HomeMy WebLinkAboutPR 24557: APPROVAL OF CONTRACT FOR ARBITRAGE REBATE COMPLIANCE SERVICESUT1 /"i�lllT _
www.PortArthurTx.gov
INTEROFFICE MEMORANDUM
Date: 10/3/2025
To: The Honorable Mayor and City Council
Through: Ron Burton, City Manager
From: Lynda Boswell, Director of Finance
RE: PR No. 24557 Approval of Contract for arbitrage rebate compliance services
with Hilltop Securities Asset Management, LLC
Introduction: Request approval for the City Manager to enter a new contract agreement for
arbitrage rebate compliance services with Hilltop Securities Asset Management, LLC for a
period of two years.
Background: The City is obligated by bond ordinances to monitor the investment earnings of
bond proceeds to determine to what extent, if any, we will be required to rebate excess
earnings to the Internal Revenue Service. The constantly changing, Treasury Department
regulations, set forth the statutory rules and exceptions used to calculate the excess earnings.
Compliance with these complex regulations requires specific expertise.
Since 1995, the City has maintained a contract with Hilltop Securities (previous name - First
Southwest) to provide arbitrage rebate services. Our relationship with Hilltop Securities
throughout the term of these contracts has been excellent. They have performed as outlined in
the contract and assisted us with rebate and in meeting the arbitrage exceptions.
Budget Impact: The contract has annual projected budgetary impact of $16, 000 and funds are
available in the Finance Department professional services account no. 001-07-015-5420-00-
10-000.
Recommendation: The attached Proposed Resolution No. 24557 authorizes the City Manager
to enter a new contract agreement for arbitrage rebate compliance services with Hilltop
Securities Asset Management, LLC for a period of two years. We recommend that the City
Council approve it as presented.
P. R. NO. 24557
LYN - TNR 10/03/2025
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE CITY MANAGER
TO ENTER A NEW CONTRACT AGREEMENT FOR
ARBITRAGE REBATE COMPLIANCE SERVICES WITH
HILLTOP SECURITIES ASSET MANAGEMENT, LLC, FOR
A PERIOD OF TWO (2) YEARS WITH AN ANNUAL
PROJECTED BUDGETARY IMPACT OF $16,000;
FUNDING IS SUBJECT TO ANNUAL BUDGET APPROVAL.
UPON APPROVAL, FUNDING SHALL BE AVAILABLE IN
THE FINANCE DEPARTMENT ACCOUNT #001-07-015-
5420-00-10-000.
WHEREAS, pursuant to federal tax regulations and applicable bond ordinances, the City of
Port Arthur is required to monitor the investment earnings of bond proceeds in order to determine
whether excess earnings must be rebated to the Internal Revenue Service; and,
WHEREAS, the City has previously engaged Hilltop Securities Asset Management, LLC
("Hilltop Securities") to provide arbitrage rebate compliance services and has received satisfactory
performance under said engagement; and,
WHEREAS, based on prior performance and expertise, the City now seeks to enter into a
new two-year contract with Hilltop Securities for the continued provision of arbitrage rebate
compliance services; and,
WHEREAS, the proposed contract will have an annual budgetary impact of ($16,000.00),
with funding to be provided from Finance Department Account No. 001-07-015-5420-00-10-000,
subject to appropriation during the annual budget process.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR, TEXAS:
THAT the City Manager is hereby authorized and directed to execute, on behalf of the City
of Port Arthur, a contract with Hilltop Securities Asset Management, LLC for arbitrage rebate
compliance services, in the amount of $16,000.00 annually, as more fully set forth in Exhibit "A"
attached hereto and incorporated herein by reference.
THAT, while the term of the contract is two (2) years, the continuation of services shall
remain subject to the availability and approval of funds during the City's annual budget adoption
process. Funding is available in the finance department account #001-07-015-5420-00-10-000; and,
THAT a copy of the caption of this resolution is spread upon the Minutes of the City Council.
READ, ADOPTED, AND APPROVED, this day of October, 2025, A.D., at a
Regular Meeting of the City Council of the City of Port Arthur, Texas, by the following vote:
AYES: Mayor:
Councilmembers:
P. R. NO. 24557
LYN - TNR 10/03/2025
NOES:
Charlotte M. Moses, Mayor
ATTEST:
Sherri Bellard, City Secretary
APPROVED
Roxann Pais Cotroneo, City Attorney
APPROVED FOR AVAILABILITY OF FUNDS:
Lynda Boswell, Director of Finance
Ron Burton,
EXHIBIT "A"
Docusign Envelope ID: 993906DD-C1B4-44B5-B125-6F43C25F7B14
Form No. 148(f); Revised 02/01/2022
AGREEMENT FOR
ARBITRAGE REBATE COMPLIANCE SERVICES
BETWEEN
CITY OF PORT ARTHUR, TEXAS
(Hereinafter Referred to as the "ISSUER")
AND
HILLTOP SECURITIES ASSET MANAGEMENT, LLC
(Hereinafter Referred to as "HSAM")
It is understood and agreed that the Issuer, in connection with the sale and delivery of certain bonds, notes, certificates, or
other tax-exempt obligations (the "Obligations" or "Bonds"), will have the need to determine to what extent, if any, it will be
required to rebate certain investment earnings (the amount of such rebate being referred to herein as the "Arbitrage
Amount') from the proceeds of the Obligations to the United States of America pursuant to the provisions of Section
148(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code"). For purposes of this Agreement, the term
"Arbitrage Amount" includes payments made under the election to pay penalty in lieu of rebate for a qualified construction
issue under Section 148(f)(4) of the Code.
If it is accepted by the Issuer, this shall become the agreement (the "Agreement') between the Issuer and HSAM and will
become effective at the date of its acceptance as provided for herein below.
This Agreement shall apply to all issues of tax-exempt Obligations delivered subsequent to the effective date of the
rebate requirements under the Code, except for (i) issues which qualify for exceptions to the rebate requirements in
accordance with Section 148 of the Code and related Treasury regulations, or (ii) issues excluded by the Issuer in
writing in accordance with the further provisions hereof, (iii) new issues effected in a fashion whereby HSAM is
unaware of the existence of such issue, (iv) issues in which, for reasons outside the control of HSAM, HSAM is
unable to procure the necessary information required to perform such services.
Covenants of Hilltop Securities Asset Management
2. HSAM agrees to provide our professional services in determining the Arbitrage Amount with regard to the
Obligations. The Issuer will assume and pay the fee of HSAM as such fee is set out in Appendix A attached hereto.
HSAM shall not be responsible for any expenses incurred on behalf of Issuer in connection with providing such
professional services, including any costs incident to litigation, mandamus action, test case or other similar legal
actions.
HSAM agrees to perform the following duties in connection with providing arbitrage rebate compliance services:
a. To cooperate fully with the Issuer in reviewing the schedule of investments made by the Issuer with (i)
proceeds from the Obligations, and (ii) proceeds of other funds of the Issuer which, under Treasury
Regulations Section 1.148, or any successor regulations thereto, are subject to the rebate requirements of
the Code;
b. To perform, or cause to be performed, consistent with the Code and the regulations promulgated
thereunder, calculations to determine the Arbitrage Amount under Section 148(f)(2) of the Code; and
C. To provide a report to the Issuer specifying the Arbitrage Amount based upon the investment schedule, the
calculations of bond yield and investment yield, and other information deemed relevant by HSAM. In
undertaking to provide the services set forth in paragraph 2 and this paragraph 3, HSAM does not assume
any responsibility for any record retention requirements which the Issuer may have under the Code or other
applicable laws, it being understood that the Issuer shall remain responsible for compliance with any such
record retention requirements. HSAM shall maintain Issuer records and work product pursuant to its own
internal document retention policy.
Docusign Envelope ID: 993906DD-C1B4-44B5-B125-6F43C25F7B14
Covenants of the Issuer
4. In connection with the performance of the aforesaid duties, the Issuer agrees to the following:
a. The fees due to HSAM in providing arbitrage rebate compliance services shall be calculated in accordance
with Appendix A attached hereto. The fees will be payable upon delivery of the report prepared by HSAM
for each issue of Obligations during the term of this Agreement.
b. The Issuer will provide HSAM all information regarding the issuance of the Obligations and the investment
of the proceeds therefrom, and any other information necessary in connection with calculating the
Arbitrage Amount. HSAM will rely on the information supplied by the Issuer without inquiry, it being
understood that HSAM will not conduct an audit or take any other steps to verify the accuracy or
authenticity of the information provided by the Issuer.
