Debt Service

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 2014, the total outstanding debt supported from ad valorem taxes was $5,195,000.   Principal payments will reduce the outstanding bond indebtedness by $430,000 during the year.   All current outstanding debt will be paid by the year 2028.  Statutes of the State of Texas limit the maximum amount of ad valorem tax that can be levied by a home rule city to no more than $2.50 per $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 2014, the total outstanding debt supported from water/sewer revenues is $110,000.  Scheduled principal payments for the current fiscal year will decrease the principal by $110,000.  All current outstanding debt will be paid by the year 2014.