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MD&A-14

City of Raleigh

Management’s Discussion and Analysis

Long-term debt.

At the end of the current fiscal year, the City had total general obligation bonds outstanding

of $304.3 million. The remainder of the City’s debt represents revenue bonds ($617.4 million) and installment

financing agreements ($670.0 million – installment notes, certificates of participation, limited obligation bonds,

etc.) secured solely by specified revenue sources and property.

State statute limits the amount of general obligation debt a governmental entity may issue to 8.0% of the total

assessed value of taxable property. The City’s outstanding net debt of $1,139.7million

(Legal Debt Margin Information

statistical schedule)

is significantly less than the current debt limitation of $4,298.0 million.

Raleigh continues to benefit from outstanding credit ratings as evidenced by the aforementioned placements,

earning the highest general obligation and revenue bond credit ratings and excellent certificate of participation

and limited obligation bond ratings from all three major rating agencies.

Additional discussion concerning the outstanding debt of the City has already been addressed in the Financial

Highlights section of this report. Further information on the City of Raleigh’s long-term debt can be found in the

notes to the financial statements on pages 39 – 51 of this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

As noted in the above discussion and analysis, the financial results for the year ended June 30, 2016 continue to

reflect positive trends in the local economy. The improvements in property tax, sales tax and certain growth related

revenues are projected to continue for fiscal year 2016-17 and, combined with ongoing diligent management

of City expenses, should result in the City again meeting our fund balance goals and maintaining our AAA/Aaa

general credit ratings. Through these budget plans, City management and staff remain committed to providing

Raleigh citizens a high quality of service at a reasonable cost.

Long-Term Debt

(in millions of dollars)

Governmental

Activities

Business-type

Activities

Total

Activities

2015 2016

2015

2016 2015 2016

General obligation bonds

$330.4 $303.9

$1.8

$0.4

$332.2

$304.3

Revenue bonds

-

-

646.4

617.4

646.4

617.4

Installment financing agreements 225.9

259.9

405.8

410.1

631.7

670.0

Total

$556.3 $563.8

$1,054.0 $1,027.9 $1,610.3 $1,591.7