C. The Issuer will notify HSAM in writing of the retirement, prior to the scheduled maturity, of any
Obligations included under the scope of this Agreement within 30 days of such retirement. This
notification is required to provide sufficient time to comply with Treasury Regulations Section 1.148-3(g)
which requires final payment of any Arbitrage Amount within 60 days of the final retirement of the
Obligations. In the event the Issuer fails to notify HSAM in a timely manner as provided hereinabove,
HSAM shall have no further obligation or responsibility to provide any services under this Agreement with
respect to such retired Obligations.
In providing the services set forth in this Agreement, it is agreed that HSAM shall not incur any liability for any
error of judgment made in good faith by a responsible officer or officers thereof and, except to the limited extent set
forth in this paragraph, shall not incur any liability for any other errors or omissions, unless it shall be proved that
such error or omission was a result of the gross negligence or willful misconduct of said officer or officers. In the
event a payment is assessed by the Internal Revenue Service due to an error by HSAM, the Issuer will be
responsible for paying the correct Arbitrage Amount and HSAM's liability shall not exceed the amount of any
penalty or interest imposed on the Arbitrage Amount as a result of such error. Additionally, it is understood and
agreed that HSAM shall incur no liability for any errors, omissions, or failure to make a timely payment in
connection with any IRS Computation Date calculations occurring prior to the effective date of the Initial
Agreement with the Issuer, even if the error is discovered after the date of HSAM's engagement.
No Coordination with Private Activity Regulations
6. The purpose of HSAM's engagement is to determine the Arbitrage Amount pursuant to Section 148(f)(2) of the
Code. Sections 141-147 of the Code and the related Treasury Regulations set forth requirements with respect to the
amount of obligation proceeds that may be used for the benefit of a private person or entity. Treasury Regulations
Section 1.141-6(a) requires that allocations of expenditures of obligation proceeds for purposes of computing the
Arbitrage Amount must be the same as the allocations of expenditures used to test the private use of projects
financed with proceeds of the Obligations.
For purposes of calculating the Arbitrage Amount, our calculations assume that the allocation of the expenditures of
Obligation proceeds as provided to us are the same for both purposes of Sections 141-147 and Section 148 of the
Code. The scope of this engagement does not include procedures to analyze the private use limitations associated
with the Obligations.
Obligations Issued Subsequent to Initial Agreement
8. The services contracted for under this Agreement will automatically extend to any additional Obligations (including
financing lease obligations) issued during the term of this Agreement if such Obligations are subject to the rebate
requirements under Section 148(f)(2) of the Code. In connection with the issuance of additional Obligations, the
Issuer agrees to the following:
a. The Issuer will notify or cause the notification, in writing, to HSAM of any tax-exempt financing
(including financing lease obligations) issued by the Issuer during any calendar year of this Agreement, and
will provide HSAM with such information regarding such Obligations as HSAM may request in connection
with its performance of the arbitrage rebate services contracted for hereunder. If such notice is not provided
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Docusign Envelope ID: 993906DD-C1B4-44B5-B125-6F43C25F7B14
to HSAM with regard to a particular Obligation, HSAM shall have no obligation to provide any services
hereunder with respect to such Obligation.
b. At the option of the Issuer, any additional Obligations to be issued subsequent to the execution of this
Agreement may be excluded from the services provided for herein. In order to exclude an issue, the Issuer
must notify HSAM in writing of their intent to exclude any specific Obligations from the scope of this
Agreement, which exclusion shall be permanent for the full life of the Obligations; and after receipt of such
notice, HSAM shall have no obligation to provide any services under this Agreement with respect to such
excluded Obligations.
Effective Date of Agreement
9. This Agreement shall become effective at the date of acceptance by the Issuer as set out herein below and remain in
effect thereafter for a period of two (2) years from the date of acceptance, provided, however, that this Agreement
may be terminated with or without cause by the Issuer or HSAM upon thirty (30) days prior written notice to the
other party. In the event of such termination, it is understood and agreed that only the amounts due to HSAM for
services provided and expenses incurred to and including the date of termination will be due and payable. No
penalty will be assessed for termination of this Agreement. In the event this Agreement expires or is terminated
prior to the completion of its stated term, all records provided to HSAM with respect to the investment of monies by
the Issuer shall be returned to the Issuer as soon as practicable following written request by Issuer, provided that
such records have not been destroyed pursuant to HSAM's internal document retention policy. In addition, the
parties hereto agree that, upon termination of this Agreement, HSAM shall have no continuing obligation to the
Issuer regarding any arbitrage rebate related services contemplated herein, regardless of whether such services have
previously been undertaken, completed, or performed.
Acceptance of Agreement
10. When accepted by the Issuer in accordance with the terms hereof, it, together with Appendix A attached hereto, will
constitute the entire Agreement between the Issuer and HSAM for the purposes and the consideration herein
specified. In order for this Agreement to become effective, it must be accepted by the Issuer within sixty (60) days
of the receipt by the Issuer. After the expiration of such 60-day period, acceptance by the Issuer shall only become
effective upon delivery of written acknowledgement and reaffirmation by HSAM that the terms and conditions set
forth in this Agreement remain acceptable to HSAM.
Counterpart Signatures
11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument. Each Party may execute this Agreement on a facsimile
or PDF hereof. In addition, facsimile or PDF signatures of either Party shall be valid and binding, and delivery of a
facsimile or PDF signature by either Party shall constitute due execution and delivery of this Agreement.
Governing Law
12. This Agreement will be governed by and construed in accordance with the laws of the State of Texas, without regard
to its principles of conflicts of laws.
Acceptance
13. Acceptance will be indicated by returning one executed copy to HSAM. An electronic version is acceptable.
HSAM will then execute the Agreement and return a fully executed electronic version of the Agreement to the
Issuer.
3
Docusign Envelope ID: 993906DD-C1B4-44B5-B125-6F43C25F7B14
Respectfully submitted,
HILLTOP SECURITIES ASSET MANAGEMENT, LLC
By
Date
Brian Helming, Managing Director
ISSUER'S ACCEPTANCE CLAUSE
The above and foregoing is hereby in all things accepted and approved by
Name), on this the day of ,
By
Authorized Representative
Title
Printed Name
Docusign Envelope ID: 993906DD-C1B4-44B5-B125-6F43C25F7B14
APPENDIX A - FEES
The Obligations to be covered initially under this Agreement include all issues of tax-exempt obligations delivered subsequent to
the effective dates of the rebate requirements, under the Code, except as set forth in Section I of the Agreement.
The fee for any Obligations under this Agreement shall only be payable if a computation is required under Section 148(f)(2) of
the Code. In the event that any of the Obligations fall within an exclusion to the computation requirement as defined by Section
148 of the Code or related regulations and no calculations were required by HSAM to make that determination, no fee will be
charged for such issue. For example, certain obligations are excluded from the rebate computation requirement if the proceeds
are spent within specific time periods. In the event a particular issue of Obligations fulfills the exclusion requirements of the
Code or related regulations, the specified fee will be waived by HSAM if no calculations were required to make the
determination.
HSAM's fee for arbitrage rebate services is based upon a fixed Calculation Period fee per issue. The Calculation Period fee is
charged based upon the number of Calculation Periods that proceeds exist subject to rebate from the delivery date of the issue
to the Calculation Date.
HSAM's fees are payable upon delivery of the report. The first report will be made following one Calculation Period from the
date of delivery of the Obligations and on each Calculation Date thereafter during the term of the Agreement. The fees for
computations of the Arbitrage Amount which encompass more, or less, than one Calculation Period shall be prorated to reflect
the longer, or shorter, period of work performed during that period.
The fee for each of the Obligations included in this Agreement shall be based on the table below.
