Kelly defends Douglas County reserves, debt decisions at forum

Patrick Kelly faced sharp questions about Douglas County’s cash reserves and borrowing at a Sunday evening candidate forum hosted by the Douglas County Rural Preservation Association. Kelly said the county had more than $100 million in reserve accounts and rainy day funds and used those reserves to build projects with “very minimal debt,” but county records show $55.75 million in debt was issued for the public safety work.

Douglas County finished 2023 with $131.9 million in reserve funds, according to a Moody’s credit report. The report put the county’s available fund balance ratio at 96.6%, far above the 45.7% median for similarly rated local governments, and said the reserve balance was nearly $70 million larger than the median for comparable high-rated governments.

The county’s plan to expand the Judicial and Law Enforcement Center and build a new Public Safety Building was revised in March and April 2025 from a $60 million bond plan to about $55 million in debt and $25 million in cash. County staff said the extra $5 million in cash would save an estimated $1.2 million in interest over the 20-year bond term and cut annual debt service by about $200,000.

That financing plan led to a $55.75 million bond issuance, more than five times larger than the county’s next-largest debt issuance in recent memory. Financial statements back to 2008 showed the largest prior issuance at $10.3 million. Kelly later said he was going to check on his description of the debt as “very minimal.”

Douglas County first received Moody’s AAA rating in November 2020, and county officials said in 2022 that the rating reflected stable financial operations, strong operating reserves and low debt and pension burdens. The county’s 2026 budget set a maximum mill levy of 40.669, though most property owners were still expected to see higher taxes because assessed values rose 5.7%.