Debt Information

The city’s general obligation debt is rated AAA/Aaa, the highest possible credit rating, by both Standard and Poor’s and by Moody’s Investor Services, two nationally recognized bond rating agencies.

Article XI, Section 5 of the State of Texas Constitution states in part: “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 the city.” As a home rule city, the City of Irving is not limited by Texas state law as to the amount of debt it may issue. The city charter limits the property tax rate to $1.50 per $100 valuation. The current tax rate is $.5941 per $100 valuation, which is the same as the prior year’s rate. While the charter tax rate limitation provides virtually no limit to debt issuance, the city works with its financial advisors to update a debt capacity model at least twice each year to determine a sustainable level of municipal debt issuance based on projections of tax values, economic cycles and other municipal revenues.

Water and Sewer Revenue Bonds

Water and Sewer Revenue Bonds are issued to finance capital improvements and expansion of the city’s water and sewer utility. This debt is financed only from the revenues generated from water and sewer system customers and is not backed by the “full faith and credit” of the city. As a result, the bond ratings for water and sewer revenue debt are lower at AA/Aa2, which translate into a slightly higher interest cost for this debt.

Municipal Drainage Utility (MDU) Revenue Bonds

MDU Revenue Bonds are issued to fund the maintenance of the city’s storm water drainage system and is funded by a monthly drainage fee on each parcel of land in the city. MDU Bonds are rated AA+ by Standard and Poor’s.

Solid Waste System (SWS) Revenue Bonds

SWS Revenue Bonds were issued in 2012 to finance the city’s acquisition of land for redevelopment in the Heritage Crossing District. This issue of private placement special revenue debt is considered part of general debt service, but has revenue from the Solid Waste Services system specifically pledged as a repayment funding source. The debt payments must be paid from general operations and maintenance funds, so this debt is tracked separately from other general debt issues.

Hotel Occupancy Tax (HOT) Debt

HOT Revenue Certificate of Obligation Series 2009 was issued to finance the land purchase, design and construction of the Irving Convention Center. The primary revenue source to service this debt is 7 percent of the city's 9 percent Hotel Occupancy Tax, but general tax revenues are also pledged to finance the debt service in the event that HOT revenues are insufficient to meet debt obligations in a given year. As a result of this pledge of General Fund revenues, this debt also carries the highest rating of AAA/Aaa by rating agencies.

Entertainment Venue (EV) Debt

Debt was issued in 2014 to refund the debt issued for the original entertainment venue project in 2011 and provide funds for the design and construction of the Irving Music Factory entertainment venue next to the convention center. This debt is funded by a 2 percent allocation of the city’s 9 percent HOT revenue specifically dedicated to the development of an entertainment venue. The entertainment venue debt is rated as BBB+.

Public Improvement District (PID) Debt

Debt was issued in 2013 and 2014 to finance the construction of public infrastructure for three residential developments in Irving. Tax and Revenue Certificates of Obligation were issued with AAA/Aaa ratings backed by the “full faith and credit” of the city. However, the debt for the districts is self-supporting, with debt service to be paid by incremental growth in property values of a Tax Increment Financing (TIF) district. Growth in property values within the public improvement districts is not projected to generate sufficient revenues to pay the debt service in a given year. A special assessment on all property within the respective PID/TIF districts will be levied to fully fund debt service and administrative requirements each year. Property assessments will not be levied on any property not within the boundaries of the respective public improvement districts.