Code This is one of the 29 Codes of California Law.
Government Code consists of numerous sections and articles of
legislation applicable to city, county and state property taxation.
California Health & Safety Code
- This is one of the 29 Codes of California Law. Health &
Safety Code consists of numerous sections and articles of
legislation applicable to the health and safety of citizens
in cities and counties. Within the Code are sections that
provide cities and counties with the authority to impose assessments
to the underlying property of the city or county.
Callable bond - A bond or note
that is subject to redemption at the option of the issuer
prior to its stated maturity. The call date and call premium,
if any, is stated in the offering statement or broker's confirmation.
Community Facilities District (CFD)
- See also Mello-Roos Bonds. If a bond issue name or a property
tax line item has "CFD" in it, that tells you it
is a Mello-Roos Bond. This is a form of financing used by
cities, counties and special districts to pay for costs of
infrastructure, schools, and public services such as police,
fire or ambulance. Money is raised by selling bonds, then
properties within the CFD receive an annual special tax to
pay off the bonded debt. The special tax is secured by a lien
on each property, which is subject to accelerated foreclosure
if property taxes are not paid on time. For more information,
see our Mello-Roos Fact Sheet.
Community Services District (CSD)
- A Community Services District is a special district that
provides certain services including, but not limited to, supplying
residents with water for domestic, irrigation, sanitation,
industrial, fire protection, and recreational uses; collect,
treat, or dispose of sewage, waste, storm water, garbage or
refuse; fire protection; public recreation; street lighting;
mosquito abatement; police protection; and public libraries.
This type of assessment may or may not have bonds associated
with it. To learn more, see our Community Services District
Conduit Bonds - Bonds whose repayment
is the responsibility of the business or developer who benefits
from the financing, rather than the issuer who only collects
the taxes, fees or revenues and passes them on to the bondholder.
Consultant Engineers, finance
or real estate professionals that aide in or manage the administration
of special financing districts, other local municipal district
bond issues, or other property based fees or charges.
Consumer Price Index Factor (CPI)
- The CPI factor is the yearly rate at which the assessed
value of real property may increase, provided that the property
is not sold, transferred, or improved. Under Proposition 13,
the CPI may not exceed 2%. The CPI is governed by California
Revenue and Taxation Code §51. See our Proposition13
Fact Sheet for more details.
County Service Area (CSA) - Areas
or zones within counties, created to provide services and/or
improvements to area and zone inhabitants. County Service
Areas are created to provide for numerous projects, including,
but not limited to street, road, and sewer improvements, park
and recreation improvements, lighting and other infrastructure.
See our County Service Area fact sheet for more information.
Coupon rate - The specified annual
interest rate payable to the bond or note holder as printed
on the bond. This term is still used even though there are
no coupon bonds anymore.
Covenant - A legally binding commitment
by the issuer of municipal bonds to the bondholder. In land-secured
financings, such as assessment districts or Mello-Roos, the
issuer may have a foreclosure covenant promising to initiate
foreclosure on delinquent property within 180 days. An impairment
of a covenant can lead to a Technical Default.
Current Roll - The property tax
roll containing all property with tax-paid liens. The term
"Roll" refers to the entire assessment roll.
Dated Date - (dtd.) The date carried
on the face of a bond or note from which interest normally
begins to accrue.
Debt Ratio - The ratio of the
issuer's general obligation debt to a measure of value, such
as real property valuations, personal income, general fund
resources, or population.
Debt Service - The combination
of both the interest and principal payments due to bondholders.
Bonds generally mature each year, at which time outstanding
principal and interest are due to bondholders.
Debt Service Reserve Fund - A
bank trustee account established by the trust indenture and
used as a backup security for an issuer's bonds. It usually
amounts to one year's debt service, and can be drawn on by
the Trustee in the event that revenue is inadequate to make
the current debt service payment.
Default - Failure to pay in a
timely manner principal and/or interest when due, or a Technical
Default, the occurrence of an event as stipulated in the Indenture
of Trust resulting in an abrogation of that agreement. A Technical
Default can be a warning sign that a default on debt service
is coming, but in reality actual debt service interruption
does not always occur if the problems are resolved in time.
A Technical Default will almost always drive down the price
of a bond in secondary market trading.
Defeased bonds - Refunded bonds
for which the payment of principal and interest has been assured
through the structuring of a portfolio of government securities,
the principal and interest on which will be sufficient to
pay debt service on the refunded, outstanding bonds. When
a bond issue is defeased, the claim on the revenues of the
issuer is usually eliminated.
Delinquent Taxes - Property taxes
that have been levied but remain unpaid on and after the due
date. In California, property taxes are delinquent on December
10 and April 10. Special taxes and assessments are usually
due on these dates as well.
Denomination - The face or par
amount - nominally $1000 or $5000 but can be $100,000 or more
in the case of a note - that the issuer promises to pay at
a specific bond or note maturity.
Direct debt - In general obligation
bond analysis, the amount of debt that a particular local
unit of government has incurred in its own name or assumed
Discount - The amount of dollars
by which market value of a bond is less than par value or
Discount Bonds - Bonds which sell
at a dollar price below par in which case the yield would
exceed the coupon rate. The difference between the discount
price and the maturity price is subject to federal capital
gains tax except in the case of Original Issue Discount Bonds.
Double-barreled Bond - A bond
with two distinct pledged sources of revenue, such as earmarked
monies from a specific enterprise or aid payment, as well
as the general obligation taxing powers of the issuer. A California
GO Water Resources Bond would be a good example.