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 (Utility) debt. The City's combined debt totals $64,181,835. This is a reduction of $9,638,300 from the prior year's total debt.

Of the total debt, $51,070,000 is tax supported and accounted for in the General Debt Service Fund, and $5,312,631 is utility revenue supported and accounted for in the Utility Debt Service Fund.

Combined Debt Schedule
Fiscal YearPrincipal DueInterest DueTotal Principal & Interest
20194,870,0002,035,5136,905,513
20205,040,0001,866,8666,906,866
20214,960,0001,687,9996,647,999
20225,140,0001,507,7996,647,999
20235,340,0001,314,4846,654,484
20244,455,0001,122,0135,557,013
20254,345,000957,2695,302,269
20264,075,000797,1004,872,100
20273,625,000636,8374,261,837
20281,890,000530,2502,420,250
20291,955,000458,7752,413,775
20302,040,000383,4942,423,494
20312,115,000302,9222,417,922
20323,345,000228,1253,573,125
20331,515,00086,0191,601,019
2034515,00019,178534,178
2035160,0007,350167,350
2036165,0002,475167,472
Total55,550,00013,944,46669,494,466
Total Debt Bar Graph 2019

General & Utility Debt by Series

Of the total debt, $64,181,000 is tax supported and accounted for in the General Debt Service Fund and $4,480,000 is utility revenue supported and accounted for in the Utility Debt Service Fund.

SeriesSourcePrincipalInterestTotal
2008 General Obligation BondsTax Supported7,100,0003,216,45010,316,450
2011 General Obligation Refunding (2000B and 2003)Tax Supported2,295,0001,316,1063,611,106
2011 Combo Certificates of ObligationTax Supported2,940,000832,1413,772,141
2012 General Obligation RefundingTax Supported1,065,00039,1541,104,154
2012 Certificates of ObligationTax Supported785,000154,775939,775
2014 Certificates of ObligationTax Supported4,435,0001,320,0445,755,044
2014 Certificates of Obligations Refunding (2005A)Tax Supported
1,560,000
136,781
1,696,781
2015 General Obligation Refunding (2007 GO)
Tax Supported
8,585,000
2,247,213
10,832,213
2016 General Obligation Refunding (2007 GO)
Tax Supported
6,750,000
490,125
7,240,125
2016 Certificates of Obligation
Tax Supported
2,310,000
624,997
2,934,997
2017 Subordinate Lien Pass-Through Toll Revenue and Limited Tax Refunding
Tax Supported
11,465,000
2,574,850
14,039,850
2017 Tax Notes
Tax Supported
1,780,000
159,200
1,939,200
Total Tax Supported
51,070,000
13,111,835
64,181,835
2011A General Obligation Refunding (2000B & 2003)
Utility Revenue Supported
395,000
21,581
416,581
2011 Combo Certificates of Obligation
Utility Revenue Supported
2,170,000
615,306
2,785,306
2014 General Obligation Refunding (2005A)
Utility Revenue Supported
940,000
82,762
1,022,762
2014 General Obligation Refunding (2005B)
Utility Revenue Supported
975,000
112,981
1,087,981
Total Utility Revenue Supported
4,480,000
832,631
5,312,631
Total City Debt
55,550,000
13,944,466
69,494,466

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.

Texas Department of Transportation Payment

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.

Other Payments & Information

To date, the 2014 Certificate of Obligation has not impacted the debt service tax rate. These payments have been made from fund balance in the General Debt Service Fund. The 2017 Tax Notes were issued to purchase new fire equipment and payments on this issue will also be paid from the 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 and is restricted to use on debt payments.

Total Tax Supported Debt
Fiscal YearPrincipal DueInterest DueTotal Principal & Interest
20194,300,0001,889,5946,189,594
20204,450,0001,737,8916,187,891
20214,555,0001,578,3246,133,324
20224,725,0001,410,8616,135,861
20234,900,0001,230,8946,130,878
20244,000,0001,052,8945,052,894
20253,880,000903,4134,783,413
20263,905,000754,4384,659,438
20273,445,000601,1754,046,175
20281,705,000501,8882,206,888
20291,760,000438,0132,198,013
20301,840,000370,7312,210,731
20311,905,000298,5912,203,591
20323,345,000228,1253,573,125
20331,515,00086,0191,601,019
2034515,00019,178534,178
2035160,0007,350167,350
2036165,0002,475167,475
Total 51,070,00013,111,83564,181,835
Tax Supported Debt Bar Graph 2019

Tax-Supported Debt Per Capita

Debt Service per capita is calculated using the Forney Economic Development Corporation population estimate for 2017 of 19,122. 

Bond SeriesTotal Principal & InterestDebt Per Capita
2008 General Obligation Bonds10,316,450507
2011 General Obligation Bonds3,611,106178
2011 Certificates of Obligation3,772,141185
2012 General Obligation Refunding1,104,15454
2012 Certificates of Obligation939,77546
2014 General Obligation Refunding1,696,78183
2014 Certificates of Obligation5,755,044283
2015 General Obligation Refunding10,832,213533
2016 Certificates of Obligation2,934,997144
2016 General Obligation Refunding7,240,125356
2017 Subordinate Lien Pass-Through Toll Revenue and Limited Tax Refunding14,039,850690
2017 Tax Notes1,939,20095
Total Tax-Supported Debt per Capita 64,181,835$3,156
Remaining TxDOT Pass-Through Payments to the City (16,939,917)(833)



Total Per Capita Debt adjusted for Pass-Through Program $47,241,918$2,323


Click on the tabs to see detailed payment schedules for all general bond series. 

