Frequently Asked Questions - Q16


Question:

By capping the total revenues of the City, the proposed charter amendment lumps the general operations of the City in with the water and sewer, airport and convention center operations. Aren’t those three special types of operations conducted under separate legal entities, and wouldn’t the proposed charter amendment therefore create problems with the debt issued by those three separate types of City operations and create other legal problems?

Answer:

No. Each of those three special types of operations are separately accounted for and financially reported on due to generally accepted governmental accounting standards. However, the assets of each are owned by the City and their liabilities are owed by the City, and, therefore, all three entities are included in the total combined financial statements of the City. Each of the three types of operations has particular legal restrictions on the use of its revenues and the revenue sources available for servicing its debt. Each of the three types of operations is covered in Q & A 18 through 23. One reason the three types of operations are included in the overall revenue cap is to discourage as much as possible any financial gamesmanship, such as the notorious transfers since the 1990s of water and sewer receipts to underwrite the City’s general operations.



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