Page 405 - FortWorthFY22AdoptedBudget

B. Assumption of Additional Debt

The City shall not issue more debt than it retires each year without first
conducting an objective analysis as to the City’s ability to assume and
support additional debt service payments. When appropriate, self-
supporting revenue bonds shall be considered before general obligation
bonds. To the extent permitted by State law, commercial paper may be
utilized and/or issued in the City’s tax-supported and revenue-supported
bond programs in order to: (1) provide appropriation authority for
executing contracts on bond-funded projects; (2) provide interim
construction financing; and (3) take advantage of lower interest rates
in the short-term market; all of which provide the City with flexibility in
timing its entry into the long-term fixed rate market.

C. Affordability Targets

1. General Obligation Bonds

The City shall use an objective analytical approach to determine
whether it can afford to issue new general purpose debt (General
Obligation bonds, tax notes, and Certificates of Obligation)
beyond what it retires each year. This process shall take into
consideration any potential impact to the City’s credit ratings, the
growth in the City’s taxable assessed value, and the targeted debt
service tax rate. The process shall also examine the direct costs
and benefits of the proposed expenditures. The decision on whether
or not to issue new debt shall be based on these costs and benefits,
the current conditions of the municipal bond market, and the City's
ability to "afford" new debt as determined by the aforementioned
standards.

2. Revenue Bonds

Revenue bonds are secured solely by the revenues of an operating
fund. As a result, the credit markets look at the type of revenue
securing the payment of debt service on the bonds to determine
the level of security necessary for the purchase of the bonds.

Whether revenue bonds can be secured with gross revenues of
the operating fund or net revenues (i.e., those revenues remaining
after paying costs of operation and maintenance) is often

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