  1. 2008 GO Bonds
  2. 2011 Combo CO
  3. 2012 CO
  4. 2014 CO
  5. 2016 CO
  6. 2017 Tax Notes

2008 General Obligation Bonds

Original Issue Amount: $39,605,000

Original Date of Issue: July 15, 2008

Maturity Date: August 15, 2033


Use of Bond Proceeds

Proceeds from the sale of the Bonds will be used to (i) provide funds for the design, development, construction, extension, expansion and/or improvement of certain state highway facilities and roadways located within the City and as more specifically described in the {Pass Through} Agreement, (ii) pay interest on the Bonds for the period authorized by State law, and (iii) pay the costs of issuance on the Bonds...

Initial Design of Three Pass-Through Toll Projects

Total Project Cost: $9,598,084
2008 Bond Allocation: $8,687,712
Completion Date: March 2013

FM 548 at US Highway 80 Roadway Reconstruction & Widening

Total Project Cost: $14,818,921
2008 Bond Allocation: $8,867,416
Completion Date: October 2015

FM 740 Roadway Reconstruction & Widening

Total Project Cost: $7,084,333
2008 Bond Allocation: $4,889,896
Completion Date: May 2016

FM 741 Roadway Reconstruction & Widening

Total Project Cost: $13,604,976
2008 Bond Allocation: $13,604,976
Completion Date: October 2015

Bond Interest

Recognizing that there would be a gap between the time where bond payments became due and the time that the Texas Department of Transportation (TxDOT) began making the Pass-Through Reimbursements, $3,239,848 of the bond issue was used to decrease the annual Series 2008 Bond Payments from Fiscal Year 2009 to Fiscal Year 2012. This reduced the impact on the debt service tax rate over three years.

Bond Issuance Costs

Total Cost: $315,153

All of the proceeds from the 2008 General Obligation Bonds have been spent.


Pass-Through Toll Program: Early Redemption

The Pass-Through Toll Program is an agreement between the City and the TxDOT. 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 maintenance of the roadways was returned to the state and TxDOT began to reimburse the City annually.

TxDOT began making annual payments to the City in Fiscal Year 2013. This repayment is structured with a minimum annual payment and an additional accelerated portion (the 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. As of October 2017, the City has redeemed an additional $9,184,493 resulting in $5,884,388 in interest savings. 

Early Redemption Payment History & Interest Savings
Fiscal YearPass Through Reimbursement AmountAmount Applied to the annual 2008 Bond PaymentsRemaining Available for Early RedemptionEarly RedemptionInterest Savings
20133,606,3732,009,5701,596,8031,590,0001,359,450
20143,685,9342,009,5701,676,3641,675,0001,281,313
20153,901,7562,009,5701,892,1861,890,0001,260,175
20164,019,1402,009,5702,009,5701,955,0001,088,700
20174,019,1402,009,5702,009,5701,989,475894,750
2018
4,019,140
2,009,570
2,009,570
2,005,000
631,575

23,251,48312,057,42011,194,06311,025,0006,515,963


Refunding

The following amounts have been refunded from the 2008 General Obligation Bonds:

2011 General Obligation Refunding

Principal Amount Refunded: $1,200,000
Interest Savings: $94,825

2017 Subordinate Lien Pass-Through Toll Revenue & Limited Tax Refunding

Principal Amount Refunded: $11,465,000
Interest Savings:$1,200,000

Series 2008 Payment Schedule

Fiscal Year

Principal Due

Interest Due

Total Principal & Payment

2019-344,925344,925
2020-344,925344,925
2021-344,925344,925
2022-344,925344,925
20231,040,000344,9251,384,925
2024885,000290,3251,175,325
2025990,000243,8631,233,863
2026910,000199,3131,109,313
2027600,000158,363758,636
2028160,000126,863286,863
2029170,000119,463289,463
2030185,000111,388296,388
2031240,000102,600342,600
2032900,00091,200991,200
20331,020,00048,4501,068,450

Total

7,100,000

3,216,4503

10,316,450

  1. 2011 GO Refunding
  2. 2012 GO Refunding
  3. 2014 GO Refunding
  4. 2015 GO Refunding
  5. 2016 GO Refunding
  6. 2017 Refunding

2011 GENERAL OBLIGATION REFUNDING

Original Issue Amount: $2,295,000
Original Date of Issue: August 2, 2011
Maturity Date: August 15, 2032 

Interest savings from this refunding will be $114,573.

USE OF BOND PROCEEDS

"Proceeds from the sale of the Tax-Exempt Bonds will be used (i) to refund a portion of the City's outstanding tax-exempt debt ...as described on Schedule 1 {in the Official Statement} for restructuring purposes ... and (ii) to pay the costs of issuance associated with the sale of the Tax-Exempt Bonds.."

Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2005A

Principal Amount Refunded: $20,000
Interest Savings: $410
Proceeds from the 2005A Certificates of Obligation funded:
- East Side Drainage Project

General Obligation Bonds, Series 2007

Principal Amount Refunded: $910,000
Interest Savings: $19,338 

Pass Through Toll Revenue and Limited Tax Bonds, Series 2008

Principal Amount Refunded: $1,200,000
Interest Savings: $94,825

Bond Issuance Costs

Total Cost: $165,000 

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

2011 General Obligation Refunding Payment Schedule

Fiscal Year

Principal Due

Interest Due

Total Principal & Payment

2019-96,80696,806
2020-96,80696,806
2021-96,80696,806
2022-96,80696,806
2023-96,80696,806
2024-96,80696,806
2025-96,80696,806
2026-96,80696,806
2027-96,80696,806
202895,00096,806191,806
202995,00093,006188,006
2030100,00089,206189,206
2031105,00085,081190,081
20321,900,00080,7501,980,750

Total

2,295,000

1,316,106

3,611,106