General Obligation Bonds (G.O.’s) are used to finance a variety of public projects and require voter approval. Certificates of Obligations (C.O.’s) do not require voter approval and, though used largely for the same projects as General Obligation Bonds, are ordinarily sold to finance smaller, less expensive, projects which tend to have shorter pay-out periods on the debt. General Obligation Bonds, as well as Certificates of Obligation, are backed by the full faith and credit of the City and are paid for from property tax receipts. Revenue Bonds are payable from specific sources of non-tax revenue and do not affect the property tax rate. Coverage Ratios of Revenue Bonds will always be in compliance with the minimum coverage ratio required by the revenue bond ordinances. It shall be the goal of the City to achieve a budgeted coverage ratio of 1.60.
The City’s practice is to fund capital improvement projects on a “pay as you go” basis whenever possible. If a debt issue is required, then key factors such as an asset’s life and future debt payments will be considered carefully. Issues will not extend longer than an asset’s expected life. The City currently holds an AA- rating from Standard and Poor’s Corporation for both General Obligation and Revenue Bonds.