Debt Service

The City's Debt Service provides for the payment of principal and interest on outstanding general obligation bonds, and certificates of obligation. Debt financing is used to pay for large capital improvements to and/or construction of the City's street, water and sewer systems; parks and recreational facilities; police and fire protection facilities; and the flood protection and storm drainage systems. 

The City maintains two debt service funds: one for tax supported debt and one for utility revenue supported debt. Tax supported debt is funded from the debt service portion of the property tax rate. Revenue supported debt is funded from other revenue sources, such as utility revenues. 

In order to understand the information presented here, a few key terms need to be defined:

General Obligation Bond (GO Bond) - a municipal bond backed by the credit and taxing power of the issuing jurisdiction rather than the revenue from a given project. GO Bonds are issued with the belief that a municipality will be able to repay its debt obligation through taxation or revenue. The City has a total of $69.6 million in general obligation debt - $66.2 million is tax supported and $3.5 million is revenue supported. 

Certificates of Obligation (CO) - a financing mechanism a city may use to pay a contractual obligation incurred in; (1) a construction contract; (2) the purchase of materials, supplies, equipment, machinery, buildings, land, and rights-of-way for authorized needs and purposes; or (3) the payment of professional services, including services provided by tax appraisers, engineers, architects, attorneys, map makers, auditors, financial advisers, and fiscal agents. The City has a total of $18.3 million in certificates of obligation - $15.1 million is tax supported and $3.2 million is revenue supported. 

Refunding - a process where bonds are issued for the purpose of retiring outstanding bonds in order to restructure debt, reduce finance costs, and/or alter maturities. This is a complicated and detailed process, but in the simplest terms, bond proceeds from a new issue are used to pay off all or a portion of existing debt. Interest savings of $3,446,153 have been recognized since the City began the practice of refunding bonds in Fiscal Year 2011. 

Early Redemption - a process where portions of bond principal are paid off early to reduce interest costs. The City began using early redemption in Fiscal Year 2013 when TxDOT began repayment per the Pass Through Toll Agreement (See 2008 GO Bond detail below). Since 2013, the city has redeemed an additional $7,110,000 in principal that has resulted in $4,989,638 in interest savings. 

Combined interest savings from refunding and early redemption total $8.4 million. 

Credit Rating

Credit ratings are opinions about credit risk. Ratings express an opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time.

The City's credit is reviewed and rated with each bond issue by both Standard & Poor's (S&P) and Moody's Investors Service. 

Standard & Poor's Global Ratings - AA-

S&P issues credit ratings in range from 'AAA' (Extremely strong capacity to meet financial commitments) to 'D' (Payment default on a financial commitment or breach of an imputed promise; bankruptcy petition or similar action taken). A plus (+) or minus (-) can be added to ratings from 'AA' to 'CCC' show relative standing within the major rating categories. 

The City's rating of 'AA-' indicates a very strong capacity to meet financial commitments.

Moody's Investors Service - Aa3

Moody's issues credit ratings in a range from 'Aaa' (Highest Quality, with minimal risk) to 'C' (Typically in default, with little prospect for recovery of principal and interest). Moody's uses numerical modifiers to indicate a rating is on the higher end (1), mid-range (2), or lower end (3) of a rating category.

The City's rating of 'Aa3' indicates the city is viewed to be high quality with very low credit risk. 

Combined debt service


The following information represents combined tax supported (General) and revenue supported (Water Sewer) debt. The City's combined debt totals $88,003,686. This is a reduction of $7,657,207 from the prior year's total debt, and includes the addition of the 2016 Certificates of Obligation totaling $2,500,000 in principal and $748,691 in interest. 

COMBINED DEBT SCHEDULE 
 Fiscal Year  Principal Due  Interest Due  Total Principal & Interest
2017 4,360,000 2,492,096 6,852,096
2018 4,505,000 2,367,299 6,872,299
2019 4,645,000 2,229,449 6,847,449
2020 4,795,000 2,080,193 6,875,193
2021 4,695,000 1,921,430 6,616,430
2022 4,855,000 1,762,105 6,617,105
2023 5,050,000 1,572,578 6,662,578
2024 5,180,000 1,368,594 6,548,594
2025 5,390,000 1,151,200 6,541,200
2026 5,025,000 942,206 5,967,206
2027 4,690,000 733,343 5,423,343
2028 1,950,000 569,031 2,519,031
2029 2,025,000 490,250 2,515,250
2030 2,115,000 406,056 2,521,056
2031 2,200,000 316,147 2,516,147
2032 3,420,000 231,688 3,651,056
2033 1,515,000 86,019 1,601,019
2034 515,000 19,178 534,178
2035 160,000 7,350 167,350
 2036 165,000 2,475 167,475
Total  67,255,000 20,748,686 88,003,686
2017 Combined Debt

General and Water Sewer Debt by Series


Of the total debt, $81,262,690 is tax supported and accounted for in the General Debt Service Fund and $6,740,996 is water sewer revenue supported and accounted for in the Water Sewer Debt Service Fund. 

