I am still trying to discover the source of the "shortfall of $400,000" Indian Hills GID board member Renee Haskell recently claimed the district has in funding its new $1.6 million sewer plant upgrade and expansion (see May 3 Nevada Appeal letter to the editor).
She stated, "We are looking at the reality of having to find funding for that shortfall, and some of those options could fall directly into the pocketbooks of the residents of this community."
In reality, the funding "problem" was resolved before we ever signed the construction contract. Thanks to the efforts of the district's general manager, Jim Bentley, we were able to procure a $1.3 million low interest (3.48 percent) state sponsored loan to fund the bulk of the project, with up to 20 years to pay off the loan. As for the "shortfall," I don't plan to look any further than the $506,000 we currently have sitting in our Water/Sewer Enterprise Fund bank account. But don't take my word for it, check out the district's books for yourself!
Depending on the number and timing of future sewer hookup sales, the 20 year loan payback period will likely be shortened considerably. Furthermore, the need to tap into our Water/Sewer Enterprise Fund will be reduced according to the number of sewer hookups sold to developers over the next few months. Future sales will more than replenish the enterprise fund.
The prospective revenue sale of the 143 residential hookups still needed for build out by just one developer, JSDevco, more than exceeds the entire "shortfall." Even under the worst case financial scenario, whereby all development within the district would immediately and forever cease (highly unlikely!), the district would be able to foot the entire bill for the plant over the next 20 years without raising current monthly rates beyond that of the prevailing inflation rate.
Ms. Haskell also claims she is "still trying to get a straight answer" regarding the costs associated with the proposed IHGID community center/office complex. Who is she waiting on? A fairly detailed analysis of all costs, including basic operational costs, was included with the newsletter survey distributed to district residents in January of this year. Unfortunately, she refuses to believe either the survey results or the cost analysis already provided.
The fact is, we do not have the cash on hand to fund the entire facility. But does that mean we can't afford it? Like most home buyers, the district will have to borrow some funds or sell bonds (probably up to half the total estimated cost of $1.5 million, depending on how successful we are in obtaining grant assistance). We will then pay off this debt over time with a combination of existing ad valorem taxes and user fees.
Realistically, we should be able to pay off any such loan (or bond) in no more than five years, without raising current property tax rates. In fact, depending on the length of the payback period, a reduction in current property tax rates is still quite feasible (our fiscal year 2001 tax rates are already scheduled for a 2 percent cut)! The district is currently utilizing just 54 percent of its total legally allowable bonding capacity of $26 million. Increasing that bonding capacity utilization by another 2-3 percent is hardly going to bankrupt the district!
STEVE WEAVER, Board Chairman
Indian Hills General Improvement District
