(a) The City shall have power to borrow money and to issue its general-obligation bonds or other such evidences of indebtedness therefor, but only when authorized for capital improvements by the Council and ratified at an election by a majority of those qualified to vote and voting on the question. General obligation evidences of indebtedness may also be secured by revenues from revenue-producing utilities and enterprises when they are issued for the acquisition, construction, reconstruction, repair, improvement, extension, enlargement, and/or equipment of said utilities and enterprises; by special assessments on benefitted real property; and/or by other designated funds or revenues specifically pledged for payment of principal and interest thereon. Capital improvements as sued hereinabove may also include a part or all of the City’s share of the cost of a public improvement of which a part is to be paid by benefitted real property.

(b) Such outstanding general-obligation indebtedness of the City incurred for all purposes shall not at any time exceed twenty percent of the assessed value of all real and personal property in the City. In determining such debt limit of the City, any amounts on hand or on deposit for debt retirement, and any general-obligation indebtedness assumed by the State of Alaska, Kenai Peninsula Borough, or other municipality and any portion of reserve funds or accounts pledged to the payment of the principal amount of any outstanding general-obligation indebtedness shall be deducted from the amount of the outstanding indebtedness. This debt limit shall not apply to refunding indebtedness of the City.