25LINKBUDGET(FULL) - Flipbook - Page 95
City Of Plymouth 2024 / 2025 Budget
to the issuance of limited tax general obligation bonds, all alternative methods of
financing should have been investigated. Consideration should always be given to
provide a pledge of facility revenue to accompany the basic pledge of limited tax
revenues.
8.2
Limited tax general obligation bonds should only be issued under certain conditions:
8.2.a A project to be financed will generate positive net revenues, i.e., additional revenues
generated by the project will be greater than the debt service requirements. The net
revenues should be positive over the life of the bonds, and be positive each year if
possible. The city recognizes that net revenues may not be positive in the early years
of certain projects, but should be positive within a reasonable time period of five to
seven years. These calculations will be made on a conservative basis so that the
potential for a long-term net decrease in general fund revenues is minimized.
8.2.b Matching fund monies are available which may be lost if not applied for in a timely
manner.
8.2.c Catastrophic conditions.
9. Debt Coverage
9.1
It is city policy that each utility or enterprise should provide adequate debt service
coverage. A specific factor is established by the City Commission that projected
operating revenues in excess of operating expenses less capital expenditures,
depreciation and amortization in the operating fund should be at least 1.2 times the
annual debt service costs. An example of the debt coverage calculation follows:
Debt Coverage Example:
Operating Revenues
Operating Investment Income
Total Operating Revenue
$13,903,166
751,270
$14,654,436
Operating Expenses
Less: Depreciation and Amortization
Net Expenses
$11,644,355
1,155,004
$10,489,351
Net Revenue Available for Debt Service
$4,165,085 (1*)
Principal
Interest
$1,520,000
1,963,116
$3,483,116 (2*)
Total Debt Service
Debt Coverage Ratio (1* divided by 2*)
25BDS-01-DMP.DOCX
TABLE OF CONTENTS
1.19
DS 90
