico Mezzanine Partners: For outstanding investments in two companies, both companies are experiencing challenges; recording an impairment adjustment is being considered.
• Verge Partnership: The partnership will end December 31, 2025. Plans are to distribute stock shares to limited partners.
• Mr. Cummins is continuing communications with lending partners regarding potential impacts related to changes in the new U.S. administration.
• New Mexico Impact Investing Collaborative: NMIIC is exploring foundation investments in CDFIs, including possible equity equivalent (EQ2) investments.

Potential New Partners:

• Native Partnership for Housing: We are awaiting the 2023 audit.>/li>
• Raza Development Fund Partnership: Chair Smith and Mr. Cummins met with Adrian Ruiz in late 2024. A discussion term sheet was provided, with a focus on potential partnerships in rural medical facility development. Feedback to NMSIBC from the Investment and Pensions Oversight Committee highlighted the need for more rural medical facilities.
• Native Community Capital (NCC): An introduction was facilitated by Sayuri Yamada to NCC, which focuses primarily on residential loans. NCC may consider expanding small business lending but would need additional resources.
• New Mexico Angels: Mr. Cummins has met with Drew Tulchin and David Perez and discussed a possible new Community Development Financial Institution to support startup companies.

CLEARINGHOUSE CDFI, PROPOSED CHANGES TO NMSBIC LINE OF CREDIT

Mr. Cummins welcomed Jay Harrison, Chief Investment Officer for Clearinghouse CDFI (CCDFI). Mr. Cummins said CCDFI has requested a $10 million increase in its NMSBIC line of credit, from $20 million to $30 million. He added that CCDFI has a good track record of deploying NMSBIC funds and providing small business loans in New Mexico.

Mr. Harrison said CCDFI has maxed out its current $20 million line of credit with NMSBIC. He said he anticipates deploying an additional $5 million easily, and the full $10 million likely to be deployed within the next year. Mr. Harrison said there is a $4.5 million construction loan in Gallup that is in process and could be funded with NMSBIC funds.

Mr. Harrison said current loans pledged to NMSC include hotels, daycare centers, charter schools, nonprofit offices, and mixed-use developments across Albuquerque, Las Cruces, Santa Fe, and Los Lunas, with an average loan balance of approximately $3.5 million. CCDFI has a solid financial position with total assets of $751 million and equity of $117 million, making up 16% of total assets. The organization has also been consistently profitable for 25 years. In terms of capital strategy, CCDFI has raised $33 million toward a $50 million new capitalization goal to support future lending.

Chair Smith said the NMSBIC was introduced to CCDFI via DreamSpring, because CCDFI is one of the few CDFIs that do construction loans. Chair Smith asked about the NMSBIC’s available funds, and Mr. Cummins responded that NMSBIC currently has $28 million in available funds. Mr. Cummins said that Ventana Fund plans to come back to the board later this year with a request for additional funding. He added there are also discussions with Raza Development Fund about a new relationship. If NMSBIC approves CCDFI’s request, there would be $18 million in available funds for requests from other lending partners.

Chair Smith asked Mr. Harrison about possibly sharpening its pencil relative to the interest rates on loans to its borrowers. Mr. Harrison responded that most of CCDFI’s funding is from banks with a cost of funds of roughly 4.3%, and CCDFI looks to have a spread of 2.5% to 3%. He added that CCDFI does not have a lot of grant funding that might help to subsidize interest rates. Mr. Harrison said that CCDFI is making loans that traditional banks won’t do, and the rate offered by CCDFI is the best rate that its borrowers can find. He said that funding from the NMSBIC at 2% provides a competitive advantage in New Mexico.

Chair Smith said he would like to make sure when NMSBIC funds are being used, borrowers are getting the sharpest pencil possible relative to the interest rate being charged. Mr. Harrison said he mentioned a construction loan that he believes has an interest rate of 7.5%, which he believes is a very attractive rate.

Chair Smith asked if the NMSBIC has ever put a spread requirement on its loans. Mr. Cummins responded that the only time the NMSBIC had a spread requirement was for the NMSBIC COVID-19 lending program, where the maximum rate to borrowers was 3.75% for small businesses that were impacted by the pandemic. Mr. Harrison said that putting a spread requirement on loans would make lending for CCDFI less attractive in New Mexico. Chair Smith said he appreciated that, and obviously we want lenders to be motivated to lend here. However, when using NMSBIC funds, it would be nice to see CCDFI’s spread reflect the NMSBIC’s interest rate. Mr. Harrison said it’s certainly something he can take to his group and consider.

