What are assessment lien bonds and notes related to?

Assessment lien bonds and notes are specifically related to funding local improvement assessments. These financial instruments are used by municipalities to raise capital for specific public projects, such as road construction, sewer systems, or other infrastructure improvements that benefit property owners within a defined assessment district.

When a municipality issues assessment lien bonds, it borrows money upfront to finance these local improvements. The repayment of the bonds is secured by a lien on the properties that benefit from the improvements. This means that property owners within the district will be assessed a tax or fee that is tied to the value of the benefits received from the improvements. The revenue collected from these assessments is then used to pay back the bonds over time.

This mechanism allows municipalities to undertake necessary improvements without burdening the entire tax base, as only the properties that directly benefit from the improvements are responsible for repayment. This targeted approach encourages local investment and development while ensuring that those who benefit from specific projects contribute to their costs.