2004 Performance Based Budget - Laserfiche WebLink

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Under the Indiana Constitution and State Statute, the City's general obligation bonded debt issuances and debt issued by separate taxing units are subject to a legal limitation based upon 2% of total assessed value of real and personal property. Since Indiana's assessment statutes call for an assessed valuation of one-third of cost less depreciation, its general obligation debt limitation is one of the most conservative in the United States. As of December 31, 2003, the 2% debt limit was $18,505,824 based upon a total 9>925 million net assessed value of taxable property within the City. The debt margin, which represents the amount of additional debt that can be issued prior to reaching the 2% limit, was $9,412,500 for the Redevelopment Authority and $1,235,000 for the Civil City as of the end of 2003. That computation is also included in this section. The City's primary objective in debt management is to keep the level of indebtedness within its available resources while remaining below the 2% limit mentioned above. The necessity to incur debt in order to finance capital projects carries with it the obligation to manage the debt program effectively. As a result, the level of outstanding debt and the City's capacity to incur and repay additional debt requires careful examination on an ongoing basis. The balance between the need for a capital improvement and the ability to finance the associated expenditure (which includes the initial cost and any on;;oing operational costs) must always be determined. D-56