With a confirmed opinion from a financial and legal expert, the El Dorado City Commission approved Monday night to pay off approximately $8.3 million in debt from the lake in the 2019 budget.

With a confirmed opinion from a financial and legal expert, the El Dorado City Commission approved Monday night to pay off approximately $8.3 million in debt from the lake in the 2019 budget.

The debt of stages 2 and 3 is under a 50-year contract that started when El Dorado Lake combined with Bluestem Lake in 1981.

The contract is with the United States Army Corp of Engineers for access to water from 1,296 to 1,339 feet about sea level for city or industrial use. This is about 22 million gallons per day. The city currently uses about 9 million gallons per day.

The city has already paid $3.3 million in interest and is looking to save $8 million in future interest payment with the one time lump sum payment.

The city has been setting back $225,000 a year to pay for the debt.

The Fiscal Impact report attached to the city agenda explains how the city will pay off the debt:

“The City currently has $7,177,088.16 from the lake debt fund invested in CD’s. The expected interest earned on these CD’s by the end of 2018 will be approximately $80,000. The annual transfer of $225,000 will be added to the cash balance of $235,891.60 for a total of $460,891.60. The total cash available on December 31, 2018 will be $7,717,979.76.

The 2019 budget currently includes the annual transfer of $225,000 and the two annual payments for Stages 2 and 3 of $125,535 and $315,817.59, respectively. It is estimated that another $39,000 will be collected in interest earnings during 2019 prior to the payment. Adding these funds to the available funds from December 31, 2018, the City will have a total of $8,423,332.35 available in the lake debt fund.

December 31, 2018, the balance of Stage 2 will be $1,960,531.28 and the balance of Stage 3 will be $6,220,108.39, for a total of $8,180,639.67.

Should the City Commission choose to pay off Stages 2 and 3, the available cash in 2019 will be sufficient to pay the remaining balances, leaving a cash balance of $242,692.68.”

The commission also approved the new design for the flag for the City of El Dorado. A total of 1371 votes were cast. The winner started as one of 153 different designs.