Page 96 - CityofHaltomFY23Budget

CITY OF HALTOM CITY ANNUAL BUDGET, FY2023 DEBT Service Fund

Legal Debt Limit for General Obligation Debt

All taxable property within the City is subject to the assessment, levy and collection by the City
of a continuing, direct annual ad valorem tax sufficient to provide for the payment of principal and
interest on City issued General Obligation Bonds. Article XI, Section 5, of the Texas Constitution is
applicable to the City, and limits the maximum ad valorem tax rate to $2.50 per $100 of assessed
valuation (for all City purposes). Self-supporting debt that will be repaid by revenues generated
through the ongoing activities of enterprise funds or other non-governmental funds are not subject
to a legal debt limit. Limits for self- supporting debt are instead set by the ability of the issuing entity
to pay, charter limitations, profit and loss considerations or other governing body limitations.

The City limits the total annual tax-supported debt service to no more than 25% of total spending.
The adopted debt service budget of $9,327,252 includes $7,480,549 of debt supported by property
taxes, $1,846,703 is supported by the Water & Sewer revenues, and $275,466 is supported by
Drainage Fund revenues. The property tax supported debt is the equivalent to 18.7% of total
expenditures. For FY2023, the debt services portion of the tax rate is at $0.231735.

The chart below displays the relationship of the City’s adopted total tax rate of $0.608162 in relation
to the legal limit of $2.50. The City’s current tax rate is 24.3% of the legal limit.

Tax Rate Current Available
Limit Tax Rate Tax Rate
$2.50 $0.608162 $1.89838