Page 348 - N. Richland Hills General Budget

DEBT SERVICE FUNDS

OVERVIEW OF DEBT SERVICE FUNDS

General Debt Service – General Debt Service is used for the accumulation of resources for payment of general
long-term debt principal and interest. Resources include an applicable portion of the ad valorem tax levy and
related interest income usable from debt service. Funding of the Debt Service Fund is made on a conservative
basis of estimating the collectable portion of the tax levy. From this collectable portion, an allocation of available
funds is made between General Fund operating revenue and the Debt Service Fund. Requirements for debt
service are based on the amount of outstanding general obligation debt and related debt service costs. The debt
service requirements are predictable; because once a bond sale is closed, the requirements can only be altered
by a bond sale for new money or a refunding of old issues. Bonds are primarily sold to fund Capital Improvement
Program projects and to refund existing debt.

Utility – The Utility Fund makes payments for the principal and interest of scheduled debt service associated with
Utility System improvements and refunding bonds. Debt service payments are made semi-annually. The debt
service is paid from current revenues of the Utility System.

Park Fund Debt Service – The Park and Recreation Facilities Development Debt Service Fund is used to make
principal and interest payments on debt issued for the Park and Recreation Facilities Development Fund. These
debt issues are solely dedicated for park and recreational purposes including the construction of a tennis center,
family Aquatic Park, design and construction of hike and bike trails, and general improvements to neighborhood
parks.

Golf – The Golf Course Fund makes payments for the principal and interest of scheduled debt service associated
with Golf Course improvements and refunding bonds. The source of revenue for Golf Course debt service is
current revenues of the Golf Course.

Tax Increment Financing (TIF) Debt Service – The TIF #2 Debt Service Funds are used to make principal and
interest payments on debt issued for infrastructure and other capital improvements made within the City’s tax
increment zone and refunding bonds. The primary source of revenue for TIF debt service is property tax
generated by holdings within the TIF districts.

Aquatic Park Fund Debt Service – The Aquatic Park Fund makes payments for the principal and interest of
scheduled debt service associated with Aquatic Park improvements. Debt service consists of principal and
interest on outstanding bond issues. The source of revenue for Aquatic Park debt service is current revenues of
the Aquatic Park.

Both Drainage Utility and Internal Service debt are included with General Debt Service.

Drainage Utility – The Drainage Utility Fund makes payments for the principal and interest of scheduled debt
service associated with citywide drainage improvements. The primary source of revenue for the Drainage Utility
Fund is drainage fees charged to improved property, which may or may not be a part of the wastewater system
such as a septic system.

Internal Service – The Equipment Services and Building Services Funds make payments for the principal and
interest of scheduled debt service associated with building improvements and capital equipment purchases and
refunding bonds. The primary source of revenue for these funds is user fees charged back to all other City
departments utilizing services.

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