General Government Debt
The General Obligation Interest and Sinking Fund accounts for resources to be used to service the city’s long-term debt. Tax revenue is accumulated to pay principal and interest on bonds sold for various improvement projects, such as street and drainage improvements. The amount of the taxes levied is determined by the County Tax Assessor and approved by the City Council. The function of this fund is to retire bonded indebtedness and pay the interest on the indebtedness. Beginning fiscal year 2019,, the total outstanding debt supported from ad valorem taxes was $3,345,000. Principal payments will reduce the outstanding bond indebtedness by $295,000 during the year. In February of 2017 $3,300,000 of debt was refinanced by the City at a lower interest rate. The refunded date became Series 2017 General Obligation Refunding Bonds in the amount of $3,365,000. All current outstanding debt will be paid by the year 2028. Statues of the State of Texas limit the maximum amount of ad valoren tax that can be levied by a Home Rule City to no more than $100 of assessed valuation.
Water/Sewer Utility Debt
The Water and Sewer System Interest and Sinking Fund accounts for resources to be used to service the water and sewer utility's long-term debt. This fund accumulates revenues from the Water/Sewer Utility Fund to pay principal and interest on bonds sold for various improvements or expansions to the water distribution and sewer collection systems. Beginning fiscal year 2019, the total outstanding debt supported from water/sewer revenues is $3,900,000. Scheduled principal payments for the current fiscal year will decrease the principal by $160,000. In April of 2019 $5,610,000 in new debt was issued in the form of Certificates of Obligation. The purpose of this bond issue was to make improvements to the City's Water and Wastewater System. There will be no principal reductions of this debt during fiscal year 2019. All curent outstanding debt will be paid by the year 2039.