Johnson County welcomes you to our Debt Obligation webpage. It is our objective to provide the public with clear, understandable and searchable information regarding the county's debt obligations.
Many costs of county government are paid from monetary inflows collected during the approximate time period in which those monetary outflows occur. For example, property taxes, a major source of county inflows, are collected throughout the year, and they are therefore also available throughout the year to pay for routine operating needs such as employee salaries, supplies, office furnishings, etc.
However, from time to time the county must undertake high-dollar, multi-year projects for which it is impractical to pay from current financial resources. In such instances, the county may choose to issue long-term debt (1), a financing mechanism whereby investors loan the county money in return for the county’s promise to repay them their principal (2), plus interest (3), over an agreed-upon span of years. While some types of long-term debt can be issued at the discretion of the county’s Commissioners Court, other types require advance voter approval at a general election.
Common examples of projects that might be funded with long-term debt include:
a) The construction or major renovation of county facilities;
b) The building of, or major improvements made to, county roadways; and
c) A significant purchase of equipment.
In addition to issuing debt to fund long-term projects, the county from time to time also issues debt to retire existing debt when doing so decreases its future interest expense. The county works with an investment advisor to determine when such market opportunities exist.
It is important that taxpayers have a knowledge of the county’s long-term debt position and requirements because a portion of their property taxes is dedicated specifically to pay long-term debt principal and interest. Additionally, a single issuance of long-term debt can obligate the county to make payments over as many as twenty, or even thirty, years, so the county’s decisions to issue debt can have financial implications for its citizens for decades.
Johnson County publishes detailed information about its long-term debt yearly in its Comprehensive Annual Financial Report. In addition, this same debt information can be found on the State Comptroller’s website. Making this information available enhances citizens’ understanding of this important component of county finance.
Please view our debt information for details of the total outstanding debt obligations of the county, tax-supported debt obligations expressed total and per capita amounts.
Here are some definitions regarding debt:
(1) A “debt” is something owed by one person or organization to another – in this sense, a legal, contractual obligation to pay or return money.
(2) “Principal” is the amount of a debt, exclusive of interest [see 3), below]. For example, the county typically issues long-term bonds of $5,000.00 in principal - the “face value” amount it will repay to the investor who loans it money.
(3) “Interest” is the cost of money – in this sense, an amount paid in return for a loan, in return for being allowed the use of another person’s or organization’s money. Interest is generally calculated as a percentage of the related principal loaned.