The City Council met with department heads Tuesday to discuss its tentative budget for the next fiscal year.
The budget, according to City Manager Dave Fraser, is similar to last year’s, but with a few differences.
“There is some belt-tightening here and there,” he said.
Revenue in the general fund is up 9.5 percent from last year, helped in part by an increase in property tax, consolidated tax and charges for service. About $1.6 million from the general fund will be used to pay for various projects, city vehicles and equipment.
Revenue in the utility fund is down 6 percent, but infrastructure sales tax is up 2 percent. Fraser said until now, he hadn’t seen a time where a city’s general fund was in better shape than its utility fund.
“It’s just common that the utility find is the healthier of the funds,” he said. “The news is encouraging this year in the general fund. We’re heading in a good direction. I think during the course of this year it’s going to be important to have some discussions of how we ensure that the utility fund stays healthy and viable going into the future.”
Revenue from the solar leases in Eldorado Valley have helped the city accelerate some of its debt payments, including the revenue bond for Boulder Creek Golf Course, which is expected to be paid off by June, according to Finance Director Shirley Hughes.
The interfund loan used to help pay off the Boulder Creek debt is expected to be paid off in July, with the remaining money going to balance the utility fund for the 2016 fiscal year.
“That fund really needs some attention,” Hughes said.
Mayor Roger Tobler said the city needs to accelerate its rate of debt reduction, if possible, in case of an emergency. The city has been working to address its electrical infrastructure needs, especially after two substation transformers went out last year.
“All of these things we’re going to have to look at sooner rather than later,” Tobler said.
One ballot question, which passed in the November election, allows the city to spend about $500,000 per year during the next seven years from the capital-improvement fund to pay for utility infrastructure needs.
The other question that passed allows the city to sell 29 acres on Bristlecone Drive and Adams Boulevard to make repairs and utility improvements.
“We can do some creative things like we’re doing with the property sales. That will help,” Fraser said. “But you’ve got a $5 million solution to a $25 million problem. Obviously that helps, but it’s not the whole solution.”
Fraser said another cause for the unhealthy utility fund is the city’s low utility rates.
“Our rates on all utilities are very low. The council’s worked hard to keep them low, and they’ve been low for a lot of years,” he said.
The city’s portion of the third intake pipe at Lake Mead, which is paid through the capital-improvement fund, has also made it harder to pay off debt, Fraser said. Currently, the city spends $1.8 million a year on the project, and that debt is expected to be paid off by 2017.
“Part of what we’ve been struggling with is the debt,” Fraser said. “We have the third intake pipe, which is a very important project. It was critical that they did that, but hugely expensive.”
But the city’s budget is still on the right track, Fraser said. Deferred solar lease payments from Techren Solar and KOMIPO will be used to pay off debt in the general fund, and the city was able to fund two more full-time positions.
“We’re not budgeting any revenue we don’t have. And we’re not budgeting any money we think we may receive,” Fraser said.
The city’s tentative budget must be sent to the state by April 15.
Contact reporter Steven Slivka at email@example.com or at 702-586-9401. Follow @StevenSlivka on Twitter.