Harris County at a Glance: Debt Obligations


Harris County (the County) is committed to transparency in every aspect of its operations and believes that financial transparency and accountability are critical components of good stewardship of taxpayer resources. It is our mission to be an independent and progressive organization that presents accurate, timely, understandable, and readily accessible information for the citizens of Harris County.


Through its “Transparency Star” program, The Texas Comptroller of Public Accounts recognizes local governments across Texas for going above and beyond in their transparency efforts. This is accomplished by providing citizens with clear and meaningful financial information not only by posting financial documents, but also through summaries, visualizations, downloadable data, and other relevant information.

Harris County Debt Information

Harris County issues a variety of long-term debt instruments in order to acquire and/or construct major capital facilities and equipment for governmental and business-type activities. These instruments include general obligation bonds, revenue bonds, and commercial paper.

General Obligation Bonds

General Obligation Bonds are direct obligations of the County with the County’s full faith and credit pledged toward the payment of these obligations and are issued upon approval by the public via an election. Debt service payments are primarily paid from ad valorem (property) taxes.

General Obligation Bonds provide funds for the acquisition and construction of major capital equipment, facilities, and infrastructure. The County has three classes of general obligation debt – Road Bonds, Permanent Improvement Bonds, and Flood Control Bonds. These General Obligation Bonds are direct obligations of the County with the County’s full faith and credit pledged toward the payment of these obligations and are issued upon approval by the public via an election. Debt service payments are primarily paid from ad valorem (property) taxes. General Obligation Bonds require the County to compute, at the time other taxes are levied, the rate of tax required to provide (in each year bonds are outstanding) a fund to pay interest and principal at maturity. The County is in compliance with this requirement.

Revenue Bonds

Revenue Bonds are generally payable from the pledged revenue generated by the respective activity for which the bonds are issued. The Toll Road Project has been financed with a combination of unlimited tax and senior lien revenue bonds, subordinate lien revenue bonds and commercial paper. Proceeds from these bonds, including the interest earned, are being used to finance the construction and the related debt service. The Senior Lien Revenue Bonds are payable from the revenues of the Toll Road. The Tax Bonds are secured by and payable from a pledge of the County’s unlimited ad valorem tax and also are secured by a pledge of and lien on the revenues of the Toll Road, subordinate to the lien of the Senior Lien Revenue Bonds.


Commercial Paper

Commercial paper is a general obligation of the County secured by ad valorem taxes for the purposes of financing various short-term assets and providing temporary construction financing for certain long-term fixed assets. The County commercial paper program totals $1.064 billion and consist of the following seven series:


Series Program Size Authorized to be used for
A-1 $100 million Technology improvements
B $40 million Parks and libraries
C $260 million Roads and bridges
D $200 million Construction of public works, purchase of automobiles and other vehicles, equipment and machinery, materials and supplies, professional services and other needs and purposes of the County
E-1 $200 million Toll road projects
E-2 $200 million Toll road projects
H $64 million Acquiring land, construction, maintenance and/or operations on behalf of the Flood Control District

The Series E-1 and E-2 do not relate to the County’s Series A-1, B, C, D or H commercial paper programs, which are secured by ad valorem taxes. The Series E-1 and E-2 are secured by Toll Road revenues.

 

Commercial Paper Ratings

As of January 11, 2018, the Commercial Paper ratings for the County, Flood Control District, and Toll Road are as follows:

 

 

Series Fitch Moody's S&P
A-1 F1+   A-1+
B F1+   A-1+
C F1   A-1+
D F1+   A-1+
E-1 F1+ P-1  
E-2 F1 P-1  
H F1+   A-1+

 

 

Bond Ratings

As of February 28, 2017, the bond rating services of the County, Flood Control District, and Toll Road are as follows:



Entity Fitch Moody's S&P
County AAA Aaa AAA
Flood Control District AAA Aaa AAA
Toll Road AA Aa2 AA-

 

Obligations rated Aaa for long-term debt and P-1 for short-term debt by Moody's Investors Service, Inc. are defined as having the highest quality, subject to the lowest level of credit risk.

 

Obligations rated AAA for long-term debt and A-1+ for short-term debt by Standard & Poor’s Ratings Service are the highest rating assigned by Standard & Poor’s. This rating indicates the obligor’s capacity to meet its financial commitments on the obligation are extremely strong.

 

Obligations rated AAA for long-term debt and F1+ for short-term debt by Fitch Ratings are used to denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

 

 

Total Outstanding Debt Obligations


Total outstanding debt obligations as of February 28, 2017 for the County are as follows:



      Fiscal Year 2017 Per Capita
General Obligation Bonds $2,205,277,874 $469
Revenue Supported Bonds $2,156,665,000 $459
Capital Leases Payable $7,735,769 $2
Total Outstanding Debt Obligations $4,369,678,643 $930

Note: Per Capita figures are based on the County’s 2017 estimated population of 4,700,000