Description
FEE
ANNUAL CALCULATION PERIOD FEE
$ 1,400
COMPREHENSIVE ARBITRAGE COMPLIANCE SERVICES INCLUDE:
• Commingled Funds Analysis & Calculations
• Spending Exception Analysis & Calculations
• Yield Restriction Analysis & Calculations
(for yield restricted Project Funds, Reserve Funds, Escrow Funds, etc.)
• Parity Reserve Fund Allocations
• Transferred Proceeds Calculations
• Universal Cap Calculations
• Debt Service Fund Calculations (including earnings test when required)
INCLUDED
• Preparation of all Required IRS Paperwork for Making a Rebate Payment / Yield Reduction
Payment
• Retention of Records Provided for Arbitrage Computations
• IRS Audit Assistance
• Delivery of Rebate Calculations Each Year That Meets the Timing Requirements of the Audit
Schedule
• On -Site Meetings, as Appropriate, to Discuss Calculation Results / Subsequent Planning Items
OTHER SERVICES AVAILABLE:
IRS Refund Request — Update calculation, prepare refund request package, and assist issuer as necessary
$3,000
in resvonding to subsequent IRS Information Requests
Docusign Envelope ID: 993906DD-C1B4-44B5-B125-6F43C25F7B14
EXPLANATION OF TERMS:
a. Bond Year: A "Bond Year" is each 1-year period selected by the issuer. The first and last bond years may be short
periods. If no bond year is selected, bonds years will end on each anniversary date of the issue and at final maturity.
b. Computation Date: A "Computation Date" is a five bond year period no longer than five years after the issue date.
Subsequent Computation Dates will be for a period not later then 5 years after the previous Computation Date and at
final maturity of the issue.
c. Calculation Period: A "Calculation Period" represents a one year period from the delivery date of the issue to the date
that is one calendar year after the delivery date, and each subsequent one-year periods thereafter. Therefore, if a
calculation is required that covers more than one Calculation Period, the Calculation Period fee is multiplied by the
number of periods contained in the calculation being performed. If a calculation includes a portion of a Calculation
Period, i.e., if the calculation includes 1 '/z Calculation Periods, then the base fee will be multiplied by 1.5.
d. Electronic Data Submission: The data should be provided electronically in MS Excel or ASCII text file (comma
delimited text preferred) with the date, description, dollar amount, and an activity code (if not in debit and credit
format) on the same line in the file.
e. Variable/Floating Rate Bond Issues: Special services are also required to perform the arbitrage rebate calculations
for variable rate bonds. A bond is a variable rate bond if the interest rate paid on the bond is dependent upon an
index which is subject to changes subsequent to the issuance of the bonds. The computational requirements of a
variable rate issue are more complex than those of a fixed rate issue and, accordingly, require significantly more
time to calculate. The additional complexity is primarily related to the computation of the bond yield, which must be
calculated on a "bond year" basis. Additionally, the regulations provide certain flexibility in computing the bond
yield and determining the arbitrage amount over the first IRS reporting period; consequently, increased calculations
are required to determine which bond yield calculation produces the lowest arbitrage amount.
Commingled Fund Allocations: By definition, a commingled fund is one that contains either proceeds of more
than one bond issue or proceeds of a bond issue and non -bond proceeds (i.e., revenues) of $25,000 or more. The
arbitrage regulations, while permitting the commingling of funds, require that the proceeds of the bond issue(s) be
"carved out" for purposes of determining the arbitrage amount. Additionally, interest earnings must be allocated to
the portion of the commingled fund that represents proceeds of the issue(s) in question. Permitted "safe -harbor"
methods (that is, methods that are outlined in the arbitrage regulations and, accordingly, cannot be questioned by the
IRS under audit), exist for allocating expenditures and interest earnings to issues in a commingled fund. HSAM uses
one of the applicable safe -harbor methods when doing these calculations.
g. Debt Service Reserve Funds: The authorizing documents for many revenue bond issues require that a separate
fund be established (the "Reserve Fund") into which either bond proceeds or revenues are deposited in an amount
equal to some designated level, such as average annual debt service on all parity bonds. This Reserve Fund is
established for the benefit of the bondholders as additional security for payment on the debt. In most cases, the
balance in the Reserve Fund remains stable throughout the life of the bond issue. Reserve Funds, whether funded
with bond proceeds or revenues, must be included in all rebate calculations.
h. Debt Service Fund Calculations: Issuers are required under the regulations to analyze the invested balances in
their debt service funds annually to determine whether the fund depletes as required during the year and is,
therefore, "bona fide" (i.e., potentially exempt from rebate in that year). It is not uncommon for surplus balances to
develop in the debt service fund that services an issuer's tax supported debt, particularly due to timing differences of
when the funds were due to be collected versus when the funds were actually collected. HSAM performs this formal
analysis of the debt service fund and, should it be determined that a surplus balance exists in the fund during a given
year, allocates the surplus balance among the various issues serviced by the fund in a manner that is acceptable
under IRS review.
i. Earnings Test for Debt Service Funds: Certain types of bond issues require an additional level of analysis for the
debt service fund, even if the fund depletes as required under the regulations and is "bona fide." For short-term,
fixed rate issues, private activity issues, and variable rate issues, the regulations require that an "earnings test" be
performed on a bona fide debt service fund to determine if the interest earnings reached $100,000 during the year. In
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cases where the earnings reach or exceed the $100,000 threshold, the entire fund (not just the surplus or residual
portion) is subject to rebate.
Transferred Proceeds Calculations: When a bond issue is refinanced (refunded) by another issue, special services
relating to "transferred proceeds" calculations may need to be performed. Under the regulations, when proceeds of a
refunding issue are used to retire principal of a prior issue, a pro-rata portion of the unspent proceeds of the prior
issue becomes subject to rebate and/or yield restriction as transferred proceeds of the refunding issue. The refunding
issue essentially "adopts" the unspent proceeds of the prior issue for purposes of the arbitrage calculations. These
calculations are required under the regulations to ensure that issuers continue to exercise due diligence to complete
the project(s) for which the prior bonds were issued.
k. Universal Cap: Current regulations provide an overall limitation on the amount of gross proceeds allocable to an
issue. Simply stated, the value of investments allocated to an issue cannot exceed the value of all outstanding bonds
of the issue. For example, this situation can occur if an issuer encounters significant construction delays or enters
into litigation with a contractor. It may take months or even years to resolve the problems and begin or resume
spending the bond proceeds; however, during this time the debt service payments are still being paid, including any
scheduled principal payments. Thus, it's possible for the value of the investments purchased with bond proceeds to
exceed the value of the bonds outstanding. In such cases, a "de -allocation" of proceeds may be required to comply
with the limitation rules outlined in the regulations.
Yield Restriction Analysis/Yield Reduction Computations: The IRS strongly encourages issuers to spend the
proceeds of each bond issue as quickly as possible to achieve the governmental purpose for which the bonds were
issued. Certain types of proceeds can qualify for a "temporary period," during which time the proceeds may be
invested at a yield higher than the yield on the bonds without jeopardizing the tax-exempt status of the issue. The
most common temporary period is the three-year temporary period for capital project proceeds. After the end of the
temporary period, the proceeds must be yield restricted or the issuer must remit the appropriate yield reduction
payment when due. HSAM performs a comprehensive yield restriction analysis when appropriate for all issues
having proceeds remaining at the end of the applicable temporary period and also calculates the amount of the yield
reduction payment due to the IRS.
RULE 15c2-12 FILING COVER SHEET
This cover sheet is sent with all submissions to the Municipal Securities Rulemaking Board's Electronic Municipal
Market Access ("EMMA") pursuant to Securities and Exchange Commission (SEC) Rule 15c2-12 or any
analogous state statutes.
