Question
In preparation for a proposed bond sale, the city manager of the City of Appleton requested that you prepare a statement of legal debt margin
In preparation for a proposed bond sale, the city manager of the City of Appleton requested that you prepare a statement of legal debt margin
and a schedule of direct and overlapping debt for the city as of December 31, 2016. You ascertain that the following bond issues are outstanding on that date: |
Convention center bonds | $ | 2,400,000 |
Electric utility bonds | 1,900,000 | |
General obligation serial bonds | 2,300,000 | |
Tax increment bonds | 1,500,000 | |
Water utility bonds | 700,000 | |
Transit authority bonds | 800,000 | |
You obtain other information that includes the following items: |
1. | Assessed valuation of real and taxable personal property in the city totaled $150,000,000. |
2. | The rate of debt limitation applicable to the City of Appleton was 5 percent of total real and taxable personal property valuation. |
3. | Electric utility, water utility, and transit authority bonds were all serviced by enterprise revenues. By law, such self-supporting debt is not subject to debt limitation. |
4. | The convention center bonds and tax increment bonds are subject to debt limitation. |
5. | The amount of assets segregated for debt retirement at December 31, 2016, is $2,200,000. |
6. | The citys residents are also taxed by Clyde County for 25 percent of school district and health services debt. The school district has $17,000,000 in outstanding bonds, while health services has $7,000,000 in debt. Finally, one-third of the $900,000 of regional library outstanding debt is paid by taxes assessed on Appleton residents. |
Prepare a statement of legal debt margin for the city as of December 31, 2016. |
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