Ferraro needs to show sound finances

Dan Kulin

Thursday, April 10, 2003 | 9:47 a.m.

A day after running second in the Boulder City primary, incumbent Mayor Bob Ferraro said he believes he can still beat challenger Bill Smith in the general election by convincing voters that the city's finances are sound.

Ferraro also expects to carry "a good number" of the 1,148 votes that went to Councilman Mike Pacini in the mayoral primary. The mayor said Pacini has promised to support him in the general election. Pacini did not return telephone messages seeking comment.

"With Mike Pacini in the race, he took a lot of the votes I would have gotten," Ferraro said.

In the Tuesday primary Ferraro received 1,650 votes, while Smith, a former councilman, received 1,784 votes. The two candidates will face off in the June 3 general election. Early voting is from May 17 to May 30.

Ferraro said Smith's primary victory was largely the result of Smith's ability to convince voters the city is headed for a financial doomsday.

"He carried a message of gloom and doom to the citizenry and they took it to the polls," Ferraro said.

Large numbers of voters believed Smith because he presents himself and his argument well, Ferraro said. Also, Smith's resume -- he was on the council from 1997 to 2001 -- makes him a credible source of information on city financial matters, Ferraro said.

But Ferraro said Smith's claims are far from the truth and he plans to wage an aggressive campaign to explain his side of the argument to city voters.

The specifics of the information campaign are still to be determined, but Ferraro said he will likely provide voters with "fact sheets" on city finances that could include specific financial figures to back up his argument.

Ferraro said he will probably put the information in coming campaign literature to be sent to voters and in newspaper ads, and that he may conduct community meetings to discuss city finances.

"I intend to get out the factual evidence," he said.

The mayor said evidence of the city's financial health includes the city's large fund balance, which is unspent money left over from previous years. City budget projections put the fund balance at about $4.9 million, or about 29.6 percent of the city's $16.7 million general fund.

But Smith says financial projections included in a July report done for the city by Hobbs, Ong & Associates show that over the coming years the city's expenditures will exceed annual revenues and bleed the reserve account until it runs out of money in the 2009-10 fiscal year. The city, Smith says, will need to spend less in the future.

Smith hasn't said what he would cut. But he says voters should see him as the only mayoral candidate willing to give them the bad news.

Ferraro says the financial projections in that report do show the city's reserve account dwindling to zero over the coming years. However, Ferraro pointed out that the report's projections did not account for expected revenue from leasing city-owned land in the Eldorado Valley to Copper Mountain Power for a natural-gas power plant. The potential lease of additional land in the valley to Duke Solar Energy for a solar plant also was not in the projections, Ferraro said.

Also, more recent city projections show the fund balance fluctuating between about $4.5 million and $5 million through 2008, instead of taking the steady downturn projected in the independent report.

Smith has also focused on the large long-term debt from two major projects, the new Boulder Creek Golf Club and a second water line from Lake Mead, which have come on line in recent months.

Together the city borrowed more than $55 million for the projects, money that Smith says city taxpayers will ultimately have to repay.

Ferraro said neither debt will affect the general fund because both projects will be paid off by users, plus a portion of a Clark County sales tax designated to help pay for the new water line.

But Ferraro said the large debt probably "raised eyebrows" among city voters who are not used to seeing such costly city projects.

Smith said that while city leaders may hope both debts don't fall on taxpayers' shoulders, one can't base the financial health of the city on hope.

Smith said he hopes the details of the city's financial information is shared with voters because he thinks it will show he's been right all along.

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