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Henderson finance director warns FY27 relies on $5 million from fund balance; council authorizes committee to pursue development outreach
Summary
The City of Henderson presented a $51 million FY27 budget that uses about $5 million in fund balance to close a gap, eliminates general fund capital outlay, and continues water and sewer rate increases tied to the Kerr Lake Regional Water expansion; council agreed to form a developer outreach committee.
Finance Director Joey Fuqua presented the City of Henderson’s recommended FY27 budget May 11, outlining a $51 million total budget and steps staff took to close a funding gap that otherwise would reduce services.
Fuqua said the General Fund is $28 million and public safety accounts for approximately $14 million. To balance the FY27 budget the city plans to use about $5 million in fund balance and eliminate all general fund capital outlay and nonessential travel. He cautioned the council that continued reliance on fund balance is unsustainable and could require service or staffing reductions in future years.
Fuqua highlighted near-term revenue prospects that could stabilize finances, including the first phase of Dabney Village (expected to bring 350-plus single-family homes valued around $350,000 each when built), related commercial development, and a potential data center that could produce substantial new revenue. He also noted the city is reviewing a proposal to sell three communication towers for about $1 million but said selling recurring lease revenue for a one-time payment requires careful evaluation.
Water and sewer rate increases will continue under the Stantec financial model until the Kerr Lake Regional Water plant expansion is complete in late 2026 or early 2027; enterprise funds (Water, Sewer, Regional Water) remain stronger than the General Fund. Fuqua reported Water Fund serves about 9,200 customers and Sewer Fund about 7,800 customers.
Councilmembers discussed accelerating development and forming a committee to create a developer welcome package; Mayor Elliott asked for consensus and the council agreed to proceed with the committee.
Fuqua concluded that the city’s long‑term fiscal stability hinges on new development, annexation, redevelopment tools and potentially the proposed data center; without new recurring revenue sources, the unassigned fund balance could fall below $5 million next year.
