City Manager

Fiscal Sustainability

Revenues

City revenues are anticipated to be greatly impacted by the COVID-19 pandemic, resulting in an estimated $37.3 million in decreased revenue for Fiscal Year 2021. Intergovernmental revenue, the City’s largest revenue stream at 37.9%, consists primarily of consolidated tax (CTAX) and is anticipated to be hardest hit with an estimated decline of $35 million in Fiscal Year 2021.  To cover anticipated budget deficits from these revenue losses the City is anticipating to utilize reserves within the General Fund unassigned fund balance as well as the City’s Financial Stabilization Fund.

Where the money comes fromconsolidated tax













Expenditures

City leaders have implemented measures to protect the fiscal sustainability of the City including a reduction of $17 million in expenditures from the Fiscal Year 2021 tentative budget (pre-COVID-19) to the final budget. These reductions reflected in the Fiscal Year 2021 final budget include:

  • No personnel additions
  • No new programsExpenditures
  • No cost of living adjustments for any employees
  • Hiring freeze
  • Travel and training restrictions
  • Halting tuition reimbursement through end of the year

Financial Resiliency

To ensure long-term financial resiliency and fiscal sustainability, the City of Henderson continues to maintain reserves in fund balances and net assets of the various operating funds at levels sufficient to protect the City’s credit worthiness, as well as its financial position from unforeseeable emergencies. The current status of reserves includes:

  • The General Fund undesignated fund balance at the end of Fiscal Year 2021 is projected to be $21.7 million, or 8.3% of the budgeted revenue.
  • All Enterprise Funds are projected to have adequate cash balances to maintain operationsand provide sufficient reserves for emergencies and revenue shortfalls.
 

The City of Henderson has one of the highest bond ratings of any city in the State of Nevada. In May 2020, Standard & Poor’s Global Ratings and Moody’s Investors Services reaffirmed its long-term rating of AA+ and Aa2, on the City’s issuance of the 2020 General Obligation Various Purpose and Refunding Bonds, Series 2020B1 and B2.

City Finncial Rating

According to the S&P rating report dated May 21, 2020, “We view the city's management as very strong, with strong financial policies and practices under our FMA

methodology, indicating financial practices are strong, well embedded, and likely sustainable. Highlights of key policies

and practices include:

• The city's conservative revenue and expenditure assumptions based on multiple years of historical data, along with data from various external resources for revenue projections;

• Monthly review of budget-to-actual reports with the city council;

• The maintenance of a comprehensive five-year operating forecast and capital improvement plan with funding sources identified for capital projects;

• A formal investment management policy that goes beyond state guidelines, with reviews of investment holdings and earnings with the council annually at audit adoption;

• The adoption of a formal debt management policy to help guide large financing decisions, which imposes additional quantitative limitations on issuances; and

• The adherence to its formalized reserve policy of maintaining a minimum reserve that is equal to roughly 16.6% of general fund budgeted revenue, including a general fund unassigned fund balance of 8.3% and a separate financial stabilization fund of 8.3%.”

 

The City’s bond rating reflects the credit industry’s faith in the City of Henderson’s financial management and its ability to repay outstanding debt. Higher rated bonds indicate less risk to prospective bond buyers, which translates to lower interest costs to the City. The rating action also reflects our view of the City’s long term financial resiliency.