Below is a description of various types of bonds issued by the District of Columbia, as well as by certain independent instrumentalities of the District.
General Obligation Bonds. General Obligation Bonds are bonds payable from and secured by the general taxing power and full faith and credit of the District. The District pledges to levy as many taxes as necessary to repay principal of and interest on these bonds. The District has issued General Obligation Bonds to finance various capital improvement projects. As of April 1, 2014, the District had outstanding approximately $2.7 billion (in the aggregate) of its General Obligation Bonds.
General Obligation Tax Revenue Anticipation Notes (TRANS). TRANS are short-term obligations, due and payable in the fiscal year in which they are issued. TRANS are general obligations of the District, and the full faith and credit of the District is pledged for the payment of principal and interest on TRANS. The District has issued TRANS during a fiscal year to pay general governmental expenses in anticipation of the collection or receipt of revenues for such fiscal year. The District issued $405 million in Tax Revenue Anticipation Notes in fiscal year 2014.
Income Tax Secured Revenue Bonds. Income Tax Secured Revenue Bonds are bonds payable solely from and secured solely by District income tax and business franchise tax revenues; the District does not pledge its general taxing power. Income Tax Secured Revenue Bonds are issued to fund capital improvement projects throughout the District. As of April 1, 2014 the District had a total aggregate amount of $4.3 billion in Income Tax Secured Revenue Bonds outstanding.
Certificates of Participation (COPs). The District has issued Certificates of Participation to finance several District projects including a public safety and emergency preparedness communications and command center. The COPs are payable by the District pursuant to lease agreements, with the lease payments being subject to annual budget appropriations.
Ballpark Revenue Bonds. The District issued its Ballpark Revenue Bonds to finance the construction of Nationals Ballpark, the baseball stadium that is owned by the District and leased to the owners of the Washington Nationals. Ballpark Revenue Bonds are bonds payable from and secured by various sources, including certain revenues generated by the ballpark, rent paid by the team and certain generally applicable taxes. Ballpark Revenue Bonds have also provided financing for the renovation of Robert F. Kennedy Memorial Stadium.
Revenue Bond Program. The District of Columbia Revenue Bond Program issues bonds to help finance, at a lower rate of interest, capital projects for various sectors, including health care, housing, transit, manufacturing, education, and industrial and commercial development. Revenue Bonds are generally payable from and secured by the revenue stream of the financed project, project-related undertakings and a mortgage. Revenue Bonds are special obligations of the District repayable solely from the pledged assets of the borrower, and they do not constitute a pledge of or involve the faith and credit or the taxing power of the District.
Tax Increment Financing (TIF) Obligations. TIF Obligations are bonds and notes payable from and secured by increased property and sales taxes generated by the bond-financed project. The District issues TIF Obligations to promote economic development projects. The District has issued TIF Obligations to help finance various projects, including the following:
- Arena Stage at the Mead Center for American Theater
- Capitol Hill Towers housing, hotel, retail and parking development
- DC-USA parking garage project relating to the opening of a Target retail store
- Embassy Suites Hotel
- Gallery Place entertainment, retail, and housing development
- Mandarin Oriental Hotel
- Shakespeare Theatre Company - Harman Center for the Arts
- City Market at O Street, retail, commercial, residential and parking development
Payments In Lieu of Taxes (PILOT) Obligations. PILOT Obligations are bonds and notes payable from and secured by certain payments in lieu of taxes to be paid by private property owners and/or leasehold owners. In 2007, the District issued PILOT Obligations to finance the Anacostia Waterfront Department of Transportation Redevelopment Project.
Deed Tax Revenue (Housing Production Trust Fund) Bonds. In 2007 and 2010, the District issued Deed Tax Revenue Bonds to help finance the New Communities Projects. These projects serve as part of the District’s New Communities Initiative which provides housing infrastructure to improve the quality of life in several District neighborhoods plagued by poverty, unemployment and blight. The Deed Tax Revenue Bonds are special obligations of the District, payable from and secured by pledged revenues consisting of Real Property Transfer Taxes and Deed Recordation Taxes deposited in the Housing Production Trust Fund. In December 2012, the District issued $39.6 million in Deed Tax Revenue Bonds.
Federal Highway Grant Anticipation Revenue (GARVEEs) Bonds. GARVEEs are special obligations of the District, payable from and secured by certain pledged revenues from the Federal Highway Administration and Federal Transportation Funds made available to finance federal highway projects. In 2011, the District issued GARVEE Bonds to help finance the replacement of the twin 11th Street bridges over the Anacostia River. In October 2012, the District issued $42.9 million in GARVEE Bonds to finance Phase II of the 11th Street Bridge Project.
Bonds of Independent Instrumentalities of the District
The District has created several independent entities and instrumentalities that have the authority to issue bonds. Bonds issued by the entities listed below are not general obligations of the District and do not involve a pledge of the full faith and credit of the District.
District of Columbia Housing Finance Agency (DCHFA) Bonds. DCHFA Bonds are bonds issued by DCHFA to finance low and moderate income housing projects. DCHFA Bonds are secured by and payable from various revenues, including mortgage loan payments.
District of Columbia Tobacco Settlement Financing Corporation Bonds. Tobacco Bonds are bonds payable from and secured by payments received by the District of Columbia Tobacco Settlement Financing Corporation as part of a Master Settlement Agreement between the District and certain tobacco manufacturers. The Tobacco Settlement Financing Corporation has issued Tobacco Bonds to finance capital improvements, including school modernization, in the District.
District of Columbia Water and Sewer Authority (DC Water) Bonds. DC Water Bonds are bonds issued by DC Water to finance water and sewer improvements in the District. DC Water bonds are secured by and payable from certain rates and charges imposed for the use of, and the services provided by, the District’s water and sewer system.
Washington Convention Center and Sports Authority (WCSA) Bonds. WCSA Bonds are bonds issued by WCSA to finance a convention center and certain related facilities in the District. WCSA Bonds are secured by and payable from certain specified tax revenues and, for certain issuances, certain other revenues, of the District that are dedicated pursuant to law to repaying WCSA Bonds.