How should debt related to a capital-type special assessment be classified when part is repaid by property owners and part by general taxpayers?

When dealing with debt that arises from a capital-type special assessment, it is important to understand how the repayment structure influences its classification. In this scenario, a portion of the debt is repaid by property owners who directly benefit from the improvement financed by the assessment, while the remaining portion is repaid by general taxpayers.

The appropriate classification of such debt is as a mix of special and general obligation debt. Although some components of the debt are tied to specific benefits received by property owners—making it reminiscent of a special assessment—other parts effectively make it a general obligation under the jurisdiction's broader taxing authority. This duality recognizes that the debt serves both specific beneficiaries and the general public through taxpayer support. Thus, classifying the debt exclusively as general obligation debt fails to encompass the special assessment component relevant to property owners.

In conclusion, the correct classification acknowledges the unique characteristics of the debt as it supports both the immediate benefits to specific property owners and the broader obligations towards general taxpayers. Therefore, the classification as a mix of special and general obligation debt captures the reality of the debt repayment structure.