Page 19 - CityofBurlesonFY25AdoptedBudget

on behalf of the 4A Corporation, $29,475,000 was issued on behalf of the 4B Corporation,
$8,475,000 was issued on behalf of the TIF2 Fund, and $644,993 was issued on behalf of the

Hidden Creek Golf Course. The balance of tax supported debt, just over $75,207,379, was issued
for general capital purposes and is repaid from property taxes. Staff anticipates reducing the
fund balance in the Debt Service Fund from the projected FY 2023-2024 year-end amount of
$6,545,650 to $1,090,143 over the next few years. This reduction will enable the city to
implement a short-term financing strategy to fund the purchase of costly apparatus. The city
refinanced 2014 General Obligation Bonds and Certificates of Obligations debt. The refinancing
produced a total savings of $1,071,502, translating to an average annual savings of $107,150 or
6.81% present value savings. The city’s financial policy states that refinancing opportunities will
be considered when present value savings is 3.50% or higher.

In June 2022, the city received a rating upgrade from Moody’s. The city’s debt rating was
upgraded from Aa3 to Aa2 from Moody’s. The city applied for a rating from both Moody’s and
S&P Global in connection with the 2023 debt issuance. At that time, both rating agencies
reaffirmed the Aa2 by Moody’s and AA by S&P Global. They stated the ratings reflects the city’s
consistently strong financial management performance while maintaining a healthy reserve.

Currently, the utility fund holds $59,425,000 in outstanding general obligation and revenue
debt. Of that amount, $2,285,000 is associated with principal from outstanding revenue bonds.
The city has worked closely with its financial advisors, Hilltop Securities, to develop a sound debt

management plan for the utility fund. In the future, the city anticipates annual debt service
increasing steadily.

Appropriations for FY 2024-2025 in the debt service fund will total $20,772,166. This represents
a 140.7% increase from the current year’s budget. The large increase is mostly due to combining
the 4A and 4B corporation’s debt service payments into this one fund for efficiency purposes.
This summer, the city plans to issue 2024 certificates of obligation bonds and 2024 general
obligation bonds which are reflected in the increase of appropriations.

Water and Sewer Fund The water and sewer fund’s principle source of revenues are charges
to customers for water consumption, wastewater collection, and fees related to providing
consumers with new water and wastewater services. Total fund revenues for FY 2024-2025 are
estimated to increase to $29,943,590 (an increase of 8.11%). The continued use of best practices
for the water and sewer utility fund identifies the need for revenue growth to cover existing and
future operations and maintenance costs as well as debt service and contracted water and sewer

costs with the city of Fort Worth.

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