(a). Compute the legal debt margin for the City of Brandon given the following information regarding its bonded debt.
The legal debt limit is 10 percent of total assessed valuation. [Note: The City has no liability for the revenue bonds or the industrial development bonds.]
Bonds outstanding and bonds authorized are:
Face Amount
Description Authorized Outstanding
General obligation street construction 12,000,000 12,000,000
Special assessment sidewalk construction 2,000,000 2,000,000
General obligation park acquisition 2,000,000 -0-
Water Utility Fund revenue 5,000,000 5,000,000
Industrial development revenue 6,000,000 6,000,000
Total assessed valuation of property within the City of Brandon is $200,000,000.
(b). What provision in a bond indenture or bond ordinance is necessary for long-term debt to be classified as a general obligation? Are all obligations properly reported as general long-term debt evidenced by bonds or notes? If not, give several examples of general long-term debt not evidenced by bonds or notes.