Frequently Asked Questions - Q26


Question:

You have made several references to the fact that taxpayers got to vote on only about 17%of the City’s unpaid long-term debt. How can that be?

Answer:

The approximately 17% that we did get to vote on authorizing are public improvement bonds (to be paid out of property taxes), generally for facilities used in those basic services rendered by the General Fund. The remaining 83% of the unpaid debt, which taxpayers did not get to vote on, included the following at the June 30, 2001 fiscal year end: (a) debt to also to be paid out of property taxes (commercial paper 5% and annexed water district bonds 1%); (b) debt to be paid out of Enterprise Funds’ revenues (water & sewer 45%, airport 19%, and convention center 8%); and (c) long-term water and sewer contracts payable 4%. Very disturbing is the growing tendency to substitute commercial paper for the public improvement bonds, thereby adding to the debt to be paid out of property taxes without the taxpayers getting to vote on it. Seriously compounding the growing long-term debt problem (increased 144% just since 1992) is that those advising the City on its finances are firms that profit from the City issuing more debt. This runs the risk of the City adding bricks and mortar while sacrificing the furnishing of services. Thus the need to pass this charter amendment, which will force the City to operate under a fiscal discipline which prioritizes all needs city wide, whether operating, capital or debt service.



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