Legal Debt Service Limit
There is no direct limit on debt in the City Charter. Statutes of the State of Texas do not provide any limitations on the dollar amount of debt cities can float; however, as a matter of policy, the Attorney General of Texas, will not approve the issuance of bonds where the total debt service of all tax supported debt requires a tax rate of more than $1.50 per $100 assessed valuation. The truth-in-taxation criterion specifies that debt (Interest & Sinking) requirements must be met first, and then the operations can be funded. The property tax rate to meet these needs cannot exceed $2.50 per $100 valuation.
Legal Debt Service Requirements
Debt service requirements for the City of Port Lavaca are currently $.0777 of the current property tax rate of $.7900. Even though the City has six outstanding general obligation debt issues, the 2012 is the only issue paid by property taxes. Other issues are supported by the respective fund’s revenues. Those particular issues have an operational impact equal to the annual debt service payment.
The City has plans to issue additional debt in the next 12 months to fund a large dredging project.
See the City’s Debt Tables which list each debt issue separately with its clearly stated principal and interest payment due. At the end of Fiscal Year 2015-2016, outstanding general obligation bond and certificates of obligation bonds will be $7,965,000 however only $2,180,000 is currently supported by property taxes.