Question

In preparation for a proposed bond sale, the city manager requested that you prepare a statement of direct and overlapping debt for the city as of December 31, 2014.  You determine that the following city bond issues are outstanding on that date:

Convention center bonds                                                               $8,800,000

Electric utility bonds                                                                        3,400,000

General obligation serial bonds                                                       9,000,000

Tax increment bonds                                                                       2,400,000

Water utility bonds                                                                          3,300,000

Transit authority bonds                                                                   2,600,000

Other information is as follows:

a. Electric utility, water utility, and transit authority bonds were all serviced by enterprise revenues.

b. Assets segregated for debt retirement total $1,200,000.

c. Another bond issue to be paid from general tax revenues has been approved by city tax payers in the amount of $2,000,000.

g. The city’s residents are also responsible for 25% of the county’s bonded debt of $30,000,000 and 30% of the school district’s bonded debt of $12,000,000.

Required:  prepare a statement of direct and overlapping debt

Answer 1

Statement Of Direct And Overlapping Debt

December 31, 2014 (Amounts in $)

Unit	General Obligation Bond	Estimated Percentage Applicable	Estimated Share of Overlapping Debt
City Direct Debt (As per note)	20200000	100%	20200000
County's bonded debt	30000000	25%	7500000
School district's bonded debt	12000000	30%	3600000
Total Direct And Overlapping Debt			31300000

Note : City Direct Debt

Conventional Center Bonds $ 8,800,000

General Obligation Serial Bond 9,000,000

Tax Increment Bond 2,400,000

Total City Direct Debt 20,200,000