Municipal Services
GENERAL OBLIGATION BONDS
General Obligation Bonds are governed by Chapter 384, Division III (for cities) and Chapter 331, Division IV, Part 3 (for counties) of the Code of Iowa. General obligation bonds are debts incurred by cities or counties that are repaid through property tax revenues. General obligation bonds can be issued for both “essential corporate/county purposes” and “general corporate/county purposes.”
“Essential” purposes, while varying between city and county regulations, usually include such projects as bridges, roads, water & sewer systems, and some urban renewal projects. “General” purposes also differ for cities and counties, but can include community centers, fire & police stations, and other public buildings.
Bonds for “essential” purposes can generally be issued without a public vote provided the amount of the bond does not exceed a maximum amount as specified in law for the population of the area served. However, bonds for “general” purposes usually require the approval of 60% of the affected voters in a special election.
Additionally, cities and counties have limitations on the amount of general obligation debt they can incur relative to their property valuation. For more information on general obligation bonds, see Chapters 331 and 384 of the Code of Iowa and contact your city or county attorney.