Using the link provided on the CAFR for the City of San Jose: http://sanjoseca.g

Question

Using the link provided on the CAFR for the City of San Jose: http://sanjoseca.gov/DocumentCenter/View/63254 Can you double check my answers and provide correct page numbers.

1. Debt Service Function. How is the debt service function for tax-supported debt handled—by the General Fund, by a special revenue fund, or by one or more debt service funds?

my answers - the debt service fund - pg231 the general fund - pg.28

2. If there is more than one debt service fund, what kinds of bond issues or other debt instruments are serviced by each fund?

my answer - There is only one debt service fund

3. Is debt service for bonds to be retired from enterprise revenues reported by enterprise funds?

my answer - Yes

Explanation / Answer

1. Debt Service Function: The City of San Jose Financing Authority Debt Service Fund is a debt service fund that accounts for the debt activities related to capital projects funded with Financing Authority debt (Pg44), hence the debt service function is handled by a Debt Service Fund, since it is separately reported as a major fund. Since Debt service fund is reported as a separate fund, it cannot be a part of General Fund.

2. (a) There is only one Debt Service Fund

(b) The City of San José Financing Authority Debt Service Fund services the debt issued for certain projects. Following excerpt from Page 85 details the fund's financial structure-

"The Financing Authority issued these bonds to provide variable-rate exposure to the debt portfolio and to provide additional flexibility with respect to restructuring or redeeming the debt issued for certain projects. The source of repayment for each of these series is from lease payments from the City to the Financing Authority for the City’s lease "

3. Yes, 100% of lease revenues are used for debt servicing and hence retired from enterprise revenues. Refer the extract from Page 88-

" The lease revenue for each fiscal year is generally equal to 100% of annual debt service net of other available funding sources. Total principal and interest remaining on these bonds as of June 30, 2017, are approximately $935,671,000, with the final payment due on May 1, 2042. "

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