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General Debt Service
All taxable property within the City is subject to the assessment, levy, and collection by the City of a continuing, direct annual ad valorem tax that is sufficient to provide for the payment of principal and of interest on all ad valorem tax debt within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the city, and provides for a maximum ad valorem tax rate of $2.50 per $100 taxable assessed valuation for all City purposes. The Home Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 taxable assessed valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate for all general obligation debt service, as calculated at the time of issuance and based on a 90% collection rate.
Allowable debt levy per $100 valuation
Levy for Debt Service
Percentage of allowable debt levy used $1.500000
$0.123316
8.22%
The primary source of revenue for the General Debt Service Fund is the ad valorem property tax. The proposed ad valorem tax rate of $0.434551 is divided into two rates. Approximately 28% ($0.123316) of the tax revenue is used to pay principal and interest on the City’s outstanding general obligation debt. The remaining 72% ($0.311235) of the revenue generated by the tax rate is used to pay for maintenance and operating costs incurred in the General Fund.
The Debt Service (DS) portion of the tax rate covers the City’s bond payments and other outstanding debt. This portion of the tax rate is not flexible and is set by a calculation based on the required fiscal year payments of the City’s debt. Fiscal Year 2023 debt service rate is $0.123316. This is a decrease of $0.02174 (-14.99%) from the Fiscal Year 2022 rate, resulting in $3,636,394 in revenue to be used for debt payments.
The Debt Service tax rate is calculated by subtracting any revenue paid from other sources from the annual required debt payment and then dividing that result by the adjusted taxable value and multiplying by 100.
DEBT SERVICE TAX RATE
0.227874
0.193875
0.160509 0.145054
0.123316
FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
(Total annual debt payment) – (Non-tax revenue) ÷ (Adjusted Taxable Value) x 100 = Debt Service Tax Rate ((4,824,007 – 1,187,613) ÷ 2,948,838,063) x 100 = $0.123316
PASS THROUGH TOLL AGREEMENT
In addition to revenue from the debt service portion of the tax rate, the city receives an annual payment from the Texas Department of Transportation (TxDOT) as part of a Pass Through Tolling agreement. With this agreement, the City sold the 2008 General Obligation Bonds to fund the expansion of three state owned roadways within the city limits and oversaw the construction. Upon completion of the projects, responsibility for the roadways was returned to the state and TxDOT began to reimburse the City annually.
Repayment is structured with a minimum annual payment, with an additional accelerated portion (amount above the guaranteed minimum annual payment) based on traffic counts. The minimum annual payment is $2,009,570. The City Council has deemed any amount above the minimum payment be held as committed fund balance and, if possible, used for early redemption in order to reduce future interest payments. The city has redeemed an additional $19,040,000 resulting in $9,327,801in interest savings. Combined with general obligation refunding and increasing property values, this early redemption process has helped to decrease the debt service tax rate by $0.14 in the last five fiscal years. The 2017 Tax Notes were issued to purchase fire equipment with the understanding that payments would be made from the debt service fund balance. This fund balance is the result of interest collected in the fund, as well as delinquent and penalty taxes that have accumulated over prior years. These funds are restricted and can only be used for debt payments.
GENERAL DEBT SERVICE FUND STATEMENT
The ten current outstanding tax supported debt issues as of Fiscal Year 2023 total $30,289,320 with $26,605,000 in remaining principal payments and $3,684,320 in interest.
2012 General Obligation Refunding
Interest savings from this refunding will be $448,695. Original Issue Amount: $2,235,000 Original Issue Date: November 6, 2012 Maturity Date: February 15, 2023
Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used to refund a portion of the City's outstanding debt ...and to pay the costs of issuance associated with the issuance of the Bonds."
Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2000B Principal Amount Refunded: $350,000 Interest Savings: $63,937 Proceeds from the 2000B Certificates of Obligation funded: - A partial widening of Pinson Road (FM740) - A portion of the Central Fire Station Expansion
Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2003 Principal Amount Refunded: $1,830,000 Interest Savings: $384,759 Proceeds from the 2003 Certificates of Obligation funded: - Mulberry Park: Extend Forney Middle School Parking Lot - Mulberry Park: ADA Concessions & Restroom at the Baseball Complex - Mulberry Park: Restrict Access to Parking via Fence - Mulberry Park: City Maintenance Building - Mulberry Park: Remove Old Concession and metal buildings - Henderson Park: Irrigate Soccer Complex - Henderson Park: Dirt work - Mulberry Park: Regrade Baseball Fields - Eastside Park: Replace Play Structure - Mulberry Park: Extend Parking lot at Johnson Elementary & Baseball Complex - Eastside Park: Install Crushed Granite for Shaded Areas - Mulberry Park: Upgrade Restroom & Concession Facility at the Softball Complex - Hamblen Park: Install Linear fence and stone park sign - FISD: Install Practice Fields at 3 Elementary Schools - FISD: Install Practice Fields at Forney High School - Forney Community Park Design
Bond Issuance Total Cost: $55,000
All proceeds from the 2012 General Obligation Refunding have been spent.
2012 Certificates of Obligation
Original Issue Amount: $1,030,000 Original Date of Issue: November 6, 2012 Maturity Date: February 15, 2032
Use of Bond Proceeds "Proceeds from the sale of the Certificates will be used for the purpose of paying contractual obligations incurred for (i) the acquisition of Mulberry Park: and (ii) paying legal, fiscal and engineering fees in connection with such project."
Mulberry Park Purchase Total Project Cost: $1,030,000 2007 Bond Allocation: $1,030,000 Completion Date: March 2013
All proceeds from the 2012 Certificates of Obligation have been spent.
2014 General Obligation Refunding
be $213,278. Original Issue Tax Supported Amount: $2,148,109 ($3,440,000 total issue) Original Date of Issue: November 4, 2014 Maturity Date: February 15, 2025
Interest savings from this refunding will
Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund a portion of the City's outstanding debt (the Refunded Obligations) as described on Schedule I [in the Official Statement} and (ii) to pay the costs of issuance associated with the sale of the Bonds... "
Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2005A Principal Amount Refunded: $2,148,109 Interest Savings: $213,278 Proceeds from the 2005A Certificates of Obligation funded: - Eastside Drainage Project
All proceeds from the 2014 General Obligation Refunding have been spent.
2014 Certificates of Obligation
Original Issue Amount: $4,945,000 Original Date of Issue: November 4, 2014 Maturity Date: February 15, 2034
Use of Bond Proceeds "Proceeds from the sale of the Certificates will be used for (i) the construction of public works, to wit: (a) constructing and equipping a new fire station and (b) constructing and equipping a new animal shelter, and (2) cost of issuance associated with the sale of the Certificates."
Certificates of Obligation have been spent. Fire Station #2 Total Project Cost (Budget): $4,102,209 2014 Certificate of Obligation Allocation: $3,013,994 Estimated Project Completion Date: February 2017
Animal Shelter Total Project Cost: $2,138,899 2014 Certificate of Obligation Allocation: $2,000,000 Estimated Project Completion Date: April 2017
All proceeds from the 2014
To date, the 2014 Certificate of Obligation have not impacted the debt service tax rate. These payments have been made from fund balance in the General Debt Service Fund. This fund balance is the result of interest collected in the fund, as well as delinquent and penalty taxes that have accumulated over prior years and is restricted to use on debt payments
2015 General Obligation Refunding
Original Issue Amount: $8,585,000 Original Date of Issue: June 1, 2015 Maturity Date: September 30, 2027
Interest savings from this refunding will be $1,230,068.
Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund certain outstanding obligations of the City described on Schedule I {in the Official Statement} ... for debt savings; and (ii) to pay the costs associated with the issuance of the Bonds."
