This page uses extracted PDF text. Text can misread numbers, dates or table columns. Check the PDF before quoting or interpreting it. Redacted areas remain redacted.
PART FOUR 4
Revenue Bonds
Revenue bonds are debt instruments issued by local governments and secured by the pledge of a specific source
of revenues. The City typically issues revenue bonds to finance Waterworks projects. The issuance of revenue
bonds does not count against a locality’s debt limit.
Before the city can borrow the funds or even commit to begin a project, State law requires adherence to several
steps. State law requires that a public hearing be conducted on a bond authorization by the City Council. A
bond authorization indicates an amount of funds that the city intends to borrow (at some time in the future) to
pay for capital projects. A notice (advertisement) that the public hearing will be held by the City Council must
be advertised in the newspaper twice during the two-week time period before the public hearing is actually
held. The advertisement lists the amount of funds that the city intends to borrow (at some time in the future) and
provides an estimate of the amount of money by category that it intends to spend on capital projects. The public
hearing gives citizens an opportunity to express their views about the city’s intention to incur additional debt for
capital projects.
When the bond authorization is approved by the City Council, it signifies that the City will use bonds as the
funding source to pay for projects up to the amount of the bond authorization. It does not mean that the City
intends to sell bonds immediately or even in the very near future. Generally, the city only sells bonds when the
cash is needed and when market conditions are the most favorable (lowest interest rates) for the City to borrow
the money.
PART FOUR: BUDGET | 33Jump to an indexed page (52 of 52)