Bonds may be issued for periods up to 40 years under the Local Bond Law, and all bonds must mature within the period of average period of usefulness determined in the bond ordinance.

Bonds may be issued for periods up to 40 years under the Local Bond Law, and all bonds must mature within the period of average period of usefulness determined in the bond ordinance.

• A. True
• B. Not stated
• C. Not applicable
• D. False

Answer: (A)

Understanding debt terms under the Local Bond Law is about matching the repayment period to the life of what is financed. Bonds can be issued for up to 40 years, but the actual maturity must fall within the period of average usefulness that the bond ordinance fixes for the financed project. This ensures debt service ends no later than the asset’s expected life, tying repayment to the asset’s usefulness rather than extending far beyond it. So, the statement is true: you can issue bonds up to 40 years, and those bonds must mature within the average usefulness period determined in the bond ordinance. If the ordinance sets a shorter average life, maturities adhere to that shorter period; if it’s within the 40-year cap, it guides the maximum the bonds may mature.

Understanding debt terms under the Local Bond Law is about matching the repayment period to the life of what is financed. Bonds can be issued for up to 40 years, but the actual maturity must fall within the period of average usefulness that the bond ordinance fixes for the financed project. This ensures debt service ends no later than the asset’s expected life, tying repayment to the asset’s usefulness rather than extending far beyond it. So, the statement is true: you can issue bonds up to 40 years, and those bonds must mature within the average usefulness period determined in the bond ordinance. If the ordinance sets a shorter average life, maturities adhere to that shorter period; if it’s within the 40-year cap, it guides the maximum the bonds may mature.