Our debt clock shows that Peru has 19,580,000 worth of General Obligation Bonds. Until I was put into a position of needing to know what exactly they were, I just read the words and it meant very little but sure sounded like a lot of money.
General obligation bonds are backed by the full faith and credit of the municipalities that issue them and the default risk is low since the municipality has the option of raising taxes to meets its obligations and that means us the residents of Peru .OR it is possible for a municipality to to repay the bondholders by borrowing more money. When the interest rates fall, they may call a bond issue and repay the principal before the bonds mature and refund the debt by making a new bond issue at a lower rate of interest.
How do cities pay off the General Obligation bonds?... They use sales taxes, license fees and other types of fees.
Doesn't all this sound familiar? We began to get into trouble here in Peru when our revenue dropped. We were not prepared for a rainy day.
3 comments:
Lois - the rec meeting tomorrow apparently does start at 6:30.
Thanks. I have been slightly overwhelmed by computer problems and haven't had time to check it out I had meant to call Heidi.
It appears that tomorrow's council meeting will be labeled a Regular Council Meeting. It also appears that an ordinance will be established giving the mayor and city clerk authority to hand the management of the airport over to
AVTEC. Don't forget they can vote at any meeting now so if you're interested you should attend the meeting.
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