Issuer Name: City of Port Arthur, Texas
Issue(s):
$ 9,120,000 General Obligation Refunding Bonds, Series 2019
$ 8,900,000 Combination Tax and Revenue Certificates of Obligation, Series 2020A
$ 60,560,000 Combination Tax and Revenue Certificates of Obligation, Series 2020B
(TWDB)
$ 28,080,000 Combination Tax and Revenue Certificates of Obligation, Series 2021
$ 1,530,000 General Obligation Refunding Bonds, Series 2021
$ 9,565,000 Combination Tax and Revenue Certificates of Obligation, Series 2022
$ 24,475,000 Combination Tax and Revenue Certificates of Obligation, Series 2023
$ 18,245,000 Combination Tax and Revenue Certificates of Obligation, Series 2024
Filing Format X electronic _ paper; If available on the Internet, give URL:
CUSIP Numbers to which the information filed relates (optional):
X Nine -digit number(s) (see following page(s)):
Six -digit number if information filed relates to all securities of the issuer
Financial & Operating Data Disclosure Information
X Annual Financial Report or ACFR
X Financial Information & Operating Data
Other (describe)
X Fiscal Period Covered: FYE 2024
Monthly Quarterly X Annual Other:
I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly:
Signature: /s/ Lynda Boswell
Name: Lynda Boswell Title: Finance Director
Employer: City of Port Arthur, Texas
Telephone Number: 409-983-8186
Email Address: lynda.boswell@portarthurtx.gov
DESCRIPTION OF ISSUES COVERED BY THIS REPORT
General Obligation Refunding Bonds, Series 2019
Date Principal CUSIP
02/15/26 $
1,070,000
733488J92
02/15/27
1,110,000
733488K25
02/15/28
1,185,000
733488K33
02/15/29
565,000
733488K41
02/15/30
595,000
733488K58
$
4,525,000
Combination Tax and Revenue Certificates of Obligation, Series 2020A
Date Principal CUSIP
UL/1J/2b
02/ 15/27
02/15/28
02/ 15/29
02/15/30
02/ 15/31
02/15/32
02/ 15/33
02/ 15/34
02/15/35
02/ 15/36
02/15/37
$ 420,000
440,000
465,000
480,000
500,000
520,000
545,000
565,000
590,000
610,000
635,000
665,000
$ 6,435,000
7334881,32
7334881,40
733488L57
7334881,65
733488L73
733488L81
7334881,99
733488M23
733488M31
733488M49
733488M56
733488M64
Combination Tax and Revenue Certificates of Obligation, Series 2020B (TWDB)
Date
Principal
CUSIP
08/15/25 $
2,000,000
733488N30
08/15/26
2,950,000
733488N48
08/15/27
2,960,000
733488N55
08/15/28
2,975,000
733488N63
08/15/29
2,990,000
733488N71
08/15/30
3,005,000
733488N89
08/15/31
3,020,000
733488N97
08/15/32
3,040,000
733488P20
08/15/33
3,060,000
733488P38
08/15/34
3,085,000
733488P46
08/15/35
3,110,000
733488P53
08/15/36
3,135,000
733488P61
08/15/37
3,160,000
733488P79
08/15/38
3,190,000
733488P87
08/15/39
3,220,000
733488P95
08/15/40
3,250,000
733488Q29
08/15/41
3,285,000
733488Q37
08/15/42
3,320,000
733488Q45
$
54,755,000
Combination Tax and Revenue Certificates of Obligation, Series 2021
Date
Principal
CUSIP
02/15/26 $
995,000
733488R77
02/15/27
1,045,000
733488R85
02/15/28
1,095,000
733488R93
02/15/29
1,150,000
733488527
02/15/30
1,210,000
733488535
02/15/31
1,275,000
733488543
02/15/32
1,330,000
733488550
02/15/33
1,385,000
733488568
02/15/34
1,445,000
733488576
02/15/35
1,500,000
733488584
02/15/36
1,560,000
733488592
02/15/37
1,625,000
733488T26
02/15/38
1,695,000
733488T34
02/15/39
1,760,000
733488T42
02/15/40
1,835,000
733488T59
02/15/41
1,905,000
733488T67
$
22,810,000
General Obligation Refunding Bonds, Series 2021
Date Principal CUSIP
02/15/26 $ 290,000 733488Q94
02/15/27 310,000 733488R28
$ 600,000
Combination Tax and Revenue Certificates of Obligation, Series 2022
Date
Principal
CUSIP
02/15/26 $
300,000
733488U24
02/15/27
315,000
733488U32
02/15/28
330,000
733488U40
02/15/29
345,000
733488U57
02/15/30
365,000
733488U65
02/15/31
385,000
733488U73
02/15/32
405,000
733488U81
02/15/33
425,000
733488U99
02/15/34
445,000
733488V23
02/15/35
470,000
733488V31
02/15/36
490,000
733488V49
02/15/37
515,000
733488V56
02/15/38
535,000
733488V64
02/15/39
555,000
733488V72
02/15/40
580,000
733488V80
02/15/42
1,235,000
733488V98
$
7,695,000
Combination Tax and Revenue Certificates of Obligation, Series 2023
Date
Principal
02/15/26 $
725,000
02/ 15/27
760,000
02/ 15/28
805,000
02/ 15/29
840,000
02/ 15/30
885,000
02/15/31
935,000
02/15/32
975,000
02/ 15/33
1,025,000
02/15/34
1,080,000
02/ 15/35
1,135,000
02/ 15/36
1,195,000
02/15/37
1,255,000
02/ 15/38
1,320,000
02/15/39
1,390,000
02/15/40
1,455,000
02/15/41
1,520,000
02/15/42
1,590,000
02/ 15/43
1,665,000
$
20,555,000
CUSIP
733488W48
733488W55
733488W63
733488W71
733488W89
733488W97
733488X21
733488X39
733488X47
733488X54
733488X62
733488X70
733488X88
733488X96
733488Y20
733488Y38
733488Y46
733488Y53
Combination Tax and Revenue Certificates of Obligation, Series 2024
Date
Principal
CUSIP
02/15/26 $
510,000
733488Y79
02/15/27
535,000
733488Y87
02/15/28
560,000
733488Y95
02/15/29
590,000
733488Z29
02/15/30
620,000
733488Z37
02/15/31
650,000
733488Z45
02/15/32
685,000
733488Z52
02/15/33
720,000
733488Z60
02/15/34
755,000
733488Z78
02/15/35
795,000
733488Z86
02/15/36
835,000
733488Z94
02/15/37
880,000
7334882A7
02/15/38
925,000
7334882135
02/15/39
970,000
7334882C3
02/15/40
1,020,000
7334882DI
02/15/41
1,075,000
7334882E9
02/15/42
1,130,000
7334882F6
02/15/43
1,185,000
7334882G4
02/15/44
1,250,000
7334882H2
$
15,690,000
AMENDED
CONTINUING DISCLOSURE REPORT
FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 2024
CITY OF PORT ARTHUR, TEXAS
GENERAL OBLIGATION
This report has been amended with audited financial information.
I *
HTSContinuingDisclosureServices
A Division of Hilltop Securities.
FINANCIAL STATEMENTS
The audited financial statements for the City for the fiscal year ended September 30, 2024 are being filed directly
with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access ("EMMA"), and are
hereby incorporated by reference into this Annual Continuing Disclosure Report.
SIGNATURE OF ISSUER
The information set forth herein has been obtained from the City and other sources believed to be reliable, but such
information is not guaranteed as to accuracy or completeness and is not to be construed as a promise or guarantee.
This Annual Continuing Disclosure Report may contain, in part, estimates and matters of opinion which are not
intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions,
or that they will be realized. The information and expressions of opinion contained herein are subject to change
without notice, and the delivery of this Annual Continuing Disclosure Report will not, under any circumstances,
create any implication that there has been no change in the affairs of the City or other matters described.
City of Port Arthur, Texas
/s/ Lynda Boswell
Lynda Boswell
Finance Director
Approved for Submission:
07/28/2025
Date
Amended
CERTIFICATE OF SUBMISSION OF ANNUAL REPORT
Subject to the continuing disclosure requirements of SEC Rule 15c2-12, this Annual Continuing Disclosure Report
for the City of Port Arthur, Texas with respect to the issues listed on the report cover was submitted directly to the
Municipal Securities Rulemaking Board's Electronic Municipal Market Access ("EMMA") listed below.
Municipal Securities Rulemaking Board ("MSRB")
via the Electronic Municipal Market Access ("EMMA") system
HTS Continuing Disclosure Services, A Division of Hilltop Securities Inc.
