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On Friday, April 1st the City of Citrus Heights again achieved a debt free financial position by accelerating the payment of an outstanding $3.5 million balance on a $12 million Revolving Line of Credit. In a related action, the Citrus Heights Community Center building which was pledged as collateral for the line of credit will be released back to the City who will be in full control of the City asset. This action was put forward under the leadership of new City Manager Ashley Feeney to advance financial goals and strategically leverage the General Fund’s $3.6 million surplus from Fiscal Year 2020-2021 and a smaller projected surplus this fiscal year. City Council unanimously approved the resolution authorizing the accelerated payment of the outstanding balance at a March 24 City Council meeting.
In November 2018, City Council authorized entering into a revolving credit agreement with Western Alliance Equipment Finance, Inc. in an amount not to exceed $12 million to finance certain capital improvements and operating expenditures. The revolving line of credit was structured as a site lease with the Citrus Heights Community Center building pledged as collateral. Of the $12 million revolving line of credit limit, the City has drawn down $3,520,001 for the purchase of the former Sylvan Middle School property and associated holding costs. By paying the $3.5 million outstanding balance early the City will realize savings of approximately $3,048 per week (or $110,000) in avoided interest costs over the initial projected payoff schedule.
City Council’s approval of this action is aligned with our community’s guiding principle of fiscal prudence and made possible by strategically managed expenditures along with increased revenue forecast factors including one-time building fees and higher than projected sales tax revenues. While these operating surplus dollars are being leveraged to meet immediate financial goals, work continues to meet unfunded infrastructure maintenance needs in excess of $12 million per year.