Mr. Grassham asked if it would make sense for NMSBIC to keep more power dry, and approve $6 million now for CCDFI, and evaluate the additional funding at a later date. Mr. Cummins said he recommends approving the full $10 million. He said if CCDFI does not know if NMSBIC funds will be approved for future loans and does not know if funding will come from banks or from NMSBIC, that type of uncertainty would make it more difficult for CCDFI to sharpen its pencil. Mr. Cummins said with other lending partners, his goal is to start discussing increases in lines of credit when utilization reaches about 80%, so that lending partners know NMSBIC funds will be available to close loans.

Mr. Valdiviez moved that the NMSBIC board of directors approve the following changes to the NMSBIC’s revolving line of credit with Clearinghouse CDFI:

• Increase maximum loan amount by $10 million, from $20 million to $30 million; and
• The NMSBIC’s current president and board chair, or vice president and vice chair, be authorized to execute any and all modification documents, subject to review and approval by the NMSBIC’s legal counsel and the NMSBIC’s executive director/investment advisor; and
• NMSBIC’s executive director/investment advisor will report back to the board when the documents have been executed.

Mr. Grassham seconded the motion, which passed by unanimous roll call vote.

Chair Smith suggested the NMSBIC monitor interest rate spreads going forward to ensure fair lending and responsible fund allocation of taxpayer dollars. The board agreed the NMSBIC should track interest rate spreads going forward.

LEGISLATIVE UPDATE, NEW MEXICO 2025 LEGISLATIVE SESSION

Mr. Cummins provided a recap of activity related to Senate Bill 162 (SB162) during the 2025 New Mexico Legislative Session.

• Senate Bill 162 (SB162) was introduced which proposed a $700 million limit on investments in New Mexico private equity funds which is not related to NMSBIC. As SB162 was originally worded, it was unclear if the NMSBIC’s 2% allocation was included in the $700 million limit, or not. SB162 passed two Senate committees, and passed a Senate Floor vote, with amended language to clarify NMSBIC’s funding was not impacted.
• SB162 was referred to the House Commerce and Economic Development Committee (HCEDC), with an amendment going back to original SB162 language, which made it unclear if the NMSBIC’s 2% allocation was included in the $700 million limit. SB162 was not scheduled for hearing by HCEDC.

Mr. Cummins offered his thanks to Treasurer Montoya, Sayuri Yamada, Chair Smith, and Randy McDonald for support throughout the 2025 New Mexico Legislative Session.

Mr. Valdiviez left the meeting at 10:45 am.

NEW MEXICO COMMUNITY DEVELOPMENT LOAN FUND, PROPOSED CHANGES TO LINE OF CREDIT

Mr. Cummins said the New Mexico Community Development Loan Fund (The Loan Fund) indicated it has received a commitment from a bank that includes: (1) extending a $2.5 million line of credit and increasing the amount to $3.5 million, (2) providing a new $500,000 Program Related Investment (PRI) that is similar to an equity equivalent (EQ2) investment, and (3) providing a charitable contribution. Mr. Cummins said he is waiting for confirmation that the above funding has been finalized. Subject to approval by the NMSBIC board of directors, inclusion of new EQ2 and PRI funding in The Loan Fund’s net assets would lower The Loan Fund’s liabilities-to-net assets ratio. He recommended extending the waiver for The Loan Fund’s liabilities-to-net assets ratio through June 30, 2025. He will follow up to confirm the above funding has been finalized.

Mr. Grassham moved that the NMSBIC board of directors approve a modification of the line of credit with the New Mexico Community Development Loan Fund to:

• Provide a temporary waiver of the Liabilities to Net Assets Ratio covenant through June 30, 2025, and
• That the NMSBIC’s board chair and president, or vice chair and vice president, be authorized to sign any all documents related to this change, subject to review and approval by the NMSBIC’s legal counsel and the NMSBIC’s executive director/investment advisor; and
• That the NMSBIC’s executive director/investment advisor report back to the board when the changes have been completed.

Ms. Alley seconded the motion, which passed by unanimous roll call vote.

