RES 2025-17 Debt Financing Plan, Tax Rate Goal FY26, Capial Improvement Program FY26-31 TOWN OF TROPHY CLUB, TEXAS
RESOLUTION NO. 2025-17
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF
TROPHY CLUB ESTABLISHING THE DEBT FINANCING PLAN AND
TAX RATE GOAL FOR THE FISCAL YEAR 2026 BUDGET AND THE
FISCAL YEAR 2026-2031 CAPITAL IMPROVEMENT PROGRAM; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the Town of Trophy Club, Texas (the "Town"), recognizes the
importance of managing its fiscal responsibilities to promote sustainable growth and
long-term financial stability for the community; and
WHEREAS, debt financing is an essential strategy for raising capital to invest in
critical infrastructure projects, including road repair and replacement, sidewalk
replacement projects, and other infrastructure and facility needs that are vital to the
Town's continued development and quality of life; and
WHEREAS, by responsibly issuing bonds and other forms of debt, the Town can
smooth the budgetary impacts and maintain stable tax rate levels over time, ensuring
that necessary projects are completed without undue financial strain on current or future
budgets; and
WHEREAS, the Town Council recognizes the need to establish a debt financing
plan in conjunction with the annual budget and Capital Improvement Program to ensure
that the necessary capital for funding these projects is both budgetarily achievable and
sustainable within the Town's desired long-term tax rate goal; and
WHEREAS, the Town's "Debt Financing Plan and Tax Rate Goal", as detailed
in the attached Exhibit A, provide a comprehensive approach to leveraging future
revenues to address current infrastructure needs, and balancing immediate
expenditures with long-term fiscal responsibility.
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE
TOWN OF TROPHY CLUB, TEXAS, THAT:
Section 1. The facts and recitals set forth in the preamble of this Resolution are
hereby found to be true and correct.
Section 2. The Town Council hereby establishes the debt financing plan for the
Fiscal Year 2026 Budget and the Fiscal Year 2026-2031 Capital Improvement
Program, as outlined in the attached Exhibit A, to guide the Town's financial decisions
regarding capital investments.
Section 3. The Town Council adopts the tax rate goal for the Fiscal Year 2026
Budget and the Fiscal Year 2026-2031 Capital Improvement Program, as outlined in
RESOLUTION 2025-17 PAGE 3
EXHIBIT A
RESOLUTION 2025-17 PAGE 2
the attached Exhibit A, as part of its commitment to maintaining fiscal responsibility and
ensuring the Town's financial health.
Section 4. The Town Manager is hereby directed to implement the "Debt
Financing Plan and Tax Rate Goal" as part of the budgetary process for Fiscal Year
2026 and to periodically report progress to the Town Council.
Section 5. This Resolution shall take effect from and after its date of passage
in accordance with law.
PASSED and APPROVED by the Town Council of the Town of Trophy
Club, Texas on this 8TH day of September 2025.
an Mayor
ROp
ATTEST: ,
aRy ..
cJa vv
Tammy Dixo , Town Secretary
APPROVED TO AS FORM:
Dean T ttorney
Resolution No. 2025-17
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DEBT
FINANCING PLAN
a TAX RATE GOAL
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F Y 2 6 DEBT Resolution No. 2025-17
FINANCING PLAN &
TROPHY CLUB TAX RATE GOAL
Debt financing remains a vital tool for the Town of Trophy Club to
responsibly manage fiscal responsibilities and support community growth.
By strategically issuing bonds or other forms of debt, the Town can secure
the capital needed to invest in critical infrastructure projects, ensuring long-
term sustainability and improved quality of life for residents.
A carefully developed debt financing plan helps the Town smooth budgetary
impacts and maintain stable tax rates over time, enabling essential projects
to move forward without delays or funding gaps. This approach also allows
the Town to leverage future revenues to meet current needs, striking the
right balance between immediate investments and long-term financial
stability.
Each year, in coordination with the annual budget and Capital Improvement
Plan (CIP) process, the Town Council adopts a debt financing plan that
ensures capital projects — such as road repair and replacement, sidewalk
improvements, and other infrastructure or facility enhancements — are
achievable and sustainable within the Town's long-term tax rate objectives.
Details on the specific projects anticipated to be funded through general
obligation bonds or certificates of obligation are outlined in the Capital
Improvement Plan. The FY 2025-26 debt financing plan is summarized in
the following four sections.