 Series  Source  Principal  Interest  Total
2008 General Obligation Bonds  Tax Supported  26,270,000  10,272,888 36,542,888
2007 General Obligation Bonds Tax Supported 1,335,000 30,038 1,365,038
2011 General Obligation Refunding (2000B & 2003)  Tax Supported 2,295,000 1,509,719 3,804,719
2011 Combo Certificates of Obligation Tax Supported  3,285,000 1,071,728 4,356,728
2012 General Obligation Refunding Tax Supported 1,535,000 81,074 1,616,074
2012 Certificates of Obligation Tax Supported  870,000 194,125 1,064,125
2014 Certificates of Obligation Tax Supported 4,845,000 1,596,469 6,441,469
2014 General Obligation Refunding (2005A) Tax Supported  1,945,000 230,044 2,175,044
2015 General Obligation Refunding (2007 GO) Tax Supported 8,585,000  2,906,163 11,491,163
2016 General Obligation Refunding (2007 GO) Tax Supported  8,220,000 936,753 9,156,753
2016 Certificates of Obligation Tax Supported 2,500,000 748,691 3,248,691
 Total Tax Supported   61,685,000 19,577,690 81,262,690
2011A General Obligation Refunding (2000B & 2003) WS Revenue Supported 765,000 65,746 830,746
2011 Combo Certificates of Obligation WS Revenue Supported 2,425,000 792,256 3,217,256
2014 General Obligation Refunding (2005A) WS Revenue Supported 1,170,000 138,837 1,308,837
2014 General Obligation Refunding (2005B) WS Revenue Supported 1,210,000 174,156 1,384,156
Total Water Sewer Revenue Supported   5,570,000  1,170,996 6,740,996
 TOTAL CITY DEBT   67,255,000 20,748,686 88,003,686



GENERAL DEBT SERVICE

General Debt Service is primarily supported by the debt service portion of the City's tax rate. This portion of the tax rate is not flexible, and is set by  a calculation based on the required fiscal year payments. 

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. This payment is applied to the 2008 General Obligation Bonds and payment details and further information on the agreement can be found on the "2008 GO Bonds" tab below. 

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. 


 total tax supported debt 

 Fiscal Year  Principal Due  Interest Due  Total Principal & Interest
2017 3,820,000 2,315,362 6,135,362
2018 3,955,000 2,205,668 6,160,668
2019 4,075,000 2,083,530 6,158,530
2020 4,205,000 1,951,218 6,156,218
2021 4,290,000 1,811,755 6,101,755
2022 4,440,000 1,665,168 6,105,168
2023 4,610,000 1,488,971 6,098,971
2024 4,725,000 1,299,475 6,024,475
2025 4,925,000 1,097,344 6,022,344
2026 4,855,000  899,544 5,754,544
2027 4,510,000 697,681 5,207,681
2028 1,765,000 540,669 2,305,669
2029 1,830,000 469,488 2,299,488
2030 1,915,000 393,294 2,308,294
2031 1,990,000 311,816 2,301,816
2032 3,420,000 231,688 3,651,688
2033 1,515,000 86,019 1,601,019
2034 515,000 19,178 534,178
2035 160,000 7,350 167,350
2036 165,000 2,475 167,475
Total 61,685,000 19,577,690 81,262,690

Tax Supported 2017

Tax Supported Debt Per Capita

Debt Service per capita is calculated using the 2015 US Census Estimate of 18,418. 

Bond Series  Total Principal & Interest Debt Per Capita
2008 General Obligation Bonds 36,542,888 1,984
2007 General Obligation Bonds 1,365,038 74
2011 General Obligation Refunding (2000B & 2003) 3,804,719 207
2011 Combo Certificates of Obligation 4,356,728 237
2012 General Obligation Refunding 1,616,074 88
2012 Certificates of Obligation 1,064,125 58
2014 Certificates of Obligation 6,441,469 350
2015 General Obligation Refunding (2005A) 2,175,044 118
2016 General Obligation Refunding (2007 GO) 11,491,163 624
2016 Certificates of Obligation 3,248,691 176
 Total Tax Supported Debt per Capita 81,262,690 $4,412
     
