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City of Mansfield Annual Budget and Service Program Fiscal Year 2025-2026 Table of Contents

Affordability of Additional Debt and Legal Debt Limit

In Fiscal Year 2000, the City of Mansfield developed a 10-year Strategic Plan that anticipates the financial future of the City
of Mansfield, Texas. This plan is a comprehensive planning model that enables Management to assess the financial well-
being of the City. It quantifies the impact of growth and development and speaks plainly about the fiscal condition of the
City. This Strategic Plan incorporates future revenue sources, operating expenses and projected capital improvement
projects for all of the City’s activities: Governmental Funds and Enterprise Funds. This Strategic Plan measures the City’s
ability to authorize and issue additional debt over the next ten years. Each year, the plan is revised to reflect growth,
population estimates and current operating revenues.

The City shall use an objective, analytical approach to determine whether it can afford to incur new debt beyond
what it retires each year. This process shall compare generally accepted standards of affordability to the current
values for the City.

General Obligation Bonds:

Debt per capita
Debt as a percentage of taxable value
Debt service as a percentage of current revenues and current expenditures
Debt tax rate as a percent of the City’s tax rate

Revenue Bonds:
Pledged revenues shall be a minimum of 110% of annual debt service
Pledged revenues shall be a minimum of 125% of average annual debt service
Pledged revenues shall be 130% of maximum annual debt service for financial planning purposes
Annual adjustments to the City’s rate structures will be made as necessary to maintain a 130% coverage factor

The City Charter of the City of Mansfield, Texas and the statutes of the State of Texas do not prescribe a legal debt
limit. However, Article XI, Section 5 of the Texas Constitution, applicable to cities of more than 5,000 populations, limit
the ad valorem tax rate to $2.50 per $100 of assessed valuation. The City operates under a Home Rule Charter that
also imposes a limit of $2.50 per $100 of assessed valuation. The FY 2025-2026 budgeted property tax rate is
$0.639000 per $100 valuation with a tax margin of $1.861 per $100 valuation based upon the maximum ad valorem
tax rate noted above. Additional revenues up to $193,485,616 per year could be raised before reaching the maximum
allowable tax base.

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