Debt Service Funds

Fiscal Year 2021/22

Overview

Debt Service Funds are used to account for the accumulation of resources for and the payment of, general long-term debt principal and interest which are not serviced by the General, Special Revenue, and Enterprise Funds. They do not include contractual obligations accounted for in the individual funds.

Debt Service Funds By Fund FY2021/22

The funds below comprise Debt Service Funds -

General Obligation Bond and Interest Fund

General Obligation bonds are a form of long-term borrowing in which the City issues municipal securities and pledges its full faith and credit to their repayment. Bonds are repaid over many years through semi-annual debt service payments. The City levies a property tax for the purpose of retiring the principal and paying interest on the general obligation bonds. The tax rate is based on the annual debt service requirements and includes a tax delinquency factor.


The budgeted amount for Fiscal Year 2021/22 is $34.5 million, an increase of $2.1 million from the Fiscal Year 2020/21 estimated amount.

General Obligation Bond and Interest Fund By Category FY2019/20 - FY2021/22

Street and Highway Bond and Interest Fund

Street and Highway special revenue bonds are issued specifically for the purpose of constructing street and highway projects. These bonds require voter approval and are secured by gasoline tax revenues collected by the State of Arizona. The State’s current distribution formula provides that 50.5% be retained in the state highway fund, 19% be distributed to counties, 27.5% be distributed to all incorporated cities and towns, and a final 3% be distributed to cities with a population greater than 300,000.


The City designates the 3% allocation to the repayment of the principal and interest on the Street and Highway revenue bonds. If the amount received is not sufficient to cover the debt service payments, then an operating transfer from the HURF Fund to the debt service fund is made to cover the difference.


The budgeted amount for Fiscal Year 2021/22 is $11.1 million, a decrease of $0.7 million from the Fiscal Year 2020/21 estimated amount. The debt services payments are due to be paid off in this Fiscal Year.


Street and Highway Bond and Interest Fund By Category FY2019/20 - FY2021/22