• Review of existing debt
• Future debt borrowing amounts, including amount and timing
• Debt issuance structure, including term and expected interest rates
• Debt burden goals
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F Y 2 6 DEBT Resolution No. 2025-17
FINANCING PLAN F1
TROPHY CLUB TAX RATE GOAL
Review of Existing Debt
• The Town of Trophy Club currently has 9 outstanding bond issuances,
the most recent being Series 2025. Under the current six-year Capital
Improvement Plan, two of these issuances will be fully repaid. In FY
2025, total debt service payments (including principal and interest)
amount to $2,938,796. The Town's outstanding debt obligation for FY
2026 is projected at $3,080,978. All remaining debt is scheduled to be
fully repaid by FY 2043.
Future Debt Borrowing Amounts
I • Projecting future debt levels is essential to maintaining a long-term,
sustainable debt financing strategy. The Town's Capital Improvement
Program outlines anticipated debt issuance amounts, with the FY
2026-2031 plan projecting new issuances in FY 2027 and FY 2030. In
addition, borrowing schedules for the next 20 years are included to
provide a clear picture of the Town's long-range financing needs.
ISSUANCE
FISCAL YEAR AMOUNT
FY 2027 $5,585,000
FY 2030 $7,000,000
FY 2032 $7,000,000
FY 2035 $7,000,000
FY 2038 $7,000,000
FY 2040 $7,000,000
FY 2042 $9,000,000
FY 2044 $7,000,000
FY 2046 $9,000,000
On average, the Town of Trophy Club anticipates borrowing $7,000,000
every two to three years as depicted in the chart above.
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F Y 2 6 DEBT Resolution No. 2025-17
FINANCING PLAN Et
TROPHY CLUB TAX RATE GOAL
Debt Issuance Structure
• Certain assumptions are made regarding the structure and interest
rates of debt to be issued. Specific details will be prepared by the
Town's municipal advisors prior to each issuance. For the purpose of
forecasting, the following assumptions are made as of the approval
date of this plan, which should be verified against results based on the
condition of the debt market at the time of issuance.
DEBT ANTICIPATED ANTICIPATED
ISSUANCE MATURITY INTEREST RATE
iimmimimmemmonlisimmomminwnmi
FY 2027 15 years 5.00%
FY 2030 15 years 5.00%
FY 2032 15 years 5.00%
FY 2035 15 years 5.00%
FY 2038 15 years 5.00%
FY 2040 15 years 5.00%
FY 2042 10 years 5.00%
FY 2044 10 years 5.00%
FY 2046 10 years 5.00%
Debt Burden Goals
Over time, the Town of Trophy Club aims to meet the following debt burden
goals, ensuring the overall debt financing plan is structured to minimize
budgetary impacts and maintain stable tax rates:
• Maintain manageable debt levels: Annual debt obligations supported by
the Town's Interest & Sinking (I&S) tax rate should not exceed 0.105%
of the Town's total taxable valuation.
• Promote stability through laddered payments: Structure debt payments
to create a relatively level and predictable annual debt burden over time.
• Adjust for growth: Modify future annual debt obligations to reflect
anticipated increases in the Town's total taxable valuation.
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F Y 2 6 DEBT Resolution No. 2025-17
* FINANCING PLAN Et
TROPHY CLUB TAX RATE GOAL
Debt Burden Goals (Continued)
• Anticipated future borrowings should be projected for the term of current
outstanding debt to ensure that future borrowing needs can be achieved
without exceeding the Town's tax rate goal.
• If possible, the Town's long-term goal is to minimize the amount of
taxpayer dollars spent on interest. To that end, the Town should evaluate
opportunities to shorten maturities from 15 years to 10 years when debt
burden goals can still be maintained. Forecasts indicate that beginning in
2042, 10-year maturities are expected to be achievable.
• As the Town begins to layer debt every two to three years, the annual
debt service requirement will grow from its current fiscal year amount of
$2.9 million to approximately $4.5 million annually in the 15- to 17-year
horizon. The I&S rate is expected to remain flat as taxable valuation
grows in Trophy Club during that time. As current debt is retired, the
approximate annual debt service amount, including principal and interest,
is expected to stabilize around $4 million annually.
