1.3 Common Strategies for Avoiding the Debt Limit

Public agencies may consider various legally permitted financing strategies for issuing debt obligations that do not cause the agency to violate the constitutional debt limit. The following discussion identifies a few of these and is presented only to illustrate how the market has responded to the constraints imposed by the state law to meet the financing needs of public agencies. A more detailed discussion of debt instruments used in California is presented in Chapter 3, Types of Debt Obligations Issued by Public Agencies.