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I am still waiting for a response from the city to my complaint and open records request. While we have a moment, let’s go to school on municipal bonds. There, we can talk about why the City of Wausau’s insistence on classifying loans from the Clean Water Fund and Safe Drinking Water Fund as revenue bonds is unsupportable and dangerous.
There are two standard types of municipal bonds. In Column A, we can see that the key features of General Obligation Bonds (G.O. Bonds). They are considered near risk-free investments because the municipality guarantees repayment of the debt even if it must raise taxes to do so. In fact, creditors, in this case, have the right to demand payment from taxpayers. Because the bonds carry almost no default risk, the issuer can get by with a very low rate of interest.
That risk and revenue trade-off is also a defining feature of revenue bonds. Revenue bonds can be issued when the municipality has user fee-supported undertakings like a municipal ice rink, a golf course, a tubing hill or a utility. Fees from operating the enterprise are used to repay debt associated with the enterprise…