Chapter 7 Flashcards
Direct Debt
All the debt that’s been issued by the municipality
Net Direct Debt
The direct debt minus any self-supporting debt, such as revenue and notes issues.
In general, _____ is only the general obligation debt.
net direct debt
Overlapping Debt
The result of multiple authorities in a given geographic area having the ability to tax the same residents.
Total Bonded Debt
The sum of both the long- and short-term debt of a municipality, plus its applicable share of overlapping debt.
If a school district and city lie within the same boundaries, they are said to be coterminous and, when examining the debt of the city the _____ debt must be shown as overlapping debt.
school district’s
Highway bonds that are payable from an excise tax on gasoline are considered:
special tax bonds.
Build America Bonds
Intended to help state and local governments finance capital projects at a substantially lower cost.
Indicates that operating and maintenance expenses are deducted from the gross project revenues before the revenues are applied to debt service.
Net revenue pledge
Indicates that debt service is paid prior to operating and maintenance expenses being deducted.
Gross revenue pledge
If net revenues are pledged to pay debt service, the bond is referred to as a(n):
net revenue issue.
If an investor buys an in-state municipal bond, the interest earned is exempt from:
federal, state, and local taxes.
If an investor buys an out-of-state municipal bond, the interest earned is exempt from:
federal tax, but subject to state and local taxes.
VRDOs adjust their interest rates:
at specified intervals such as daily, weekly, or monthly.
Long-term bonds with a variable interest rate set periodically through a Dutch Auction.
Auction Rate Securities
