What are the risks if the Redevelopment Agency issues bonds?
Bond buyers who purchase these bonds realize that the City does not pledge its taxing power for repayment. As a consequence, bonds are repaid solely from tax increment collected by the Agency. It is virtually impossible to sell bonds until and unless the Agency already has tax increment to pay them back. Moreover, these bonds, as with most bonds, have revenue funds to meet shortfalls. The Agency also carries reserves.