Signed by:
/s/ Preston Gabriel
CITY OF PORT ARTHUR, TEXAS
2025 GENERAL OBLIGATION DEBT REPORT
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2024
TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT(')
2024/2025 Market Valuation Established by Jefferson County and
Orange County Appraisal Districts (excluding totally exempt property)
Less Exemptions/Reductions at 100% Market Value:
Abatement
Over 65 Exemptions
Disabled Persons Exemptions
Homestead Exemptions
Homestead Cap Adjustment
Veteran Homestead Exemptions
Solar
Disaster Exemptions
Circuit Breaker Limitaiton
Productivity Loss
Pollution Control
2024/2025 Taxable Assessed Valuation
General Obligation Debt Payable from Ad Valorem Taxes (as of 1/31/2025):
General Obligation Bonds
Less: Self -Supporting Debt
Total General Obligation Debt Payable from Ad Valorem Taxes
Interest and Sinking Fund Balance as of 1/31/2025
Net General Obligation Debt Payable from Ad Valorem Taxes
Ratio of Net General Obligation Debt to Taxable Assessed Valuation
$ 5,364,889,361
$ 47,575,715
99,267,324
15,041,031
245,089,386
299,596,011
30,827,931
97,338
50,917
76,065,664
43,757,151
33,162,243 890,530,711
$ 4,474,358,650
2025 Population Estimate - 54,548
Per Capita Taxable Assessed Valuation - $82,026
Per Capita Funded Net Debt - $1,285
$ 143,880,000
$ 68,241,679
$ 75,638,321
$ 5,557,842
$ 70,080,479
1.57%
(1) As reported by the Jefferson County and Orange County Appraisal Districts; subject to change during the ensuing year.
TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY
Catego
Taxable Appraised Value, Fiscal Year Ending September 30
2025 2024 2023
% of % of % of
Amount Total Amount Total Amount Total
Real, Residential, Single -Family
$2,200,467,536
41.02%
$1,998,306,798
40.02%
$ 1,808,644,919
39.43%
Real, Residential, Multi -Family
329,632,623
6.14%
308,278,448
6.17%
287,511,632
6.27%
Real, Vacant Platted Lots/Tracts
63,841,896
1.19%
57,246,678
1.15%
57,315,025
1.25%
Real, Acreage (Land Only)
44,570,768
0.83%
33,900,465
0.68%
31,820,959
0.69%
Real, Farm and Ranch Improvements
67,799,863
1.26%
46,360,298
0.93%
44,648,176
0.97%
Real, Commercial and Industrial
1,461,568,600
27.24%
1,404,521,809
28.13%
1,254,760,641
27.36%
Real, Oil, Gas & Other Mineral Reserves
3,206,215
0.06%
4,998,747
0.10%
4,033,898
0.09%
Real and Intangible Personal, Utilities
426,743,236
7.95%
388,331,565
7.78%
367,818,906
8.02%
Tangible Personal, Business
746,841,898
13.92%
732,585,034
14.67%
712,248,933
15.53%
Tangible Personal, Other
745,673
0.01%
487,549
0.01%
483,042
0.01%
Residential Inventory
2,525,594
0.05%
2,694,889
0.05%
3,434,824
0.07%
Special Inventory
16,945,459
0.32%
15,473,990
0.31%
13,798,196
0.30%
Exempt Property
-
0.00%
-
0.00%
0.00%
Total Appraised Value Before Exemptions
$ 5,364,889,361
100.00%
$4,993,186,270
100.00%
$ 4,586,519,151
100.00%
Less: Total Exemptions/Reductions
890,530,711
755,000,732
742,581,324
Net Taxable Assessed Value
$ 4,474.358.650
$ 4.238.185,538
S 3.843.937,827
Taxable Appraised Value, Fiscal Year Ending
2022 2021
% of
% of
Category
Amount
Total
Amount
Total
Real, Residential, Single -Family
$1,658,579,357
41.54%
$1,174,134,526
35.30%
Real, Residential, Mufti -Family
275,884,588
6.91%
194,848,357
5.86%
Real, Vacant Platted Lots/Tracts
55,333,683
1.39%
53,648,322
1.61%
Real, Acreage (Land Only)
29,060,607
0.73%
24,446,085
0.73%
Real, Farm and Ranch Improvements
41,968,993
1.05%
32,969,942
0.99%
Real, Commercial and Industrial
1,128,963,382
28.27%
923,647,375
27.77%
Real, Oil, Gas & Other Mineral Reserves
2,151,426
0.05%
4,153,480
0.12%
Real and Intangible Personal, Utilities
321,761,278
8.06%
294,238,373
8.85%
Tangible Personal, Business
463,491,983
11.61%
604,360,304
18.17%
Tangible Personal, Other
556,301
0.01%
657,046
0.02%
Residential Inventory
4,332,573
0.11%
6,733,403
0.20%
Special Inventory
11,013,067
0.28%
12,392,572
0.37%
Exempt Property
-
0.00%
5,793
0.00%
Total Appraised Value Before Exemptions
$ 3,993,097,238
100.00%
$ 3,326,235,578
100.00%
Less: Total Exemptions/Reductions
592.521.724
348,523,517
Net Taxable Assessed Value
$ 3,400.575.514
S 1.977.71 ?.061
NOTE: Valuations shown are certified taxable assessed values reported by the Jefferson County and Orange County Appraisal Districts to the State
Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal
Districts update records.
TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY
G.O.
Ratio of
Fiscal
Taxable
Tax Debt
G.O. Tax Debt
Year
Taxable
Assessed
Outstanding
to Taxable
G.O.
Ended
Estimated
Assessed
Valuation
at End
Assessed
Tax Debt
9/30
Population(l)
Valuation (2)
Per Capita
of Year
Valuation
Per Capita
2021
53,062
$ 2,977,712,061
$ 56,118
$ 47,036,180
1.58%
$ 886
2022
56,039
3,400,575,514
60,682
50,791,678
1.49%
906
2023
56,705
3,843,937,827
67,788
64,325,000
1.67%
1,134
2024
55,724
4,238,185,538
76,057
74,638,673
1.76%
1,339
2025
54,548
4,474,358,650
82,026
68,536,673
(3) 1.53% (3)
1,256 (3)
(1) Source: The District.
(2) As reported by the Jefferson County and Orange County Appraisal Districts; subject to change during the ensuing year
(3) Projected.
TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY
Fiscal Year
Assessed
Total
General
Interest and
% Current
% Total
Ended 9/30
Value (I)
Tax Rate
Fund i�1
Sinking Fund (2)
Tax Levy (3)
Collections
Collections
2021
$ 2,977,712,061
$0.79200
$0.50798
$0.28402
$ 22,908,177
.96.63%
98.62%
2022
3,400,575,514
0.74072
0.49208
0.24863
24,428,274
94.80%
97.85%
2023
3,843,937,827
0.69154
0.43468
0.25685
25,238,300
90.18%
97.25%
2024
4,238,185,538
0.64864
0.39847
0.25017
27,493,110
93.05%
93.05%
2025
4,474,358,650
0.62627
0.37610
0.25017
28,021,655
90.07% (4)
92.53% (4)
(1) As reported by the Jefferson County and Orange County Appraisal Districts; subject to change during the ensuing year.
(2) General Fund and Interest and Sinking Fund tax rate is based upon the taxable valuation of the City. Does not take into account the value of
the Industrial Districts. See "TABLE 8 - INDUSTRIAL DISTRICT VALUES."
(3) The tax levy is adjusted for additions and corrections throughout the course of the year. The tax levy does not include Industrial District
payments.
(4) Collections as ofJanuary 31, 2025.
TABLE 5 - TEN LARGEST TAXPAYERS
Name of Taxoaver
Entergy Texas Inc. (Gen)
Enterprise Texas Pipeline
Motiva Enterprises
Entergy Texas Inc.
GT Logistics, LLC
Port Arthur Terminal LLC
Premcor Refining Group Inc
IRG Willow LLC
MPT of Port Arthur LLC
GSSW 9th Avenue Station
2024/2025
% of Total
Taxable
Taxable
Assessed
Assessed
Nature of Property
Valuation
Valuation
Oil & Gas Refinery
$ 249, 904,159
5.59%
Oil & Gas Pipeline
164,304,265
3.67%
Oil & Gas Refinery
131,276,358
2.93%
Electric Utility/Power Plant
97,043,982
2.17%
Logistics
83,247,706
1.86%
Oil & Gas Pipeline
68,498,259
1.53%
Oil & Gas Refinery
67,680,319
1.51%
Apartments
48,578,368
1.09%
Hospital
46,498,391
1.04%
Apartments
39,404,919
0.88%
$ 996,436,726
22.27%
(1) Represents only the portion of the facilities located within the City limits and subject to taxation by the City.
