Page 468 - FY 2021-22 Proposed Budget

Debt and Debt Service Requirements

City Debt Policy

Exhibit 7 below illustrates the City’s debt service in relation to General Fund
receipts and demonstrates compliance with the City’s debt management
policies.

EXHIBIT 7
Ratio of Debt Service to General Fund Receipts

16%
14%

12%

10%
8%

6% 5.43% 5.54% 5.57% 5.00% 4.97%
3.64% 3.54% 3.42%
4% 2.94% 3.11%
2%

0%
FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22

Non-Voter Approved Debt Cap Non-Voter Approved Debt Total Debt Total Debt Cap

Note: FY 2017-18 to FY 2019-20 ratios are based on actual General Fund receipts. FY 2020-21 and FY 2021-22 ratios are based on
estimated and projected receipts.

The City’s debt policy established maximum levels for voter and non-voter
approved debt. The maximum debt service level for non-voter approved debt
is not to exceed six percent of General Fund revenues (with certain
exceptions). As you can see, the City has managed its debt issuance very
conservatively, with debt service well below the policy limits. Based on the
current ratio of debt service to total projected receipts in 2020-21, the City
has the capacity to issue additional non-voter approved debt with an annual
debt service requirement of up to $191.5 million or 3.06 percent of General
Fund receipts. Assuming long term debt at five percent interest, this would
equate to approximately $3 billion in additional debt capacity.

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