General Obligation (GO) Bonds
City of Irving issues GO Bonds to finance major capital purchases; most often to improve or expand city facilities and infrastructure. The city’s financial policies regarding the use of debt are located in the Budget Overview section on pages 41 to 45 of the Budget Book. The city issues several different types of debt. Each type is issued for a specific purpose and is funded by one or more specific revenue streams over the term of the debt obligations.
GO Bonds are backed by the “full faith and credit” of the City of Irving, meaning any revenue source can be used to pay the debt. In practice, principal and interest payments are funded by a tax assessment on the valuation of each commercial, residential and business personal property account within the city.
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.
Total Outstanding Debt Obligation as of 9/30/20: All General Obligation and Revenues Bonds outstanding expressed as total and per capita amounts as of end of the fiscal year.
Total Lease Purchase Obligation as of 9/30/20: Capital leases principal and interest outstanding as of end of the fiscal year.
Total Outstanding Direct Debt for the last 5 years: Total outstanding tax-supported and revenue-supported debt.
Historical Bond Election Information: Included are the election date, purpose, amount and voting results.
Debt Transparency Pledge: The City’s pledge to post details on the website information about proposed bond and debt information no later than one business day after the public notice of the bond election.
Debt Section of Budget: Documents include debt service information for current and previous fiscal years.
HB 1378: Debt Obligation Reporting under Local Government Code Section 140.008
The 84th Legislature passed HB 1378 to increase the transparency of local government debt. Under Local Government Code Sec. 140.008, political subdivisions, including counties, cities, school districts, junior college districts, special purpose districts, and other subdivisions of state government must annually compile their debt obligation data from the preceding fiscal year.
Bond Authorization Balance Information as of 9/30/20: Authorized debt, issued and unissued amounts.
Summary Debt Information as of 9/30/20: Total of tax-support debt, revenue-supported debt and lease obligations.
Local Government Debt Reporting as of 9/30/20: Outstanding direct debt obligations, tax and revenue supported. Includes purpose, credit rating, outstanding principal amount, debt service, and spent and unspent proceeds issue-by-issue.
Bond Review Board Local Government Debt Data - Local government debt data
City of Irving Bond Election Information - On May 1, 2021 Irving voters will decide if the city should issue $563.4 million for Capital Improvement Projects