Citrus Heights becomes a debt-free city again

Sentinel staff report–
Following a vote by the City Council last month to pay off and close a temporary line of credit, the City of Citrus Heights announced Friday that it is now debt-free again.

The city had long-taken pride in its “pay as you go” philosophy under longtime City Manager Henry Tingle who has been credited with keeping the city out of debt until his retirement in 2016. But two years later, the city made the controversial decision under then-City Manager Christopher Boyd to open a $12 million line of credit as a temporary measure to help the city “get by” until property tax revenues began being received.

Several “big ticket” items the line of credit was intended for was the purchase of the former Sylvan Middle School property and providing matching funds for Auburn Boulevard improvements.

Several council members offered brief comments in support of the March 24 motion to pay off the debt early, and the motion received unanimous support from all five council members.

“This is absolutely wonderful,” said Councilman Bret Daniels. “I hope people in the public are understanding that it’s also a reflection, number one, of the kind of city we are, and number two that we’re alive, we’re vibrant, we’re thriving.”

In an announcement posted online Friday, the city said paying off the line of credit early “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.”

Payment of the full $3.5 million balance was made on April 1, the city said, which saves around $3,000 per week or $110,000 per year in interest costs. There was no prepayment penalty.