The City maintains a debt policy that outlines the general framework for planning and reviewing debt proposals. The City does not issue debt to finance ongoing operations. Bond proceeds are limited to financing the costs of planning, design, land acquisition, buildings, permanent structures, attached fixtures or equipment, and movable pieces of equipment, such as fire engines, or other costs as permitted by law. Utility revenue bond proceeds may be used to establish a debt service reserve as allowed by State law. Acceptable used of bond proceeds can be viewed as items which can be capitalized.
In Michigan, State law indicates that the City can not issue general obligation bonds in excess of 10% of the State Equalized Value (SEV). The City's debt limit as of June 30, 2023 is $942 million and of the debt held by the City only $106 million of that debt is subject to this limitation, which equates to approximately 1.13% of the total SEV. Other debt which is repaid from dedicated financing sources does not count against the 10% SEV limit. Total City debt (general obligation and all others) totaled $287 million as of June 30, 2023.
