Page 16 - Approved Annual Budget FY 2019-2020_Flat

Debt Discussion
The City has an outstanding debt balance of $92M in General Obligation and Combination of Tax and
Revenue Certificate of Obligations. The City also has outstanding certificate of obligations in the amount
of $9.8M for additional funding on the Performing Arts Facility of which will be repaid through the Hotel
Tax revenue.

The City held a Bond election on May 5, 2018 and citizens approved the issuance of Bonds for $25M;
$22M for Drainage improvements and $3M for Traffic improvements.

In addition, the City has $136M outstanding in Revenue Bonds in the Waterworks and Sewer System.
This amount is comprised of different issues and for the undertaking of the upgrade to the South
Wastewater Treatment Plant, installation of Reuse Water Distribution Pipeline along with Pump Stations.
Also, Wastewater collection pipelines are going to be installed to provide services to un-sewered Colonia’s
in the northwest side of the City. Proposed loan funding for FY 2018-2019 will be used for various sewer
projects including improvements to the electrical and SCADA systems at the North Wastewater Treatment
Plant and installation of the Sprague Interceptor Sewer, water projects include sludge dewatering at the
South Water Treatment Plant, a transmission line from Main to Ware to the South Water Treatment
Plant, HCID #1 raw water line and improvements to the South Water Treatment Plant Expansion
Filter/Clarifier. The other Revenue Bonds the City has outstanding are the Airport and Anzalduas bonds
which were used for the Airport Expansion and the construction of the Anzalduas span.
A detail listing of the individual issues are provided in pages 126-127.

Rate Increases
The property tax rate adopted increased to 49.56¢ per $100 valuation due to the recent bond election. All
other charges for services remained at the same level.

Impact of Capital Improvement Projects on Operations & Maintenance Expenditures
As a part of the approval process for capital improvement projects, management considered the impact
on operation and maintenance expenditures. For major projects for which funding was provided through
the issuance of bonds, generally a ten-year financial plan is prepared in conjunction with the presentation
to the credit rating agencies. The more significant improvements included in the Capital Improvement
Fund have been evaluated for their impact, as you will note on pages 143-144. This year such
improvements will have minimal impact in operating and maintenance expenditures in the amount of
$169K in the General Fund. Note also that on other projects undertaken by other funding sources, it will
have an additional impact in operating and maintenance of $135K. Refer to pages 167-183 for those
projects that will have an impact on operating and maintenance.

THE FY 2019-20 BUDGET – AS A WHOLE

Overall Budget Basis of Accounting
The budget basis that the City has adopted by past practice is the modified accrual basis for all
governmental fund types. The accrual basis has been adopted for the proprietary fund types, with some
modifications; principally the inclusion of debt principal payments and capital outlay as expenses and not
making provision for depreciation expense. This budget has been prepared in accordance with this legal
basis of accounting.

2019-2020 Budget Message v