Page 79 - CityofColleyvilleFY23AdoptedBudget

Expenditures in the City's Debt Service Fund are comprised of one non-
callable municipal bond issue as well as four leases for public safety
vehicles. Prior to FY23, the City had been focused on greatly reducing its
debt pro le and no longer relying on bond dollars for capital
improvements. This focus resulted in the calling of outstanding sales tax
bonds in 2021, saving the City over $650,000 in interest payments.
Recently however, the City came across an opportunity that necessitates
debt nancing. Colleyville citizens have long requested that the City
consider building a general recreation center, but the expense of doing so
would likely be in the tens of millions of dollars, if not more. However, one
of Colleyville's houses of worship has decided to vacate their property,
which consists of 15 acres and a 42,000 square foot building previously
used as a church. The cost for purchasing the property as well as up tting
it for recreational purposes is estimated at just over $10 million. This cost
will be nanced through certi cates of obligation issued in December of
FY23 and amortized over a 20-year period. If desired, the City is able to call
these bonds beginning in 2030. The forthcoming payments for these
bonds have been incorporated into the Debt Service Fund's 5-year
forecast. Aside from this new issue, only leases for public safety apparatus
will continue to be expensed out of this fund for the foreseeable future.

LEGAL DEBT MARGIN

Article XI, Section 5 of the State of Texas Constitution states in part:

".... but no tax for any purpose shall ever be lawful for any one year, which
shall exceed two and one-half percent of the taxable property of such city."

Article X, Section 3 of the Charter of the City of Colleyville, Texas states:

The maximum tax rate shall not exceed $1.50 on the one hundred dollars
($100.00) valuation of the taxable property with the City.

The tax rate for Fiscal Year ended September 30, 2023 is $0.265618 per $100
of assessed valuation at 100% of the market value. The City of Colleyville
operates under a Home Rule Charter, which adopts the constitutional
provision.

Calculation of State of Texas Legal Debt Limit

City of Colleyville FY 2022 tax rate $0.265618

Maximum allowable State tax rate $2.50
Debt Service

Fund
Percentage of allowable tax rate used 10.63%

Calculation of Charter Legal Debt Limit

City of Colleyville FY 2021 tax rate $0.265618

Maximum allowable Charter tax rate $1.50

Percentage of allowable tax rate used 17.77%

City of Colleyville | Budget Book 2023 Page 79