94°F
weather icon Clear

Financial plan may save city millions

Three years after its adoption, the city’s financial plan is guiding it toward a financially stable future.

The plan was adopted by the City Council in May 2011 as an ordinance, requiring that a five-year financial plan be reviewed and approved annually by the council. The 2015 financial plan was adopted at the council’s Feb. 11 meeting.

“This plan is basically the same as its been since Day One, with some adjustments,” Finance Director Shirley Hughes told the council.

The plan’s objectives are reducing or eliminating the city’s debt, providing money for capital improvement and rainy-day fund balances, and creating reserves to prevent property tax and utility rate increases.

The plan calls for the city to aggressively pay off debt ahead of schedule by leveraging the increasing lease revenue from the city’s solar facilities in Eldorado Valley. The city estimates it will receive more than $46 million over the next 10 years from solar leases and, in that time, will be able to reduce its overall debt by 65 percent, which amounts to $68 million with interest.

Of the lease revenue, 80 percent will go to the city’s general fund and 20 percent to the capital improvement fund, which is only to be spent with voter approval.

The primary general fund debt includes about $7 million in revenue bonds from the construction of Boulder Creek Golf Club. The bonds require an annual payment from the general fund of about $775,000. With normal payments, the bonds are set to be paid off in 2025. However, the financial plan calls for additional payments of $1.25 million each year through 2016 and $550,000 in 2017. With the advance payments, the debt should be paid off in 2017, saving about $1.5 million.

A general fund debt from an interfund loan from the utility fund to the general fund of $5 million is scheduled to be paid off one year early, in 2019.

The city has utility fund debt of about $5 million for its portion of building the Southern Nevada Water Authority’s third intake valve. To quickly pay off that debt, the financial plan calls for adding $700,000 from the capital improvement fund to the regular $1.1 million annual payment. The accelerated payments are scheduled to have the obligation paid off in 2017, 16 years early, saving $11.5 million.

The city also has a $30 million utility fund debt for revenue bonds to build a raw water line in 2006, which is scheduled to be paid off in 2036. It cannot be scheduled for accelerated payment until 2017, but the plan calls for accelerated payments beginning in 2018 that will reduce the term of the bonds by nine years, saving $15 million.

The financial plan also created a rate stabilization reserve to protect against potential utility rate increases. As of June, the reserve had a balance of $750,000, but the financial plan recommends that the fund contain at least $2.5 million.

Even with the reserve, Hughes said a utility rate increase may be necessary in the future because of a new $476,000-and-rising annual infrastructure surcharge the water authority began charging the city last year.

“This infrastructure surcharge certainly wasn’t on the horizon when the plan was initially created,” Hughes said.

A long-term capital reserve also was established in 2011 for the emergency replacement of major components of the city’s electric infrastructure.

As of June, the reserve had a balance of $750,000, but the plan recommends at least $4 million.

Although the financial plan is not yet meeting all of its goals, Hughes said it is a good plan.

“It gets you out of debt and, in the long run, if you can get to a point where you don’t have a lot of debt on your books, it makes for better financial stability.”

Don't miss the big stories. Like us on Facebook.
THE LATEST
New dog park option proposed

The community is one step closer to having a new permanent dog park after City Council decided to convert an existing softball field into one.

High-end RV resort proposed

Another level of hospitality could be coming to Boulder City by way of a proposed recreational vehicle resort.

Council seeks guidance for placing statue of Patton in park

The Shane Patton Foundation is going to have to wait a little longer to erect a statue of its namesake so that formal city guidelines can be created and other committees can weigh in on the project.

City grants amnesty for home improvements

Residents who have completed unpermitted home renovations or remodels can have their penalty fees waived through the city’s upcoming amnesty program.

Voters to weigh in on police, fire facilities

The ballot for the 2022 general election grew Tuesday, April 12, as City Council approved a question asking voters if up to $7 million in capital improvement funds should be spent on a new police station and a new fire department training facility.

Every dog has its day — and place to play

The back portion of the Little League fields at Veterans’ Memorial Park will be fenced off to create a safe space for dogs to play.

Surplus fire gear sent to Ukraine

The Boulder City Fire Department is helping Ukrainian firefighters by joining the efforts of Operation Fast Response-Ukraine.

Proposal aims to eliminate recreation fees for youths

Residents may have temporary relief from some recreational fees if City Council approves a request from the mayor at its next meeting.

Attorney, clerk, manager get praise, raises

The city attorney, city clerk and city manager received 8 percent pay raises after City Council members gave them glowing performance reviews during a special meeting Tuesday, March 29.

Lowman ready, eager to serve

Boulder City’s new reserve battalion chief is focused on helping the community through his job with the fire department.