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| reply to unoriginal
Re: ?!?!?! said by unoriginal:
said by Minister:
quote:
Perhaps they don't want TAX DOLLARS spent on something that they don't intend to utilize. Geesh.
From what I see, the Lafayette project will be funded by long-term revenue bonds, which from my understanding will be paid off only by subscribers to the system....am I missing something?
Yes, the point that if the system doesn't turn a profit then someone will have to pay off the bonds. In almost every case it is the local taxpayers that are used to cover the costs instead.
The bonds never have to be paid back if the project fails. That's why it is an investment. It's not guaranteed to be paid back.
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This package does not contain a winner... | |
 SmokeyI'd rather be skiingPremium
join:2003-05-20
Wild West
 ·Verizon Wireless..
| Not so. Governments run on bonds. There is not a city in the US that dose not use bonds to fund items in the budget. If they default on one, they may never get a good rating again, and that means no money to build that fire station, or pave the roads. That means taxes go up to replace the needed revenues. Also, many bonds requires some level of payback even if there is a default, and be sure that the issuing agency is not going to be left holding its ****.
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 marigoldsGainfully employed, finallyPremium,MVM
join:2002-05-13
Saint Louis, MO
kudos:1 | said by Smokey:
Not so. Governments run on bonds. There is not a city in the US that dose not use bonds to fund items in the budget. If they default on one, they may never get a good rating again, and that means no money to build that fire station, or pave the roads. That means taxes go up to replace the needed revenues. Also, many bonds requires some level of payback even if there is a default, and be sure that the issuing agency is not going to be left holding its ****.
These bonds are issued against the muncipal utility, not the city.
Thanks to the slew of laws that private companies have pushed through, a city can no longer cross-subsidize between municipal utilities and the city budget and thus the bonds must be issued against the utility as the city cannot legally use general fund money to pay off the bonds. This means that if the utility fails, there simply is noone left who can legally pay off the bonds.
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