City Manager

Tax-Neutral Bond

At a virtual public meeting on April 21, 2020, the Henderson City Council approved the authority to issue general obligation bonds to finance civic construction projects. Future projects could include a new police station and training facility, addition of new parks and recreation facilities in growing west Henderson, rehabilitation of existing facilities in more established areas of Henderson and renovation and upgrades to the Henderson Pavilion. Projects funded from the bond proceeds will still need to be approved at future City Council meetings.

The bond issuance is tax neutral – taxes do not need to be raised due to the maturation of previous debt obligations. While it has up to 18 months to issue the bonds, the City can take advantage of today’s historically low interest rates and save taxpayer money. The bond issuance includes the refinance of older debt which will save the City and the Department of Utility Services more than $9M in interest over the life of the bonds.

Civic construction projects will not only address the community’s infrastructure needs but will also kick start our community’s long-term economic recovery from the COVID-19 public health emergency. Now is the right time to be investing in the future of our community.


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Standard and Poor’s Reaffirms City of Henderson’s AA+ Bond Rating

Standard and Poor’s (S&P) Global Ratings has reaffirmed the City of Henderson’s AA+ long-term bond rating with a stable outlook, the highest rating among the incorporated cities in Nevada.

The S&P Global Ratings report notes that although there are risks related to the COVID-19 pandemic and budgetary pressures due to the majority of Nevada cities being anchored in tourism, the City of Henderson continues to exhibit strong performance metrics. S&P analysts say they “believe the city’s very strong reserve and liquidity positions provide a substantial cushion to absorb the near-term projected revenue declines. The city has benefitted from its growing local tax base and correlated operating revenues in the last several years, allowing the city to build up its accumulated general fund and financial stabilization reserves.”

The report names several factors that contributed to Henderson’s AA+ bond rating including a very strong economy that is a direct outcome of the City’s economic diversification and business recruitment efforts, which have resulted in such projects as the Google data center, Haas Automation manufacturing facility, the Raiders Headquarters and Practice Facility, Amazon fulfillment center and the future Henderson Event Center. Other contributing factors noted in the report are:

• Very strong management, with strong financial policies and practices under the Financial Management Assessment methodology
• Very strong budget flexibility and liquidity, with an available fund balance in fiscal year 2019 at 19% of operating expenditures
• Adequate debt and contingent liability profile, as well as low overall net debt at less than 3% of market value
• Commercial building permit count increase of 16.1% in 2019 with residential permit count remaining relatively steady

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April 20, 2020

Re:  Bond Issue for Infrastructure Investment in Henderson

Thank you for your interest in the proposed bond issue that is scheduled for consideration and discussion by the Henderson City Council during the April 21, 2020 City Council Committee meeting (Agenda Item C-2) and, if referred for adoption,  during the City Council Special meeting (Agenda Item O-50).  An explanation of this tax-neutral bond issue, the financial advantages it provides, and its intended uses can be found on the City of Henderson website at the following location:

https://www.cityofhenderson.com/city-manager/tax-neutral-bond

There will be public comment opportunities during the Council meetings on April 21, 2020.  For more specific information about how you can participate and provide public comment during the current public health emergency in accordance with the new regulations put in place by the Governor, please visit the City’s website at:

https://cityofhenderson.com/city-clerk/city-council-and-redevelopment-agency/agendas-back-up-minutes-video

The bond ordinance agenda item that you refer to will be another step in a process that began in late 2019 in order to meet the development needs of West Henderson and to invest in aging infrastructure.  Since that time the City has adhered to all applicable statutory requirements and timelines for the issuance of debt.  This bond issue is tax neutral; taxes will not be raised in conjunction with this debt as debt is also being retired.  This bond ordinance also includes a proposal to refinance existing debt at lower rates, resulting in net savings to our taxpayers over time.

In December of 2019, the City Council initially directed staff to seek approval for the issuance of bonds for the purposes described from the Clark County Regional Debt Management Commission, a statutory body of elected officials from across Southern Nevada that reviews and approves debt issuance by the local government entities and exercises oversight of the indebtedness and debt management plans of the entities.  The Commission unanimously approved Henderson’s proposal for this debt issuance. Following receipt of approval for the debt issuance, the City Council adopted resolutions of intent to sell the bonds and held a public hearing at the February 18, 2020 City Council meeting after publishing three previous legal notifications of its time and place.  At the April 7, 2020 Special Meeting the associated bill for the bond issue was referred to the April 21,2020 Committee Meeting for review and recommendation.

