City of Andrews (City) outstanding direct debt is entirely comprised of Certificates of Obligation (COs). The City has no revenue-supported debt obligations, lease purchase or lease-revenue obligations.
Certificates of Obligation
Certificates of Obligation are typically issued without voter approval (unless a referendum is petitioned) and backed by tax revenue, fee revenues, or a combination of the two. The City's COs are secured by a combination of property taxes and a limited pledge of the City's combined water and wastewater system.
City of Andrews Certificates of Obligation have been rated AA by Fitch.
Fitch Notice of Upgrade Rating to AA, August 1, 2016
As of September 30, 2016, the Direct Debt for the City was as follows:
|Sale Date||Final Maturity||Original Borrowing||Outstanding 9/30/16||Per Capita|
|Comb Tax & Rev C/O Ser 2011||2012||2031||$7,000,000||$4,715,000||$341|
|Comb Tax & Rev C/O Ser 2015||2015||2045||$8,000,000||$8,000,000||$579|
|Total Direct Debt||$15,000,000||$12,715,000||$920|
Note: Per Capita figures are based on the City's 2016 estimated population of 13,816.
Historical Debt Authorization and Approval
As mentioned above, the City's debt is comprised of certificates of obligation which do not require a bond election. The outstanding debt was authorized by the City Council as follows:
- On October 20, 2011, the City Council approved an ordinance authorizing the issuance of “City of Andrews, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2011” for $7,000,000; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a limited pledge of the City’s combined water and wastewater system. The purpose of this issuance being to finance the constructing, improving, maintaining and operating of a relief highway route around and outside the boundaries of the City, including drainage, striping, signalization and site improvements, and to pay costs of issuance.
On April 9, 2015, the City Council approved an ordinance authorizing the issuance of “City of Andrews, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2015” for $8,000,000; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a limited pledge of the City’s combined water and wastewater system. The purpose of this issuance being to finance the constructing, improving, maintaining and operating of a relief highway route around and outside the boundaries of the City, including drainage, striping, signalization and site improvements, and to pay costs of issuance.
To view documents created in compliance with HB 1378 on debt transparency, click here.
To view the Debt Service Fund excerpts from previous years' budgets, click here.
To view the Tax Rates for the current fiscal year, click here.
The City Charter for the City of Andrews requires that during the period in which bonds are outstanding, the City must create and maintain certain accounts or funds to receive the proceeds from the sale of the bonds and to account for the revenues which are pledged for payment of the bonds. The assets can be used only in accordance with the terms of the bond ordinance and for the specific purpose(s) designated therein.
Legal debt margin
There is no statutory debt limitation in the City Charter or under State law. The City Charter provides that the total debt of the City shall not exceed that provided by state law. Under the provisions of State law (Article XI, Section 5, of the State of Texas Constitution), the maximum tax rate is limited to $2.50 per $100 assessed valuation. The City’s tax rate is currently $.1890 per $100 assessed valuation. The City’s Fiscal Principles and Policies states: The City will strive to limit general obligation annual debt service requirements to 20% of general governmental expenditures. Debt service to total general expenditures for fiscal year ending September 30, 2016 was 9.9%.
All current debt is completely supported by a limited sales tax. On May 14, 2011, the resident electors of Andrews, Texas voted for the adoption of a 1/4 of 1% sales and use tax within the City of Andrews to pay the costs of constructing, improving, maintaining, and operating a relief highway route around and outside the boundaries of the city to promote new or expanded business development, including the payment of principal of, interest on and other costs relating to any bonds, notes ore other obligations issued to support the relief highway project.
Continuing Disclosure Report
The Municipal Securities Rulemaking Board’s (MSRB) Electronic Municipal Market Access (EMMA) website publicly displays continuing disclosures that are provided either as required disclosures by municipal issuers and other parties known as “obligated persons” or “obligors” under contractual agreements entered into under Rule 15c2-12 of the Securities Exchange Act of 1934 (Exchange Act) or as voluntary disclosures by issuers and obligated persons without a contractual obligation to do so. Continuing disclosure consists of important information about a municipal bond that arises after the initial issuance of the bond. This information generally would reflect the financial or operating condition of the issuer as it changes over time, as well as specific events occurring after issuance that can have an impact on the ability of issuer to pay amounts owing on the bond, the value of the bond if it is bought or sold prior to its maturity, the timing of repayment of principal, and other key features of the bond.