TABLE 6 - TAX ADEQUACY
2025 Net Principal and Interest Requirements ................
$0.2393 Tax Rate at 96% Collection Produces ............
Maximum Net Principal and Interest Requirements (2025).
$0.2393 Tax Rate at 96% Collection Produces ...........
Average Net Principal and Interest Requirements (2025-2044).
$0.1242 Tax Rate at 96% Collection Produces ................
........................ $ 10,278,157
........................ $ 10,278,855 (z)
........................ $ 10,278,157 (>>
........................ $ 10,278,855 (z>
........................ $ 5,333,724 a�
........................ $ 5,334,867 (z�
(1) Does not include self-supporting debt.
(2) Tax levy is based on taxable assessed value of City and does not include Industrial District payments.
TABLE 7 - ESTIMATED OVERLAPPING DEBT
Total
City's
2024/2025
G.O. Debt
Estimated
Overlapping
Taxable
as of
%
G.O. Debt as of
Assessed Value
2/28/2025
Applicable
2/28/2025
City of Port Arthur
$ 4,474,358,650
$ 135,160,000 (��
100.00%
$ 135,160,000
Beaumont ISD
15,648,798,059
181,820,000
0.05%
90,910
Bridge City ISD
1,401,390,201
84,389,991
11.56%
9,755,483
Hamshire-Fannett ISD
910,494,806
50,363,685
0.02%
10,073
Jefferson County
32,860,089,401
17,105,000
12.26%
2,097,073
Jefferson County DD 47
14,720,364,571
11,750,000
25.54%
3,000,950
Nederland ISD
3,708,924,936
135,515,000
8.26%
11,193,539
Orange County
8,769,549,099
3,065,000
2.97%
91,031
Port Arthur ISD
7,047,167,126
284,945,000
45.37%
129,279,547
Port Neches -Groves ISD
3,647,812,143
171,175,000
7.43%
12,718,303
Port of Beaumont Navigation District
13,980,495,695
66,440,000
0.05%
33,220
Port of Port Arthur Navigation District
7,995,212,301
87,410,000
48.05%
42,000,505
Sabine Pass ISD
2,811,714,828
92,143,256
10.50%
9,675,042
Sabine Pass Port Authority
703,487,477
6,900,000
10.30%
710,700
Sabine -Neches Nav Dist
32,390,799,138
192,110,000
12.26%
23,552,686
Total Direct and Overlapping Funded
Debt
$ 379,369,060
Ratio of Direct and Overlapping Funded
Debt to Taxable Assessed Valuation
8.48%
Per Capita Overlapping Funded Debt
$ 6,808
Source: Texas Municipal Reports.
(I) Includes self-supporting debt
TABLE 8 - INDUSTRIAL DISTRICT CONTRACTS
The City taxes property within its corporate limits, but has no such power for property located outside its boundaries.
From 2011 through September 30, 2024, the City has collected an aggregate of approximately $355,605,412 in annual
payments from certain corporations whose properties are located outside the City's boundaries but within the City's
extra -territorial jurisdiction pursuant to contracts with such corporations for such payments. Essentially the
corporations have agreed to make payments to the City in lieu of annexation and taxation. Pursuant to a Texas statute
adopted in 1963 specifically enabling Texas cities to do so, in December 1975 the City Council authorized and caused
the City to enter into separate contracts ("Industrial District Contracts") with corporations which provided that the
City would not annex such corporate properties during the tern of the contract unless the City determined that such
annexation is reasonably necessary to promote and protect the general health, safety and welfare of the persons
residing within the City (but that annexation would not be made for revenue purposes only). The City has contracts
with the following corporations expiring as shown:
Contractual
Contract
Payment
Firm
Expiration Date
for FY 2025
Air Products & Chemicals
December 30, 2027
563,335
Air Products LLC
December 31, 2032
176,325
BASF Corporation
December 30, 2027
703,089
(D
BASF/Total
December 30, 2027
985,018
(�1
Chevron -Phillips Chemical
December 30, 2027
940,940
(D
Chevron USA
December 30, 2027
500,145
(`1
Colonial Pipeline
December 31, 2021
25,000
Diamond Green Diesel
December 31, 2031
757,673
Exxon Mobil Corporation
December 31, 2021
35,000
Golden Pass
December 31, 2028
1,738,955
(51
Golden Pass Expansion
December 30, 2031
3,024,821
(3)
Motiva Chemicals
December 30, 2027
700,979
(i1
GT Logistics and GT Properties
December 30, 2028
47,942
(51
GT Logistics Expansion
December 31, 2031
324,147
Motiva, Inc.
December 31, 2029
11,534,931
OxBow Calcining
December 30, 2027
208,890
(0
Praxair-Motiva
December 30, 2027
161,479
1�1
Praxair-Valero
December 30, 2027
818,338
(21
Premcor , Inc.
December 30, 2027
4,615,762
(Ix4)
Sunoco Logistics
December 31, 2021
62,500
TOTAL Petrochemicals, Inc.
December 31, 2027
1,908,813
(i1
Veolia
December 30, 2024
127,075
(61
Total Expansion Side Cracker
December 31, 2028
460,183
(31
Premcor Expansion
December 30, 2026
992,916
S 31A14.256
(1) Payments are 82% of City property taxes that would have been paid if the facilities were located within City limits.
(2) Payments are 70% of City property taxes that would have been paid if the facilities were located within City limits.
(3) Payments are 25% of City property taxes that would have been paid if the facilities were located within City limits.
(4) Premcor Corporation is doing business as Valero Refinery.
(5) Payments are 81% of City property taxes that would have been paid if the facilities were located within City limits.
(6) Payments are 95% of City property taxes that would have been paid if the facilities were located within City limits.
TABLE 8A— AD VALOREM TAX COMPARISON TO INDUSTRIAL DISTRICT CONTRACTS
Fiscal
Gross
Receipts from
Ad Valorem
Year
Value of
Industrial
Tax Comparison
Ended
Industrial
District
Tax
Tax Rate
% of Actual
9/30
Districts
Contracts
Year
Equivalent
Tax Levy
2021
$ 6,556,760,633
$ 34,372,046
2020
$ 0.5242
150.04%
2022
5,588,981,693
33,222,436
2021
0.5944
136.00%
2023
5,580,250,362
28,830,038
2022
0.5166
114.23%
2024
8,231,217,126
30,659,394
2023
0.3725
111.53%
2025
8,487,983,395
31,589,052
2024
0.3722
126.06%
TABLE 811 — PREPAYMENT OF INDUSTRIAL DISTRICT CONTRACTS IN 2009
In December 2008, the City entered into new five-year agreements with the five industries. These agreements require
that the companies make an advance payment at the execution of the contract, and that the advance payment would
be credited with interest against the future payments over the term of the agreement. In Fiscal Year 2009, the City
received $17,400,000 as payments in advance and will recognize the revenue over the five-year term. The final year
of the agreement was fiscal year ending September 30, 2013.
