Page 309 - City of Westlake FY20 Budget

Section 7 Debt Service Funds
Debt Service Fund 301 Overview

Required by Texas law, the Debt Service Fund (Property Tax) is used to manage payments related to the
Interest and Sinking (I&S) component of the ad valorem (property) tax rate.

In most Texas municipalities, the Interest & Sinking levy funds the majority of annual debt service
payments. The Town has separated the Debt Service Fund into two separate funds to more clearly denote
the debt being paid with ad valorem tax which is a small portion of the Town’s total debt. In prior years,
this Debt Service Fund was used primarily to manage debt service payments associated with the various
street projects.

• In FY11/12 this fund absorbed the series 2011 Certificates of Obligation debt payment for the
improvements to street infrastructure. This debt payment was originally in Debt Service Fund 300
and was paid via a transfer in from the 4B Economic Development Fund. The decision was made to
move this payment to Debt Service Fund 301 to be covered by property tax revenues as these
bonds are tax supported.

• In FY17/18 this fund absorbed the series 2013 refunding debt payments (originally series 2008) of
the Westlake Academy Arts and Sciences building. This increased the interest & sinking portion of
the rate by $0.01669. This debt payment was originally in Debt Service Fund 300 and was paid via
a transfer in from the Visitors Association Fund. The decision was made to move this payment to
Debt Service Fund 301 to be covered by property tax revenues as these bonds are tax supported.

• In FY19/20 this fund absorbed a partial amount of series 2013 Year Rate Change
Certificates of Obligation debt payment for the expansion FY15/16 0.01687
construction at Westlake Academy. This increased the FY16/17 0.00813 (0.00874)
interest & sinking portion of the rate by $0.02166. This debt
payment was originally in Debt Service Fund 300 and was paid FY17/18 0.02482 0.01669
via a transfer in from the 4B Economic Development Fund. FY18/19 0.02399 (0.00083)
The decision was made to move this payment to Debt Service FY19/20 0.04565 0.02166
Fund 301 to be covered by property tax revenues as these
bonds are tax supported.

Revenues and Other Sources
Property Tax revenues are budgeted to be $666,221:
This amount represents a 122% increase of $366,791 from prior year estimated.
• Due to additional property tax supported debt (2013 CO).

Expenditures and Other Uses
Budgeted to be $709,201; a 147% increase of $421,502 from the prior year estimated.
• Principal and interest payments increased $421,502 based on the original payment schedules
for FY 19-20 and the inclusion of 2013 CO noted above.
• Bank Charge services are projected to remain flat at $880

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