Financing Parks: A Borrowing Guide

FINANCING SOURCE	PROVIDES FUNDS	REPAYMENT	ADVANTAGES	DISADVANTAGES
General Obligation Bonds -- Limited or Unlimited Tax	Immediately	By all taxpayers over 10-30 years	Makes funds available immediately; ties payment to benefits received; potentially lowers interest costs	Increases taxes; competes with other local services for limited resources; separates payment from benefit
Revenue Bonds (or "rate-supported" bonds)	Immediately	By rate payers over 10-30 years	Makes funds available immediately; ties payment to benefits received	Increases rates or fees; interest costs potentially higher than GO bonds
Taxable Bonds	Immediately	By all taxpayers over 10-30 years	Not subject to requirements of Tax Reform Act	Highest interest rates of all bond types
Tax Increment Financing Bonds	Immediately	By all taxpayers within subarea of county	Ties payment to benefit received within subarea	Revenues dependent upon growth in assessed value within subarea
Lease Purchase and Certificates	Immediate use of equipment or facility while being puchased	By all taxpayers over 5-10 years	Provides a means of buying on credit without issuing debt	High interest rates; may not relate payment to benefits received
Revolving Loans	Immediately	By rate payers over 10-20 years	Makes funds available immediately; ties payment to benefits received; potentially lower interest costs	Increase rates; reporting and administration may be burdensome; may not be in accordance with county priorities
Bond Banks	Varies	By taxpayers or rate payers pver 10-30 years	Particularly helpful for small communities; lowers cost of issuance	Issuance of bonds may be delayed while sufficient number of communities apply