In Type I school districts, where are the bonds maintained and how are payments made?

In Type I school districts, where are the bonds maintained and how are payments made?

• A. Maintained by municipality; payments from municipal Current Fund
• B. Maintained by school district; payments from school budget
• C. Maintained by state; payments from state funds
• D. Maintained by county; payments from county funds

Answer: (A)

In Type I districts, the municipality holds and maintains the district’s bonded debt. The bonds are issued and serviced at the municipal level, not by the school district as a separate entity. Debt service payments (principal and interest) are made from the municipality’s Current Fund, funded by the town’s general revenues and tax levy. This arrangement ties the school debt to the municipality’s treasury rather than to the school district’s own budget or to state or county funds.

In Type I districts, the municipality holds and maintains the district’s bonded debt. The bonds are issued and serviced at the municipal level, not by the school district as a separate entity. Debt service payments (principal and interest) are made from the municipality’s Current Fund, funded by the town’s general revenues and tax levy. This arrangement ties the school debt to the municipality’s treasury rather than to the school district’s own budget or to state or county funds.