Page 289 - FY 2021-22 ADOPTED BUDGET

DEBT SERVICE

The City of Benbrook Debt Service Fund was created by Ordinance 404, which was adopted August 25, 1975.

The ordinance authorizes a tax to be levied on all real and personal property with the proceeds from said tax
used to retire the principal and interest on all general purpose indebtedness. The Debt Service Fund accounts
for the accumulation of resources, and the payment of general long-term principal and interest.

As of October 1, 2021, the City of Benbrook has debt issues outstanding for a total Debt Service Fund balance of
$22,695,000 in general obligation and refunding bonds. Of that amount $20,920,000 is new debt issued at the end
of FY 2020-21.

The City of Benbrook maintains its bond rating by Standard & Poor’s. Standard & Poor’s recently upgraded the
City's bond rating to AA+ based on the City's outstanding general obligation debt. The rating upgrade was based
on the City's strong liquidity, consistently well-managed financial operations, and strong economy.

The City's Operating Fund's 2021-22 projected ending balance of $11,909,941 is 51.2 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. Annual debt service
expenditures claim only 8.2 percent of expenditures in 2021-22; 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.

In September 2021 the City issued $22,000,000 in General Obligation Bonds for the construction of a new municipal
complex. The municipal complex will house City administration, Police Department, and Senior Center. The existing

buildings will be demolished, and one new building built in place of the other buildings. The municipal complex will
serve as an anchor to a new downtown. Construction is to begin in FY 2021-22.

In February 2004, voters approved 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 lower than anticipated; the City Council
approved purchasing the property with General Fund reserves in 2003-04.

The City’s bond counsel advised the City to re-finance existing debt (general obligation bonds) in order to reduce
future interest payments. The re-financing of this existing debt was also approved by Council in 2004-05. General
obligation bonds were re-financed in 2011. After the 2013-14 Budget was adopted, the City’s bond counsel
recommended refinancing general obligation bonds issued in 2005; these general obligation bonds were refinanced
in November 2013.

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