Remaining TxDOT Pass Through Payments 25,978,203  1,356
 2008 GO Bonds Adjusted for Pass Through 11,564,685 628
     
 Total Per Capita Debt adjusted for Pass Through Program 56,284,487 $3,056


Click on the tabs below to see detailed payment schedules for all general bond series. 
  1. 2007 GO Bonds
  2. 2008 GO Bonds
  3. 2011 GO Refunding
  4. 2011 COMBO CO
  5. 2012 GO REFUNDING
  6. 2012 CO
  7. 2014 GO Refunding
  8. 2014 CO
  9. 2015 GO Refunding
  10. 2016 CO
  11. 2016 GO Refunding

2007 General Obligation Bonds

Original Issue Amount: $26,305,000
Original Date of Issue: August 15, 2007
Maturity Date: February 15, 2027

Use of Bond Proceeds

"Proceeds from the sale of the Bonds will be used for (i) acquiring, constructing, improving, and equipping a law enforcement facility; (ii) acquiring, constructing, improving, and equipping park and recreational facilities; and (iii) paying the costs of issuance associated with the sale of Bonds." 

Mulberry Park Lighting
Total Project Cost: $738,536
 2007 Bond Allocation: $738,536
Completion Date: August 2007

The Forney Justice Center
Total Project Cost: $12,893,443
2007 Bond Allocation: $11,977,564
Completion Date: August 2010

Forney Community Park, Phase 1
Total Project Cost: $15,102,232
2007 Bond Allocation: $12,815,541
Completion Date: July 2010

Mick Spellman Amphitheater at Forney Community Park
Total Project Cost: $2,684,675
2007 Bond Allocation: $773,359
Completion Date: May 2012

All of the proceeds from the 2007 General Obligation Bonds have been spent. 

Refunding


The following amounts have been refunded from the 2007 General Obligation Bonds:

2011 General Obligation Refunding
Principal Amount Refunded: $910,000
Interest Savings: $19,338

2015 General Obligation Refunding
Principal Amount Refunded: $8,955,000
Interest Savings: $1,230,068

2016 General Obligation Refunding
Principal Amount Refunded: $8,475,000
Interest Savings: $700,088

Refunding of the 2007 General Obligation Bonds will result in $1,949,494 in interest savings.

SERIES 2007 PAYMENT SCHEDULE

 Fiscal Year  Principal Due  Interest Due  Total Principal & Interest
2017 1,335,000 30,038 1,365,038
 Total 1,335,000 30,038 1,365,038

Water Sewer Debt Service


Water Sewer debt is supported by utility revenues, and water and sewer impact fees.  

Combined Water Sewer Debt Schedule
 Fiscal Year  Principal Due  Interest Due  Total Interest & Penalty
2017 540,000 176,734 716,734
2018 550,000 161,631 711,631
2019 570,000 145,919 715,919
2020 590,000 128,975 718,975
2021 405,000 109,675 514,675
2022 415,000 96,937 511,938
2023 440,000 83,606 523,606
2024 455,000 69,119 524,119
2025 465,000 53,856 518.856
2026 170,000 42,662 212,662
2027 180,000 35,662 215,662
2028 185,000 28,363 213,363
2029 195,000 20,763 215,763
2030 200,000 12,763 212,763
2031 210,000 4,331 214,331
Total 5,570,000 1,1170,996 6,740,996

WS Debt Chart
Click on the tabs below to see detailed payment schedules for all water sewer bond series. 
  1. 2011A GO refunding
  2. 2011 combo CO
  3. 2014 GO Refunding
  4. 2014A GO Refunding

2011A General obligation refunding, taxable series

Original Issue Amount: $1,635,000
Original Date of Issue: August 2, 2011
Maturity Date: February 15, 2031

Interest savings from this refunding will be $409,217.


USE OF BOND PROCEEDS

"Proceeds from the sale of the Taxable Bonds are expected to be used to (i) refund the Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Taxable Series 2000A as described on Schedule II {In the Official Statement} ... for debt savings; and (ii) pay the costs associated with the issuance of the taxable bonds."


Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2000A
Principal Amount Refunded: $1,535,000
Interest Savings: $409,217

All of the proceeds from the 2011A General Obligation Refunding have been spent. 


 SERIES 2011A GENERAL OBLIGATION REFUNDING PAYMENT SCHEDULE

 Fiscal Year  Principal  Interest  Total Principal & Interest
2017 185,000 24,534 209,534
2018 185,000 19,631 204,631
2019 195,000 14,081 209,081
2020 200,000 7,500 207,500
Total 765,000 65,746 830,746