• Infrastructure such as roads, sidewalks, medians, storm sewers, facilities,
and parks that have useful lives extending beyond 15 years are to be
maintained, repaired, replaced, or added new through debt financing
with a maximum term of 15 years.
• Smaller equipment, vehicles, and other capital assets that have a useful
life of less than 10 years are to be debt financed with a maximum term
of 5 years.
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F Y 2 6 DEBT Resolution No. 2025-17
FINANCING PLAN a
TROPHYCLUBTAX RATE GOAL
Tax Rate Goal
By Texas law, the Town of Trophy Club may fund its debt obligations
through an Interest & Sinking (I&S) tax rate, which is levied on all taxable
property within the Town. It is the Town's intent to pay all eligible debt
service exclusively through this I&S rate.
Maintaining an appropriate I&S tax rate is essential to sustaining the
Town's capital infrastructure. Due to operating budget limitations, it is not
feasible to make large adjustments to cover costly infrastructure needs
such as roads, sidewalks, storm sewer systems, medians, and parks. To
address this, Town staff annually presents prioritized infrastructure project
lists to the Town Council with the goal of funding these improvements
through the I&S rate.
In FY 2025, the Town's I&S tax rate is $0.099427 per $100 of taxable
valuation. For FY 2026, the rate is $0.1031. The Town's long-term goal is to
maintain a level I&S tax rate of $0.105 per $100 of taxable valuation. From
the FY 2026 rate, only $0.0019 remains to reach this target. Each year
during the budget process, staff will present options for maintaining the I&S
tax rate within the $0.105 limit.
To avoid raising the overall tax burden on residents, the primary strategy is
to offset any I&S tax rate increases with equal reductions in the
Maintenance and Operations (M&O) voter-approval rate, as established by
Senate Bill 2 (2019). For forecasting purposes, the Town's debt financing
plan assumes an annual taxable valuation growth rate of 3.00% through FY
2040, followed by 0.00% growth thereafter. These projections are reviewed
against actual taxable valuation growth at the time of issuance.
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F Y 2 6 DEBT Resolution No. 2025-17
* FINANCING PLAN 5
TROPHYCLUBTAX RATE GOAL
Tax Rate Goal (Continued)
For FY 2026, the Town's total taxable valuation is $2,616,368,183. At a
3.00% annual growth rate, taxable valuation is projected to reach $3 billion
by FY 2031.
As the Town works to maintain an I&S tax rate of $0.105 per $100 of taxable
valuation, it will employ two primary strategies to meet eligible debt targets:
• Debt Defeasance:
a. If no capital projects — including equipment or vehicles necessary for
municipal operations — are identified, the Town will pursue debt
defeasance to reduce outstanding obligations and maintain the I&S
tax rate goal of $0.105.
• Short-Term Debt for Capital Needs:
b. If capital projects or equipment and vehicles essential for municipal
operations are identified and eligible for debt financing, the Town will
consider short-term debt options of no more than five years to fund
these items.
ANTICPATED
DEBT ISSUANCE ANTICIPATED ANTICIPATED TAX RATE
ISSUA_ CE} - A OUNT .MATURITY INTERES RA - I&S
FY 2027 $ 5,585,000 15 years 5.00% 0.1032
FY 2030 $ 7,000,000 15 years 5.00% 0.1031
FY 2032 $ 7,000,000 15 years 5.00% 0.1037
FY 2035 $ 7,000,000 15 years 5.00% 0.1038
FY 2038 $ 7,000,000 15 years 5.00% 0.1037
FY 2040 $ 7,000,000 15 years 5.00% 0.1023
FY 2042 $ 9,000,000 10 years 5.00% 0.0879
FY 2044 $ 7,000,000 10 years 5.00% 0.1031
FY 2046 $ 9,000,000 10 years 5.00% 0.1032
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F Y 2 6 DEBT Resolution No. 2025-17
* FINANCING PLAN a
TROPHY CLUB TAX RATE GOAL
Conclusion
To conclude, the FY 2026 Debt Financing Plan and Tax Rate Goal provides a
clear framework to ensure Trophy Club's infrastructure needs are addressed
in a fiscally responsible manner. By balancing strategic debt issuance with
careful management of the I&S tax rate, the Town can fund essential
projects, preserve long-term financial stability, and continue enhancing the
quality of life for residents. This plan reaffirms the Town's commitment to
sustainable growth and prudent financial management.
7 08/26/25