Failure on lease payments could force Boulder City to make cuts

By Dylan Scott

Wednesday, Aug. 25, 2010 | 2:05 a.m.

Boulder City is preparing to make budget cuts, including employee layoffs, if a renewable energy company fails to make $3 million in payments on its lease with the city.

At the City Council meeting on Tuesday, City Manager Vicki Mayes presented a series of reductions to address the potential shortfall.

But she said she hopes the measures won’t be necessary after an attorney with the company told her it had a tentative agreement with a third party to make the payment and take over the lease.

Boulder City had budgeted based on an expected $3 million in payments on the lease between the city and Sol Bio, an energy firm that planned to build a photovoltaic solar panel plant in Eldorado Valley.

The city and the company, which is more than six months late on its first payment, are exploring ways the payment can be made — including having a third-party take control of the lease.

Mayes will report back to the council in September before any potential cuts are implemented.

The first phase of reductions would freeze capital spending by the city and leave vacant some full-time positions, such as an unfilled sergeant’s post in the police department.

Those actions will be taken on Sept. 1, unless a payment is received or the company has appeased the council’s concerns about payment being made by the end of the 2011 fiscal year.

The second phase, tentatively set to begin Oct. 1, would reduce non-essential city services provided by Boulder City and, Mayes said, involve eliminating some part-time positions.

The third phase would include layoffs of full-time employees. It is scheduled to begin on Nov. 1.

The City Council would have to approve cuts in the latter two phases.