RBC GLOBAL ASSET MANAGEMENT, INVESTMENT UPDATE

Mr. Cummins introduced RBC Global Asset Management (RBC GAM) representatives Brian Svendahl, Senior Portfolio Manager, and Chris Boppre, Client Portfolio Manager. Messrs. Svendahl and Boppre presented information on the NMSBIC’s investments managed by RBC GAM, as follows:

RBC Global Asset Management Overview:

• Operates 17 specialized investment teams globally, covering various asset classes, including public equities, fixed income, and alternatives.
• The NMSBIC portfolio is managed by RBC GAM’s BlueBay Fixed Income team, with offices in Minneapolis, Stamford, and London.
• Minneapolis-based operations focus on U.S. investment-grade fixed income, impact investing, and liquidity solutions.

Investment Team & Strategies:

• BlueBay Fixed Income has 123 professionals across its locations, overseeing $130 billion in assets.
• The impact investing segment manages over $2 billion in assets, including the Access Capital Community Investment Fund, established in 1998.

Market Outlook & Portfolio Strategy:

• The focus is on market-rate returns without concessionary adjustments, prioritizing investment in New Mexico small businesses.
• There are significant economic uncertainties, including trade wars, shrinking federal government involvement, supply chain disruptions, and inflation concerns.
• The outlook suggests the U.S. is either in or approaching a recession, with persistent liquidity issues in fixed-income markets.
• Despite these challenges, expected returns for SBA pools and cash investments remain above 5%.

SBA Pools & CDFI Collaboration:

• The goal is to create SBA pools comprised exclusively of SBA loans to New Mexico small businesses.
• A recent partnership has been developed with Momentus Securities, a subsidiary of Momentus Capital, which combines CDC Small Business and Capital Impact Partners.
• The collaboration aims to strengthen lending opportunities for small businesses.

Mr. Svendahl noted Momentus is acquiring every New Mexico SBA loan they find, aiming to boost lending volumes in the state. Chair Smith referenced a report showing that SBA lenders in New Mexico including New Tech Bank, Ready Cap Lending, Live Oak, and Western Commerce collectively issued 30 loans worth $20 million in the fourth quarter. Mr. Svendahl responded that some lenders, like New Tech, have their own asset-backed securities capabilities, meaning they may not sell to the secondary market. He said it also appear some New Mexico banks prefer holding SBA loans on their balance sheets rather than selling them in the secondary market.

Mr. Svendahl said the last SBA pool acquired for the NMSBIC included nine SBA loans totaling $1.7 million. He added that acquiring SBA loans in New Mexico requires close monitoring to capture purchase opportunities. Mr. Svendahl said many SBA loans and USDA loans are sold via certificates rather than being pooled. Mr. Cummins recalled that NMSBIC was not eligible to purchase SBA certificates due to Qualified Institutional Buyer requirements and said he would follow up with Randy McDonald to see if that is still the case.

Mr. Svendahl said that enhancing local engagement could improve access to SBA loans. He noted that SBA loan brokers often sell to buyers with established relationships, limiting the visibility of loans for pooling. He said he will revisit this with Momentus. It was noted that establishing direct relationships with New Mexico financial institutions might also improve loan flow.

Mr. Grassham asked if oil and gas related loans are excluded from SBA loans that are pooled and sold to NMSBIC. Mr. Cummins said that RBC initially provided an Impact Statement indicating an exclusion for oil and gas loans, but it appears that document was not included in final documents signed between NMSBIC and RBC GAM. Mr. Boppre said he does not believe it has any restrictions on SBA loans than can included in SBA pools, other than restrictions required by SBA. Mr. Cummins said he will follow up with Mr. Boppre to confirm this.

Mr. Grassham said RBC GAM is holding NMSBIC cash and NMSBIC is paying a management fee on the cash. He said that doesn’t make sense unless we can increase SBA loan volume and get the funds invested back into the community.

Messrs. Svendahl, Boppre, and Cummins agreed to continue discussions on how to increase deployment NMSBIC funds into SBA loan pools. Mr. Cummins will confirm with Mr. Boppre that RBC GAM does not have any restrictions on loans that can be included in SBA pools and will also review Qualified Institutional Buyer requirements with Randy McDonald to determine if NMSBIC is eligible to purchase SBA and USDA certificates.

