Release Date: May 7, 20010
 Office of District 10 Councilman John G. Clamp: 207-7276

Councilman John G. Clamp requests review of the Debt Service Fund

Fiscal year 2011 City budget discussions will begin May 18. Councilman John G. Clamp has asked that these discussions include an in-depth review of how the City manages its debt service fund.

The debt service fund represents the amount of tax collected from the debt service portion of the property tax. The City is required by the Tax Code and the City Charter to use debt service funds to pay the principal of and interest on bond indebtedness owed by the City for the next fiscal year, only.

While the property tax rate has decreased in the last three years, the debt rate has remained constant since 2003. The current property tax rate is 0.56569, of which the debt rate is 0.2115.

"While it is legal for the debt tax rate to remain constant from year to year, I am concerned that we are collecting more taxes than are necessary at this time," said Councilman Clamp. "As such, I have asked the City Manager for a review of the debt service fund in the hope that we may be able to either lower the debt tax rate portion of the property tax or refund a portion of the reserve balance to our citizens," he continued. According to the fiscal year 2010 adopted budget, the City’s debt service fund gross ending balance is estimated to be $79 million.