Henderson has long focused on financial resiliency and as a result we maintain a very high, investment grade bond rating of AA+ with Standard and Poor’s. This is one of the highest bond ratings amongst incorporated cities in the State of Nevada and is based upon our robust financial position and proven fiscal management.  This high bond rating, coupled with the current low interest rate market, will ensure that the City can issue debt at the lowest rates available. This bond issuance was only contemplated after previous debt obligations had matured, enabling the City to reissue bonds to provide additional bonding capacity for infrastructure.  The timing and the sizing of these bonds were based on avoiding adding any additional costs associated with servicing the City’s debt.

The proposed $60 million bond issue includes funding for a new police station in West Henderson, funding for new parks, funding for rehabilitation of existing parks and recreation facilities, and funding for repairs and upgrades previously planned for the Pavilion after its closure due to the damage sustained by the roof structure as a result of weather events. The latter category includes replacement of the seats at the Pavilion which have begun to fail and are no longer manufactured, restroom improvements, concession improvements, replacement of the sound system, extensive improvements to comply with the Americans with Disabilities Act, creation of an enclosed family entertainment venue for year-round use, and several other improvements necessitated by age and weathering. 

Should the City Council approve this bond issue, the individual projects mentioned above would still be required to come before the City Council separately at future City Council meetings for approval of all expenditures. The repairs and upgrades for the Pavilion described would modernize the Pavilion so that it will more effectively address the needs of our growing city of over 300,000 residents and contribute to our quality of life.

The infrastructure that would be addressed with the current bond issue is considered essential civic infrastructure for our community and its residents, contributing to public safety, our quality of life, and the City’s ongoing development.  We also believe that the current public health emergency will require that governments at the local, county, state and federal level do not curtail their spending on infrastructure projects and other works which will create jobs and increase the cash flowing into the economy.  These types of investments are extremely important for the future of our community and provide direct support for our long-term economic recovery.  Additionally, these infrastructure projects are in perfect alignment with the stated priorities of the Federal Administration and Congress in terms of the investments that will be most effective in supporting businesses, spurring the economy and creating the jobs that will be urgently needed in the wake of the pandemic.

The timing of these bond issues is very advantageous in that it would allow the City to borrow at historically low interest rates, saving taxpayers’ money over the duration of the bonds.  In addition to the bonds issued for infrastructure, the City will be taking advantage of the current favorable market conditions to refinance some of its outstanding debt.  Re-financing our existing bonds will result in over $9 million of savings in interest that the City and its Utility Division will realize over the life of the bonds while also providing the job creating infrastructure investment discussed previously.

Your interest in our community’s wellbeing and future is appreciated.  Please keep yourself and your family safe during this public health emergency.

Sincerely,

Debra March_white

Debra March
Mayor



In 2019, the City of Henderson began the planning process for essential civic projects that would upgrade aging infrastructure and meet the development needs of west Henderson.

For the residents that reside in the growing west Henderson community, these projects could include a new police station and police training facility, new parks and recreation facilities and new public amenities. 

In the more established areas of Henderson the City has recognized the need to rehabilitate existing facilities, including renovations and upgrades to the Henderson Pavilion that were identified after extensive storm damage to its roof structure in 2018.

These are all projects that could be funded by general obligation bonds.

At their public meetings on April 21, the City Council is only considering the issuance of tax-neutral bonds and will have up to 18 months to take the next steps in the process. Should the City Council approve the tax-neutral bond issue, any specific project expenditures will have to be approved by the City Council at future meetings.

The timing of these bond issues is very advantageous in that it would allow the City to borrow at historically low interest rates, saving taxpayers’ money over the duration of the bonds. In addition to the bonds issued for infrastructure, the City will be taking advantage of the current favorable market conditions to refinance some of its outstanding debt. The City Council is considering the issuance of bonds to take advantage of today’s historically low interest rates. Refinancing existing bonds will result in over $9 million in interest savings for the City and Department of Utility Services over the life of the bonds.

Henderson has long focused on financial resiliency and as a result we maintain a very high, investment grade bond rating of AA+ with Standard and Poor’s. This is one of the highest bond ratings amongst incorporated cities in the State of Nevada and is based upon our robust financial position and proven fiscal management. This high bond rating, coupled with the current low interest rate market, will ensure that the City can issue debt at the lowest rates available. This bond issuance was only contemplated after previous debt obligations had matured, enabling the City to reissue bonds to provide additional bonding capacity for infrastructure. The timing and the sizing of these bonds were based on avoiding adding any additional costs associated with servicing the City’s debt.

This bond issue is tax neutral. Taxes will not be raised in conjunction with this financial obligation.

The civic projects funded by this bond will not only address the community’s infrastructure needs now and into the future but will also create jobs and contribute to our long-term economic recovery from the COVID-19 public health emergency.

We invite residents to participate in the virtual City Council meeting on Tuesday, April 21.