RBC GLOBAL ASSET MANAGEMENT, REVIEW OF INVESTMENT PERFORMANCE AND RECOMMENDATIONS

Mr. Cummins said Mr. Grassham contacted him and noted NMSBIC has $17.6 million invested in RBC short-term investments, which is an Invesco federal money market fund (Invesco MMF). The yield on the Invesco MMF has been about 0.46% less than the yield on NMSBIC funds invested in the State Treasurer Office’s Local Government Investment Pool (LGIP). NMSBIC is required to have a minimum investment of $25 million invested with RBC GAM. NMSBIC’s investments are currently comprised of $17.6 million in the Invesco MMF, and $10.1 million in SBA pools. Funds from the Invesco MMF are used to settle SBA pools that are delivered to NMSBIC. The RBC GAM investments were set up to have interest and dividends reinvested. Over the past 2 years, roughly $2.7 million in income has been reinvested, bringing the total balance managed by RBC GAM to about $27.7 million.

Given that the LGIP yield is better than the Invesco MMF yield, Mr. Cummins said he plans for $2.7 million to be transferred from the Invesco MMF to LGIP, and that interest and dividends on RBC GAM investments be transferred to LGIP on an ongoing basis. This will bring the balance with RBC GAM back down close to the $25 million minimum investment required. Mr. Cummins said there are board members with authority to make the transfers from RBC GAM. No additional board approval is needed, but he wanted to advise the board of this change in the RBC GAM investment.

NMSBIC DIRECT SERVICES REPORT, RDC ADVISORS LLC COMPENSATION REVIEW AND ANNUAL BONUS

Mr. Cummins said the Professional Services Agreement (PSA) between NMSBIC and his company, RDC Advisors LLC, requires him to provide a Direct Services Report every six months, with the detail of his time spent on management investments transferred to the NMSBIC after the termination of limited partnerships, and management of limited partnerships that are in winding up periods. Mr. Cummins referred to information in the board package regarding time spent on expanded services, and other accomplishments over the past year. He noted the Professional Services Agreement (PSA) provides for an annual compensation review related to changes in circumstances related to NMSBIC’s assets and activities. He recommended no change in compensation at this time related to changes in the NMSBIC’s assets and activities, other than the approved compensation in the PSA and any annual bonus approved by the board. Mr. Cummins noted information provided in the board package with a competitive salary review performed by Randy McDonald in 2023, and calculations showing an estimated apples-to-apples salary equivalent for his independent contractor compensation. Mr. Cummins then excused himself while the board discussed his annual bonus.

Chair Smith commented on the outstanding work done by Mr. Cummins. Mr. Grassham said we also need to think about bringing somebody else on board. He noted it would take time for someone else to understand everything about the NMSBIC. It was noted that financial analysis support from Loftis and Lovato was added this year. Mr. Grassham said that while this help mitigate the risk, additional resources may be needed.

Chair Smith suggested a $40,000 bonus, inclusive of New Mexico Gross Receipts Tax (GRT), which would be a bonus before GRT of about $37,000, compared to $35,000 paid last year. There was agreement for this suggested bonus.

Mr. Cummins was asked to come back into the room. The board informed Mr. Cummins of the approved bonus, and the need to consider adding additional resources to address organizational growth and succession planning.

Mr. Grassham moved that the NMSBIC board of directors approve an annual bonus for RDC Advisors LLC of $37,000 plus New Mexico Gross Receipts Tax. Ms. Alley seconded the motion which passed unanimously by roll call vote.

WESST CONFERENCE ROOM COMPENSATION, THANK YOU LETTER

Mr. Cummins said at the last meeting, the NMSBIC board approved $2,500 in compensation for use of WESST’s conference room. The payment was made and a thank you letter from WESST was included in the board package.

BOARD CONTINUING EDUCATION

Mr. Cummins referenced the New Mexico Economic Development Department’s 2025 State Plan Update, which was included in the board package.

CHAIR’S COMMENTS

Chair Smith thanked everyone for attending and expressed his thanks to DreamSpring for the use of their meeting room.

ADJOURNMENT

Mr. Grassham moved to adjourn at 12:28 p.m. Mr. Grassham seconded the motion, which passed unanimously by roll call vote.

ADJOURNMENT: 12:28 p.m.