Passage of ballot question could help city become debt free

On Election Day local voters will choose if Boulder City officials can use money from a specific fund to accelerate payments on the city’s last remaining debt.

A yes vote on Boulder City ballot Question 1 would give the city permission to use money from the capital improvement fund to make accelerated payments for the raw water line. A no vote would force the city to pay off the debt as scheduled through the utility fund.

The $28 million water-line debt (principal only) is the only debt remaining on the city books. City Clerk Lorene Krumm said in May that at the current rate the city would be paying $10 million in interest, but at an accelerated rate the city could cut that amount in half.

If the ballot question is approved, the city would start making accelerated payments in fiscal year 2017. However, it does not mandate when to use improvement fund money or how much the city has to use per year. The ballot question simply gives the city permission to use the money for the water-line debt.

City Council voted unanimously to present the question to voters in May and Mayor Rod Woodbury openly expressed his support for it in his Oct. 5 column.

In that column Woodbury said the city wants to increase its annual debt payments by $750,000 each year. The city is currently required to pay $2.3 million each year, according to the ballot question.

Paying the extra $750,000 each year would pay off the debt by fiscal year 2028 instead of 2036, the city’s current time frame.

Council members and some city officials said this was an opportunity for Boulder City to be debt free.

“I have been trying to start the phrase debt-free BC,” Councilman Cam Walker said. “A debt-free city is something that I have not heard of.”

Krumm also said a debt-free city was a rarity.

Paying off the water-line debt from the capital improvement fund also would open up more money in the utility fund, according to an argument written by Bruce Woodbury in favor of the ballot question.

“Authorizing the use of this fund to accelerate the payment of the city’s sole remaining debt would free up money in the city’s utility fund for much-needed improvements and projects.”

Public Works Director Scott Hansen said that having that extra money in the utility fund not tied up in debt could potentially speed up the process of fixing the city’s aging utility system. However, he was not making a guarantee that would happen.

“If we had some extra money in the utility fund, I could see us being able to move forward on some projects quicker,” Hansen said.

Walker said allowing the city to use capital improvement fund money could give the city the ability to renegotiate utility rates.

“If we have that extra money freed up in the utility fund, then we are going to have to look at our current rates again and maybe reassess them when we are creating the next budget,” Walker said. “I had originally wanted this question to pass before we raised rates and then talk about increases from that point.”

The cons to pass the bill are, in many ways, based off the voters’ perceptions. Taking money to pay off debt out of the capital improvement fund would free up money in the utility fund, but it would also take away improvement fund money.

According to the argument against passage written by Krumm, the debts are assigned to specific funds and should stay that way.

The city is required to write pros and cons for each ballot question brought to voters. No one in the city volunteered to write the cons for Question 1 so Krumm volunteered. She is not against the passage of Question 1.

“The capital improvement fund should not be used to pay debt incurred in the utility fund,” Krumm wrote. “The utility fund is an enterprise fund and rates must be designed to recover the cost of service. … The City Council recently passed utility rate increases to cover all cost of utilities including the debt on the raw-water line.”

The argument goes on to state that the city has used $1.5 million from the capital improvement fund already and if the city continued taking away from that fund, there would not be enough money to pay for new projects like a new swimming pool or maintaining historic buildings in Boulder City.

City Manager David Fraser said that he encourages residents of the community to get out and vote as well as look at both the pros and cons of the ballot question thoroughly.

Early voting begins Saturday, with Boulder City polls open from 7 a.m. to 6 p.m. Oct. 31 and Nov. 1 in the council chambers at City Hall.

Contact reporter Max Lancaster at mlancaster@bouldercityreview.com or at 702-586-9401. Follow him on Twitter @MLancasterBCR.

Local political races

In addition to electing a new president, vice president and state senator, Boulder City residents will be asked to vote on a number of other issues and races, including selecting representatives for statewide and regional offices. Those include:

■ Representative in Congressional District 3

David Goossen, no political party

Warren Markowitz, Independent American

Jacky Rosen, Democrat

Danny Tarkanian, Republican

■ State Assembly District 23

Craig Jordahl, Democrat

Melissa Woodbury, Republican

■ State Board of Education, District 3

Dave Hales

Felicia Ortiz

■ Clark County School District, District A trustee