General Obligation Bonds and Certificates of Obligations
The City issues general obligation bonds and certificates of obligation for the purpose of fulfilling its capital improvements programs. General obligation bonds and certificates of obligation are for both governmental and business-type activities. The bonds are reported in the Proprietary Funds only if they are expected to be repaid from proprietary revenues. The general long-term bonds, certificates of obligation and assumed obligations are paid through the Debt Service Fund from tax revenues. Generally these programs are classified in several broad areas: public safety, drainage, transportation, parks, facilities and utility construction.
As a Home Rule Charter city, the City of Missouri City is not limited by law in the amount of debt it may issue. Under Article XI, Section 5 of the State of Texas Constitution and the City Charter, the maximum tax rate for all purposes is $2.50 per $100 of assessed valuation. Within this $2.50 maximum, there is no legal limit upon the amount of taxes which can be levied for debt service.
The goal of the City is to maintain the ability to provide high quality essential City services in a cost effective manner. Policy makers attempt to maintain a fairly stable tax rate and issue debt only as assessed values increase for new improvements. In 2003 the voters passed a $75 million bond issue in which the City promised the tax rate would not exceed a four-cent tax rate increase. These improvements will be staged over 10-15 years in order to meet this goal. Voters also passed a $17.5 million bond issue in 2008. The purpose of these funds was to acquire recreational park facilities. In 2014, voters approved a $40 million bond issue for drainage, street, bridge, sidewalk, and city facility improvements, a new fire station, and public facility improvements.
The City’s most recent ratings are, an "AA" rating from Standard & Poor’s, and an "Aa2" from Moody’s Investor’s Service.
Lease purchase agreements have been utilized mainly to purchase computers, copiers, fire trucks and other machinery and equipment. Payments of principal and interest are made either monthly or yearly over a period of three to ten years, depending on the estimated life of the asset. At the current time, the City has a lease for a Fire Truck with a remaining amount of $169,447 maturing in 2023; and a lease for IT network equipment with a remaining amount of $140,574 maturing in 2021.