Page 66 - Honorable Mayor and Members of the City Council

DEBT SERVICE

OPERATING FUNDS – DEBT SERVICE

As of October 1, 2018, the City of Benbrook has debt issues outstanding for a total Debt Service Fund debt balance of
$4,515,000 in general obligation and refunding bonds. The original amount of debt issued was $23,929,259;
$19,414,259 has been retired in prior years.

The City of Benbrook maintains its bond rating by Moody's Investor Services. Moody's Investor Service upgraded the
City's bond rating to Aa3 based on the City's outstanding general obligation debt. The rating upgrade was based on
the City's moderate tax base growth, consistently well-managed financial operations, and low level of aggressively
retired debt. Moody's stated that Benbrook's conservative budgeting practices and tight expenditure controls continue
to produce well-managed financial operations with satisfactory reserve levels.

In 2012, Standard and Poor’s raised its rating on the City of Benbrook’s general obligation debt one notch from A+ to
AA- based upon the stable economic outlook. Standard and Poor’s began a review of the City’s rating in 2013 and
informed the City that the rating increased from AA- to AA+ based on the City’s superlative financial management.

The City's Operating Fund's 2018-19 projected ending balance of $8,404,938 is 41.37 percent of budgeted operating
expenditures; this level of reserves provides for a more-than-satisfactory financial cushion. This level is in keeping
with City management's goal of maintaining a minimum of three months of operating expenditures in reserve. General
operations are primarily funded from property, franchise, and sales taxes; property taxes and franchise fees have
increased favorably in recent years; sales tax has stabilized. Annual debt service expenditures claim only 4.79 percent
of expenditures in 2018-19; this relatively low percentage reflects the City's above average bond payout schedule. The
City's debt position is characterized by modest debt levels and an above-average rate of bond payout.

The City’s last bond election, held in February 2004, was for the City to obtain voter approval on the sale of bonds to
finance capital improvement projects. The issuance of $2,800,000 in street improvement bonds and the issuance of
$3,215,000 in park improvement bonds were not approved by Benbrook’s voters. Voters did approve the issuance of
$3,700,000 in bonds for drainage projects and $281,250 to acquire a site for building a fire substation in the Whitestone
area of Benbrook. Bonds were sold in May 2004 in the amount of $3,700,000 for drainage projects; the first interest
payment was in September 2005. Bids for the acquisition of land for the fire substation came in at $110,000 - much

CITY OF BENBROOK 2018-19 ANNUAL BUDGET
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