If you live in Minneapolis, you owe a lot less these days. The city's total debtload has fallen from a peak of almost $1.3 billion in 2004 to under $900 million this year. That's a one-third drop. Your per-capita share as a city resident has dropped from more than $650 to about $450. Or to measure it another way, the debt as a share of the city's property value has dropped from well over 4 percent to less than 3 percent, even with the city's tax base shrinking during the recession.. The figures above are for total general obligation debt. That's the amount that the city has pledged in your name to back from taxes or other income, such as your utility payments. The payoff is that the city now has the capacity to issue more debt. Mayor R.T. Rybak wants to borrow $45 million more over the next five years to repave city's streets. Rybak said the city is able to do that because the Legislature approved merging the last independent pension funds for city employees into their statewide cousins. That gives predictability to the city's pension costs into the future. It also allows the city to use some accumulated pension reserves to wipe out the pension bonds it issued between 2002 and 2004. The bonds were issued to smooth out a sudden run-up in property taxes that otherwise would have been needed to meet unexpected pension costs a decade ago from a surge of early retirements by city workers and the dot.com market bust.. The City Council recently approved retiring early $36 million of that pension debt on Dec. 1. It expects to retire the remaining $49 million a year after that. Calling that debt, or retiring it ahead of schedule, allows the city to avoid $46 million in future interest charges. Paying down debt can be a good thing, just like paying off your mortgage. It means less money goes to paying interest. Too much debt can cause credit rating agencies to downgrade a city's credit. But Mike Abeln, the city's self-titled Debt Guy, told us that those same agencies get concerned if a governmental unit has too little debt. That means that it's not keeping up its infrastructure, which can lead to bigger costs or less economic vitality down the road. Or as Rybak put it in his budget message, a pothole is a debt we pass on to future generations. Borrowing also allows the cost of facilities that will be used for decades, such as bridges or buildings, to be spread over future taxpayers who will benefit as well as those paying property taxes today. So why else has the city's debt dropped? In general, the city hasn't been borrowing as much to finance utility infrastructure such as its sewer and water systems and parking garages. It has paid down considerable debt on the convention center. The amount of debt issued to finance development has dropped as tax-increment financing has gotten less useful as a tool, and the city let some of its development districts expire. Moreover, a workout plan has helped the city cut in half the debt it owed on its once-underfinanced internal revolving funds that provide technology like computers or equipment like vehicles to departments. Rybak likes to credit the debt reduction to a disciplined financial policy. But property taxpayers also helped mightily with the debt reduction, shouldering increases in the city levy of 8 percent annually for much of this decade. . 20111014132839891