TABLE 9 - GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS
Year
Less:
% of
Ended
Outstanding Debt Service(l)
Self Supporting
Net
Principal
9/30
Principal
Interest
Total
Debt Service
Debt Service
Paid
2025
$ 9,720,000
$ 4,136,442 $
13,856,442
$ 3,578,286
$ 10,278,157
2026
7,940,000
3,966,392
11,906,392
4,529,144
7,377,248
2027
8,175,000
3,716,467
11,891,467
4,523,611
7,367,856
2028
8,130,000
3,463,325
11,593,325
4,527,975
7,065,350
2029
6,960,000
3,237,109
10,197,109
4,306,334
5,890,775
28.64%
2030
7,180,000
3,029,234
10,209,234
4,309,134
5,900,100
2031
6,785,000
2,821,380
9,606,380
4,307,955
5,298,425
2032
6,980,000
2,621,704
9,601,704
4,301,054
5,300,650
2033
7,180,000
2,417,745
9,597,745
4,302,570
5,295,175
2034
7,400,000
2,203,845
9,603,845
4,306,420
5,297,425
53.51%
2035
7,620,000
1,980,190
9,600,190
4,303,265
5,296,925
2036
7,850,000
1,745,899
9,595,899
4,307,349
5,288,550
2037
8,100,000
1,502,563
9,602,563
4,303,238
5,299,325
2038
7,665,000
1,263,923
8,928,923
4,306,248
4,622,675
2039
7,895,000
1,027,912
8,922,912
4,306,187
4,616,725
80.89%
2040
8,140,000
787,834
8,927,834
4,308,984
4,618,850
2041
8,390,000
536,384
8,926,384
4,303,659
4,622,725
2042
6,670,000
313,838
6,983,838
3,683,288
3,300,550
2043
2,850,000
133,750
2,983,750
328,000
2,655,750
2044
1,250,000
31,250
1,281,250
1,281,250
100.00%
$ 142,880,000
S 40.937.183 $
183,817,183
$ 77,142,697
$ 106,674,486
(1) Does not include lease/purchase obligations.
TABLE 10 - INTEREST AND SINKING FUND BUDGET PROJECTION
Tax Supported Net Debt Service Requirements, Fiscal Year Ending 9/30/2025
$ 10,278,157
Estimated Lease Payments
-
Interest and Sinking Fund, 9/30/2024
$18,686,789
Interest and Sinking Fund Tax Levy (a, 96%Collections
9,570,350 t'l
Budgeted Transfer from Economic Development Corporation
217,748
Budgeted Transfer from Water and Sewer Fund
3,119,242
Budgeted Transfer from Solid Waste Fund
175,000
Budgeted Transfer from Pleasure Island
150,000 31,919,129
Estimated Balance, 9/30/2025
$ 21,640,972
(1) The levy is based on the value of the City; does not include Industrial District values. See "TABLE 8 — INDUSTRIAL DISTRICT CONTRACTS.
TABLE 11 - COMPUTATION OF SELF-SUPPORTING DEBT
Gross Sales Tax Receipts from 4A Corporation (9/30/24) $ 7,818,973
Sales Tax Revenue Bond Requirements (9/30/24) 218,831
Balance Available for General Obligation Requirements $ 7,600,142
General Obligation Bond Requirements Supported by Inter -Local Agreement (9/30/24) 323,900
Balance $ 7,276,242
Percentage General Obligation Bonds Supported by Inter -Local Agreement Self -Supporting 100.00%
Net Available Revenues from Waterworks and Wastewater System (9/30/24) $ 7,658,608
Waterworks and Wastewater Revenue Bond Requirements (9/30/24)
Balance Available for General Obligation Requirements $ 7,658,608
General Obligation Bond Requirements Supported by Waterworks and Wastewater Sysytem (9/30/24) 2,000,000
Balance $ 5,658,608
Percentage General Obligation Bonds Supported by Inter -Local Agreement Self -Supporting 100.00%
TABLE 12 - AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS
Date of Amount Previously Authorized
Authorization Purpose Authorized Issued But Unissued
01/20/79 Water and Sewer
01/17/81 Water and Sewer
Totals
$ 6,500,000 $ 784,507 $ 5,715,493
24,670,000 - 24,670,000
$ 31,170,000 $ 784,507 $ 30,385,493
(1) Such authorized but unissued debt may only be used for improvements within the previous boundaries of Park Central MUD, which was
annexed effective September 30, 2001.
TABLE 13 - OTHER OBLIGATIONS("
Financed Purchases
The City has entered into financing agreements for the acquisition of vehicles and equipment. Interest rates range from
1 % to 3% and will mature between fiscal years 2027 and 2029.
The annual requirements to amortize debt outstanding at year end for Governmental Activities were as follows:
Fiscal Year
Ended 9/30
Principal
Interest
Total
2025
$ 1,078,963
$ 132,794
$ 1,211,757
2026
1,123,847
102,631
1,226,478
2027
1,127,722
71,513
1,199,235
2028
807,367
40,895
848,262
2029
856,667
16,123
872,790
Total
$ 4,994,566
$ 363,956
$ 5,358,522
Leases
The City has entered into 61 lease agreements for the acquisition of Enterprise Fleet Management vehicles. Interest
rates range from 1% to 3% and the agreements will mature between fiscal years 2027 and 2028.
The annual requirements to amortize debt outstanding at year end for Governmental Activities were as follows:
Fiscal Year
Ended 9/30
Principal
Interest
Total
2025
$ 614,603
$ 27,368
$ 641,971
2026
620,128
10,004
630,132
2027
531,311
2,167
533,478
2028
52,436
377
52,813
Total
$ 1,818,478
$ 39,916
$ 1,858,394
PENSION FUND ... The City provides pension benefits for all of its full-time employees through the Texas Municipal
Retirement System ("TMRS"), a State-wide administered pension plan. The City makes annual contributions to the
plan equal to the amounts accrued for pension expense.
OTHER POST -EMPLOYMENT BENEFITS ... In addition to pension benefits, the City administers a single -employer
defined benefit health care plan. The plan provides postretirement health care benefits to eligible retirees and their
spouses. The City made changes to its retiree health insurance plan for employees who retire on or after January 1,
2011. Employees who retired on or before December 31, 2010 are "grandfathered" under a prior plan. Employees
retiring on or before December 31, 2010 are allowed to remain in the health insurance plan at approximately 30% of
the expected under age 65 cost or 75% of the expected over age 65 costs. These costs (a.k.a. retiree contribution rates)
are calculated separately for retirees not eligible for Medicare (under age 65) and retirees eligible for Medicare (over
age 65). Employees retiring on or after January 1, 2011 contribute a tiered percentage of the retiree contribution rates
based upon their years of City service at retirement.
The percentage ranges from 50% for retirees with at least 30 years of City service to 100% for retirees with less than
20 years of City service. Employees hired on or after November 1, 2010 are required to contribute 100% of the retiree
contribution rates upon retirement. Under the 2011 Plan, participants and their dependents at the time of termination
are eligible for the City's medical plan (including prescription drugs) after termination of City employment if they
had medical coverage in the City's group plan immediately prior to termination and meet the applicable Texas
Municipal Retirement System (TMRS) or Firemen's Relief & Retirement Fund (FRRF) criteria to receive a monthly
pension. Eligible retirees, disabled participants and spouses can continue coverage in the City's retiree benefits
program for life. Eligible children can continue through age 26.
The City finances this program on a pay-as-you-go basis. As of September 30, 2018, the City had 186 retirees
participating in the plan. The City had a net cost of $3,266,903 during the fiscal year ended September 30, 2018. As
of December 31, 2013, the Actuarial Accrued Liability of the Retiree Health Insurance Program was $19,970,527.
During fiscal year 2011, the City established an OPEB trust fund and has since contributed $3,000,000 to that fund.
(For more information regarding the plan see the Notes to the Financial Statement, Note V. Other Information C.
Retiree Health Insurance Program and Exhibit 14 at the end of the notes.)
In 2016, the City made significant changes to its single -employer defined benefit health care plan. These changes
included revisions to the assumptions underlying their actuarial valuations. Those changes significantly reduced the
City's unfunded actuarial accrued liability (the "UAAL"). This UAAL reduction was primarily due to a plan change
impacting Medicare eligible retirees. During fiscal year ended 2016, the City changed administrators and balanced the
portfolio. Toward the end of fiscal year 2016, the City made another change, moving coverage to a Medicare
Advantage Plan through Blue Cross Blue Shield. With these changes, the City's UAAL will be reduced from $27
million to $5 million and the annual required cost will be reduced from $2.2 million to $600,000, with coverage to
retirees remaining substantially equal to or better than the previous plan at similar cost.