General Obligation Bonds, Series 2007 Principal Amount Refunded: $8,955,000 Interest Savings: $1,230,068
All proceeds from the 2015 General Obligation Refunding have been spent.
2016 Certificates of Obligation
2016 Certificate of Obligation Allocation: $2,500,000 Estimated Project Completion Date: July 2018 Original Issue Amount: $2,500,000 Original Date of Issue: August 2, 2016 Maturity Date: February 15, 2034
Use of Bond Proceeds "Proceeds from the sale of the Certificates will be used for (1) street improvements, including drainage, curbs, gutters, utility line relocation, street lighting, and /or the acquisition of land and rights-of-way therefor, and (2) the cost of issuance associated with the sale of the Certificates."
Redbud Roadway Reconstruction Total Project Cost (Budget): $2,833,079
All proceeds from the 2016 Certificates of Obligation Refunding have been spent.
2016 General Obligation Refunding
Original Issue Amount: $8,220,000 Original Date of Issue: August 2, 2016 Maturity Date: February 15, 2023
Interest savings from this refunding will be $700,088.
Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund a portion of the City's outstanding debt (the Refunded Obligations) as described on Schedule I {in the Official Statement}... and (ii) to pay the costs of issuance associated with the sale of the Bonds..."
General Obligation Bonds, Series 2007 Principal Amount Refunded: $8,475,000 Interest Savings: $700,088
All proceeds from the 2016 General Obligation Refunding have been spent.
Original Issue Amount: $11,465,000 Original Date of Issue: August 15, 2017 Maturity Date: August 15, 2031
Interest savings from this refunding will be $1,228,114.
Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund a portion of the 2008 Bonds (as shown in Schedule I) (the “Refunded Bonds”) and (ii) for payment of professional services of attorneys, financial advisors, and other professionals in connection with the issuance of the Bonds.”
Pass-Through Toll Revenue and Limited Tax Bonds, Series 2008 Principal Amount Refunded: $12,170,000 Interest Savings: $1,228,114
All proceeds from the 2017 Subordinate Lien Pass Through Toll Revenue and Limited Tax Refunding Bonds have been spent.
2017 Tax Notes
Original Issue Amount: $2,055,000 Original Issue Date: August 15, 2017 Maturity Date: February 15, 2024
Use of Proceeds “Proceeds from the sale of the Notes will be used to pay for (i) public safety equipment and (ii) professional services of attorneys, financial advisors and other professionals in connection with the projects and the issuance of the Notes.”
2017 Fire Arial Platform Total Purchase Budget: $1,341,519 2017 Tax Note Allocation: $1,341,519 Estimated Completion Date: December 2018
2017 Fire Engine/Pumper Total Purchase Budget: $727,500 2017 Tax Note Allocation: $713,481 Cost variance is funded from the General Fund. Estimated Completion Date: September 2018
All proceeds from the 2017 Tax Notes have been spent.
2020 General Obligation Refunding
Original Issue Amount: $5,705,000 Original Issue Date: November 19, 2020 Maturity Date: February 15, 2032
Interest savings from this refunding will be $1,061,209.
Use of Bond Proceeds "Proceeds from the sale of the Bonds will be used (i) to refund a portion of the City's outstanding debt (the Refunded Obligations) as described on Schedule I {in the Official Statement}... and (ii) to pay the costs of issuance associated with the sale of the Bonds..."
Tax & Waterworks & Sewer System Rev. CO, Series 2011 (Tax Supported) Principal Amount Refunded: $2,385,000 Interest Savings: $610,053
Tax & Waterworks & Sewer System Rev. CO, Series 2011 (W&S Supported) Principal Amount Refunded: $1,765,000 Interest Savings: $451,156
General Obligation Refunding Bonds, Series 2011 Principal Amount Refunded: $1,380,000 Interest Savings: $185,394
All proceeds from the 2016 General Obligation Refunding have been spent
