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Debt Service & Financial Obligations <br />The following pages detail the City's financial <br />obligations highlighting 2004 expenditures and <br />term schedules. <br />The City's obligations can be categorized in four <br />different areas: utility improvements, facility <br />improvements, golf course and sales tax. The <br />utility improvements are funded through tap fees <br />and are maintained at a level that provides <br />adequate debt service coverage. Tap fees are <br />adjusted for inflation annually and may be <br />periodically adjusted to ensure all obligations can <br />be met and operations maintained. The golf <br />course debt is funded through user fees. The <br />facility improvements debt is for the construction <br />of a new library as approved by the voters at the <br />November 2003 election. The bond issue to fund <br />this project will be issued in 2004. The numbers <br />included in the following schedules are estimates. <br />The sales tax revenue bonds require funds to be <br />maintained throughout the life of the bonds and <br />are paid through a 1% sales tax. <br />The City Council has the power to contract <br />indebtedness on behalf of the City by borrowing <br />money or issuing bonds to carry out the objectives <br />or purposes of the City. Pursuant to the Cit's <br />Charter, no debt can be created which at any time <br />exceeds three percent (3%) of the City's statutory <br />actual value, as determined by the County <br />Assessor, except for debt incurred for supplying <br />water. The City's legal debt limit is currently <br />calculated as follows: <br />Calculation of Legal Debt Limit Available <br />2003 Actual Value <br />Debt Limit - 3% of Actual Value <br />Total amount of general obligation <br />Debt outstanding applicable to limit <br />Net Debt limit available <br />19 <br />$ 2,658,651,410 <br />79,759,542 <br />2,020,000 <br />S 77,739,542 <br />