(A) (1) Ohio Revised Code provides two debt limitations on general obligation debt that are directly based on tax (assessed) valuation, applicable to all municipal corporations, including the city.
(2) Direct debt limitations:
(a) The net principal amount of both voted and unvoted debt of the city, excluding "exempt debt", may not exceed 10½% of the total tax (assessed) valuation of all property in the city as listed and assessed for taxation.
(b) The net principal amount of unvoted debt of the city, excluding exempt debt, may not exceed 5½% of that valuation.
(B) (1) Additionally, provisions of the Ohio Constitution and the Ohio Revised code impose an indirect debt limitation.
(2) Indirect debt limitation: The city's ability to incur unvoted debt (whether or not exempt from the direct debt limitations) is limited in that all outstanding unvoted general obligation bonds of the combination of overlapping taxing subdivisions including the city resulting in the highest tax required for such debt charges in any year is ten mills or less per $1 of assessed valuation.
(C) The city will ensure that prior to any new debt issuance, the total existing general obligation debt as well as the projected new general obligation debt are within the direct and indirect debt limitations.
(D) Given that certain debt that the city issues is considered exempt from the direct and/or indirect debt limitations, a more conservative debt limitation guideline will be followed. That guideline, applied to income tax supported debt, provides the following:
(1) Of the 25% of income tax revenue that is dedicated to the Capital Improvement Tax Fund, the city will allocate 60% of the revenue to pay the debt service on capital improvements.
(2) Each year, as part of the annual update of the five-year CIP, the administration will account for existing debt service as well as anticipated debt service on proposed projects.
(a) Anticipated debt service will be calculated using conservative interest rate assumptions.
(3) Debt service supported by TIF Service Payments will have a 110% revenue to debt service coverage requirement.
(a) Revenues will include annual projected TIF Service Payments and uncommitted TIF fund balances.
(b) In the event the revenue to debt service coverage is less than 110%, then the shortfall will be reserved for from the income tax allocation described above. The maximum amount of debt service (including existing, TIF supported, and proposed new debt) shall not exceed 90% of the allocation of income tax revenue allocated to pay debt service.
(Ord. 31-16, passed 9-12-16; Am. Ord. 37-19, passed 8-26-19)