FORNEY, Texas — The City of Forney is expected to see $915,613 in interest savings on 2008 roadway construction bonds after the Forney City Council approved a resolution on Tuesday night committing accelerated payments to early bond redemption.
In 2008, the City of Forney entered into a Pass-Through Toll project agreement with the Texas Department of Transportation (TxDOT) to fund major road improvements on three state-owned roadways within the city limits — Farm-to-Market (FM) 548 at U.S. Highway 80, FM 741, and FM 740. Bonds for the projects were approved by voters in 2006.
According to the agreement, TxDOT guarantees a minimum annual payment to the City of Forney of $2,009,570 and provides an increase in the annual payment, up to a maximum of $,019,140 annually, based on increased traffic counts. Any amount received over the minimum payment is considered an accelerated payment, according to the City of Forney.
"The bonds were structured so that some of the bonds would be eligible for early redemption and allow the City to pay off this obligation in a shorter time frame thus recognizing considerable interest savings," read Tuesday night's council agenda.
This year, the City of Forney received the maximum pass-through toll payment from TxDOT and, with council approval of the resolution on Tuesday night, committed the $2,005,000 to early bond redemption — the move expected to save $915,612 in interest.
In 2012, the then-city council members passed a similar resolution to commit the accelerated portion of the pass-through toll payment from TxDOT to early retirement of those bonds. The city received its first partial reimbursement payment in May 2013.
Every year since then, the Forney City Council has passed similar resolutions which amounted to $17,035,000 in early bond redemptions and an estimated $8,575,963 in interest savings.