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 $.1257 of the current property tax rate of $.8000. Even though the City has four outstanding debt issues, the 2022 & 2024 are the only issues paid by property taxes. The other issues are supported by the respective fund’s revenues. Those particular issues have an operational impact equal to the annual debt service payment.
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 2023-2024, outstanding general obligation bond and certificates of obligation bonds will be $32,099,535 however only $666,230 is currently supported by property taxes.
