Colleyville’s Smart Fiscal Planning and Debt Management
With the start of the new budget year, we would like to take a moment to reflect on our approach to debt management in our budget planning process. The City of Colleyville takes a measured, conservative approach to financial management and the financing of capital projects. This method includes careful management of the budget and the creation of a multi-year plan to set aside funds for needed projects which allows the City to pay cash as opposed to issuing debt. “Just like our citizens save-up for big purchases to avoid interest charges from credit cards, the City does the same thing to avoid interest charges from issuing bonds,” explained Assistant City Manager Adrienne Lothery.
The City’s “pay as you go” philosophy is not a new one. All recent debt issuances have been refundings — i.e. refinancing old debt to get a better interest rate. No new tax-supported debt has been issued since 2007.
These efforts to reduce and eliminate debt are bearing significant fruit, and Colleyville is beginning to cross some major finish lines.
• This last year (FY2018) Colleyville completely paid off debt in the Utility Fund. That means that all water and wastewater infrastructure replacement and improvements are paid with cash.
• The Drainage Fund, which accounts for revenues and expenditures related to stormwater management, will have its debt paid off within three fiscal years, specifically in FY2021.
• All General Fund debt will be paid off in 9 years. This means if we continue on this trend, the portion of your City property taxes that go toward paying off debt will be $0 in the not-too-distant future.
The new FY2019 budget that began on Oct.1 included a property tax rate of $0.3208 for every one-hundred dollars of property valuation. Of that tax rate, only 5% goes toward debt-service and that amount will continue to decrease down to 0% over the next 9 years. This is a very rare, unusual feat for local government!
City Council and staff look carefully at all the options available to reduce existing debt and plan accordingly as they work on upcoming budgets. And as the city looks to the future, utilizing measures currently in place, it can anticipate other milestones