DeKalb’s Ratio of Debt Service to General Fund Expenditures

Once again I am pulling from DeKalb’s Debt Management Policy. This time it’s a limit on debt service expenditures as a percentage of General Fund expenditures.

3. Ratio of Annual Debt Service to General Fund Expenditures
The formula for this computation is annual debt service expenditures divided by General Fund expenditures (excluding certain interfund transfers). The City shall not exceed 10% of General Fund expenditures for annual debt service.

And it does not. DeKalb’s percentage of GF debt service runs no more than 5% of total GF annual expenditures (range is roughly $1.4 to $4.4 million) and often less.

However, there are more budgets than just the General Fund budget, and a lot more long-term debt than just bonded debt. TIF debt service typically runs $2 to $3 million annually. We also have capital leases, an Illinois Environmental Protection Agency loan, compensated absences liabilities, Other Post Employment Benefits (OPEB) liabilities, pension liabilities, money Due to Other Governments (school district) and are still paying on the 2003 Early Retirement Incentive termination benefits.

So I would say that ol’ Number 3 is of some value, but incomplete.

Previous debt policy posts:

City of DeKalb’s Self-Imposed Bonded Debt Limit

DeKalb’s Limit on Per Capita Debt