Feuer Proposes Policy to Manage City’s Debt

Saying the city needs to set limits on borrowing before the budget cycle begins, Los Angeles City Councilman Mike Feuer proposed Wednesday that the council adopt a comprehensive debt policy.

Both the city administrative officer and the city controller issued reports Tuesday calling for such a policy, but they differed on a critical point: the limits that should be set on civic borrowing.

Feuer’s motion, which was referred to the council’s Budget and Finance Committee, calls for the two offices to reconcile their differences as well as for a moratorium on new indebtedness until a debt policy is adopted.

The city’s debt could approach 12% of general fund revenues by 2003, exceeding informal limits on borrowing. Rising debt ultimately could affect the city’s bond rating, which has been considered high, officials said.