Water Bond Options
Water Bond Debt Payment Options
This page is intended to provide information related to the issue the City is facing regarding repayment of bond debt service associated with the infrastructure development and construction of the Water Treatment Plant. For more information residents are encouraged to contact us at (775)784-9805 or via email. We welcome your comments, concerns, and ideas related to how to address these issues.
Update: April 28, 2012
A public workshop was held at Fernley City Hall at 1:30pm for residents and businesses to learn more about the proposed water bond debt fee assessments. City Engineer Shari Whalen gave a presentation and answered questions related to the different options the City Council is considering. You can view the PowerPoint presentation (PDF).
Update: April 11, 2012
A public workshop was held at Fernley City Hall at 5pm for residents and businesses to learn more about the proposed water bond debt fee assessments. City Engineer Shari Whalen gave a presentation and answered questions related to the different options being considered. You can view the PowerPoint presentation (PDF).
Update: April 6, 2012
At the April 4th City Council meeting a motion to direct Staff to move forward with a not to exceed $44 water bond debt fee for existing water customers, as outlined in option #1 under item #10 on the April 4, 2012 agenda was approved by a 3-2-0 vote: Yes: Councilman Chaffin, Councilman Edgington, Councilman Eilrich, No: Councilman Parsons, Councilwoman Malloy.
A motion to direct Staff to proceed with a Business Impact Study related to item #10 of the April 4, 2012 agenda was approved by a 3-2-0 vote: Yes: Councilman Chaffin, Councilman Edgington, Councilman Eilrich, No: Councilman Parsons, Councilwoman Malloy.
A public workshop has been scheduled for Wednesday, April 11th at 5:00pm. See below:
The City of Fernley is soliciting information from businesses and residents regarding the proposed Water Bond Debt Fee in order to prepare a Business Impact Statement pursuant to NRS 237.090 and a potential resolution on the same to address the impact of the proposal. A workshop has been scheduled to allow the public time to ask questions and provide comments to City Staff. The meeting will be held on Wednesday, April 11, 2012 at 5:00 p.m., in the Council Chambers at 595 Silver Lace Blvd Fernley NV 89408.
Public Comment forms may be found at the Public Works Office, City of Fernley 595 Silver Lace Blvd, Fernley NV 89408 or online at the BIS page.
April 4, 2012
Informational Letter to Residents
April 4, 2012
To: Residents of Fernley
Re: New Water Bond Fee – One of Four Options
In 2001 the United States Environmental Protection Agency passed a new law that required the City to remove arsenic from our groundwater. In order to remove the high levels of arsenic, the City had to build new pipelines and a new arsenic removal plant for the groundwater. The whole project cost about $75 million to build, the City borrowed all the money to pay for construction. At the time this was going on, people who worked at the City were counting on the idea that new homes and new businesses would generate enough income for the City to pay off the loan over the next thirty years.
Since the arsenic removal plant started operating in 2009, we have been able to provide water to our community that meets the new arsenic rule. So the good news is that our drinking water is now safe.
The bad news is that we’re having a hard time paying off the loan. Every year the City has to pay the loan company $4.7 million, but we only collect $4.8 million in the form of utility payments. That means there’s no money left over to run the system, fix the water pipes or the pumps, repair leaks, and make sure everything’s running right every day. There’s also no money left to fill the trucks up with gas, or pay the power bill for the wells, or to buy the chemicals needed to remove the arsenic from the water, or to protect our water rights for the future. To make sure the people in Fernley get clean drinking water every day, it costs the City over $2.5 million each year.
The income that the City was betting on back in 2007 and 2008 didn’t happen, primarily because of the recession. When the trouble with the economy was in full swing back in 2009, the City Water Account had over $8 million in savings. For the last three years, the City has cut the water budget and tried to pay off the yearly loan payment, but because there’s not enough money coming in from utility payments, we’ve dipped into the savings account every year. Last year the City charged an $18 fee for residential customers and a $36 fee for businesses utilizing City water in an effort to offset those costs, but it didn’t generate enough money to solve the problem. Now the City Water Account has about $2.5 million left in savings. There’s another payment due in August 2012, and after that, the City won’t have enough money in the savings account to pay the payment due in February 2013.
At the first budget workshop this year, the City talked about ways to solve this problem. Some of the solutions were to charge a new fee, sell the water utility to a private company, find new customers to help share the cost of running the system, or refinance the loan to lower the yearly payments. At tonight’s City Council meeting, we will be talking more about these four options.
The new fee is one way to solve the problem of the $4.7 million annual payment, but it’s not the only solution. Also, no matter what City Council discusses during the meeting, the City is required to provide more opportunities for our community members to share their opinion. There will be other meetings and opportunities for public, you can also send letters, emails, or call City Hall with your comments. Whatever works for you – we want to know what you think and if you have any ideas.
Finally, if you would like more information, we are here to help. You can call the City Manager,
Fred Turnier, at 784-9805, or send an email (please put Water Bond in the subject line). Staff reports regarding the details on the options we think might help solve the $4.7 million problem are available on our website and can be accessed directly at the Water Bond Options page.