Most City Debt Still Pension Related

Feeling that the City’s finances are in good enough shape, the Mayor has proposed a bond issue of $80 million to pay for capital needs in the City. Some members of Council say the time is not right, the amount is not right, etc. so it seems certain that the relative ease with which the operating budget passed might be absent from discussions over the capital budget.

As of year end 2010, the City had $633 million outstanding on its general obligation bonds. Nearly 40% of this is related to bonds 1998 A, B, and C which were "issued to fund the City’s pension fund" as noted by the Controller’s audit. There is $140 million outstanding on 2006 B which, with others the same year, was used to refund previous bonds. After those outstanding amounts are counted, what remains is $259 million (about 40% of the total) in various bond issues that date back to 1993.

In 1996 (the earliest historical number available on the Controller’s website) per capita debt was $1,507 and the ratio of debt to general governmental expenditures was a very low 9.33%. Last year the per resident amount was $2,058 and the debt to spending ratio was 14.80%, the lowest since the early to mid 2000s. Most of the past fifteen years per capita debt has hovered around $2,400 and the ratio of debt to spending around 18%. That’s why much of the future fiscal optimism of the City is predicated on the "debt cliff" when payments fall significantly, supposed to arrive somewhere around 2018.