FINANCIAL INFORMATION
TABLE 14 - CHANGES IN NET ASSETS
Revenues
Program Revenues:
Charges for services
Operating grants
Capital grants
General Revenues:
Ad valorem taxes
Industrial district payments
Franchise taxes
Sales tax
Investment earnings
Miscellaneous
Total Revenues
Expenses
General government
Culture and recreation
Public safety
Community development
Health and welfare
Public transportation
Public works
Interest on long-term debt
Total Expenses
For Fiscal Year Ended September 30,
2024 2023 2022 2021 2020
$ 2,339,019 $ 1,373,350 $ 2,339,171 $ 2,538,465 $ 2,433,943
11,521,254 6,938,014 11,438,506 15,570,630 13,899,700
13,780,610 12,206,842 1,869,003 4,242,540 5,595
24,201,068
25,651,375
25,141,477
23,438,319
30,604,396
28,827,547
33,272,431
34,372,873
11,461,218
10,171,363
10,588,507
8,690,160
18,008,352
17,110,189
16,555,875
15,204,691
4,635,323
6,287,481
855,811
68,501
2,913,716
2,566,205
3,667,365
3,985,966
$ 119,464,956
$ 111,132,366
$ 105,728,146
$ 108,112,145
$ 20,936,668
$ 20,810,975
$ 17,225,213
$ 21,592,478
8,957,108
9,789,671
6,817,065
6,682,451
38,789,326
46,012,264
31,176,765
35,388,810
3,815,450
16,175,876
3,366,387
4,568,256
6,081,187
5,994,823
4,694,658
5,404,677
3,053,362
3,464,996
10,636,973
7,396,959
22,364,247
10,615,687
8,911,480
10,448,831
2,514,433
2,190,510
1,853,664
1,491,645
$ 106,511,781
$ 115,054,802
$ 84,682,205
$ 92,974,107
24,083,197
31,000,321
8,734,643
14,327,107
855,112
2,300,973
$ 97,640,591
$ 14,261,996
6,124,273
36,722,942
8,841,182
5,397,477
2,873,955
13,444,809
1,312,452
$ 88,979,086
Increases (decreases) in net
assets before transfers $ 12,953,175 $ (3,922,436) $ 21,045,941 $ 15,138,038 $ 8,661,505
Transfers 6,649,535 8,834,753 11,442,577 6,298,748 6,744,639
Increases in net assets $ 19,602,710 $ 4,912,317 $ 32,488,518 $ 21,436,786 $ 15,406,144
Net assets - beginning of year 127,476,309 122,563,992 90,075,474 68,638,688 61,996,974
Prior Period Adjustment (1,414,970) - - - (8,764,230)
Net assets - end of year $ 145,664,049 $ 127,476,309 $ 122,563,992 $ 90,075,474 $ 68,638,688
TABLE 14A - GENERAL FUND REVENUES AND EXPENDITURES HISTORY
Revenues:
Taxes
Industrial district payments
Licenses and permits
User fees
Fines and forfeitures
Intergovernmental
Interest revenue
Miscellaneous
Total revenues
Expenditures:
General government
Culture and recreation
Public safety
Health and welfare
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Sale of Capital Assets
Insurance Recoveries
Proceeds of Debt Issuance
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning of year
Prior period adjustment
F and balance, end of year
For Fiscal Year Ended September 30,
2024
2023
2022
2021
2020
$ 43,475,548
$ 41,131,316
$ 42,020,953
$ 37,076,780
$ 35,116,044
30,604,396
28,827,547
33,272,431
34,372,873
31,000,321
629,889
737,282
1,028,258
1,090,815
909,341
1,300,972
290,797
603,771
322,271
326,660
90
3,003
225,046
591,470
622,406
124,011
49,402
131,343
170,576
144,928
1,344,304
1,049,983
224,452
57,067
361,321
1,787,824
274,999
991,573
610,583
452,693
$ 79,267,034
$ 72,364,329
$ 78,497,827
$ 74,292,435
$ 68,933,714
$ 17,661,782
5,616,860
36,615,733
1,957,266
8,202,615
1,474,601
$ 71,528,857
7.738.177
$ 17,300,320
6,194,062
36,376,696
1,797,621
8,671,455
$ 70,340,154
2,024,175
$ 17,037,626
$ 14,396,028
$ 12,367,243
5,494,052
5,006,644
4,751,982
35,158,606
33,589,366
32,675,581
1,765,705
3,008,680
2,921,957
8,715,985
9,753,673
9,391,534
-
138,281
-
$ 68,171,974
$ 65,892,672
$ 62,108,297
10,325,853
8,399,763
6,825,417
$
2,970,872
S
2,925,572
$
5,300,314
$
5,973,081
$
7,048,995
(16,268,478)
(10,674,366)
(12,546,500)
(18,209,934)
(11,501,470)
791,050
128,135
289,184
2,064,394
405,098
163,427
504,441
445,708
98,309
-
_
_
_
-
135,165
$ (12,343,129)
$
(7,116,218)
$
(6,511,294)
$
(10,074,150)
$
(3,912,212)
$
(4,604,952)
$
(5,092,043)
$
3,814,559
$
(1,674,387)
$
2,913,205
$
30,267,641
$
35,359,684
$
31,545,125
$
33,219,512
$
30,306,307
$
25,662,689
$
30,267,641
$
35,359,684
$
31,545,125
$
33,219,512
TABLE 15 - WATERWORKS AND SEWER SYSTEM CONDENSED STATEMENT OF OPERATIONS
For Fiscal Year Ended September 30,
2024
2023
2022
2021
2020
Operating Revenues:
Charges for Services
$ 38,345,144
$ 35,791,812
$ 31,625,792
$ 29,975,103
$ 26,849,587
Interest Revenue
673,249
(731,918)
142,948
(147,561)
183,965
Miscellaneous
26,661
70,716
15,230
224,999
26,013
Total Operating Revenues
$ 39,045,054
$ 35,130,610
$ 31,783,970
$ 30,052,541
$ 27,059,565
Operating Expenses:
Personnel Services
$ 11,957,203
$ 13,836,515
$ 10,577,151
$ 9,394,857
$ 10,573,308
Other Operating Expenses
18,752,948
20,563,281
16,978,785
10,136,356
9,244,425
Loss on Uncollectible Accounts
-
-
-
157,747
Total Operating Expenses
$ 30,710,151
$ 34,399,796
$ 27,555,936
$ 19,531.213
$ 19,975,480
Total Operating Income
$ 8,334,903
$ 730,814
$ 4,228,034
$ 10,521,328
$ 7,084,085
TABLE 16 - MUNICIPAL SALES TAX HISTORY
The City has adopted the Municipal Sales and Use Tax Act, VATCS, Tax Code, Chapter 321, which grants the City
the power to impose and levy a 1 % Local Sales and Use Tax within the City; the proceeds are credited to the General
Fund and are not pledged to the payment of Bonds. Collections and enforcements are effected through the offices of
the Comptroller of Public Accounts, State of Texas, who remits the proceeds of the tax, after deduction of a 2% service
fee, to the City monthly.
Fiscal
Street
Year
City's Sales
Repair and
EDC Sales
% of
Equivalent of
Ended
And Use
Maintenance
and Use
Total
Ad Valorem
Ad Valorem
Per
9/30
1.000%
0.125%
0.500%
Collected
Tax Levy
Tax Rate
Capita
2020
$ 12,944,920
$ 1,385,805
$ -
$ 14,330,725
65.26%
$ 0.5168
$ 263
2021
13,231,135
378,331 (�)
5,763,975 �
19,373,441
82.15%
0.6506
365
2022
14,826,005
-
7,316,392
22,142,397
90.64%
0.4404
265
2023
14,911,307
7,455,834
22,367,141
88.62%
0.3878
263
2024
15,895,046
-
7,818,973
23,714,019
86.26%
0.3878
285
(1) The Street Repair and Maintenance sales tax of 0.125% was eliminated December 2020.
The current sales tax breakdown for the City is as follows:
Economic and Community Development
0.500%
County Sales and Use Tax
0.500%
City Sales and Use Tax
1.000%
State Sales and Use Tax
6.250%
Total
8.250%
TABLE 17 - CURRENT INVESTMENTS
As of January 31, 2025, the City's investable funds were invested in the following categories:
Market
Value
Bank Deposits
$ 60,385
Texas Local Government Investment Pool (Tex Pool)
38,512,096
Texas Class
29,740,713
TEXSTAR
26,506,559
$ 94,819,753