A general obligation bond (GO bond) is a common financial tool utilized by governments that are secured by a pledge to use legally available resources, such as property tax revenues, to repay bond holders over the life of the bonds. Basically, a city or state is loaned funds up front for capital projects, generally raised by financial institutions, to allow for the construction of large capital projects they wouldn’t otherwise be able to afford. Those funds, including borrowing costs (interest), are repaid back over time.
In Denver, GO bonds are typically sold in a competitive sale to ensure the lowest interest rate. The bonds are tax exempt because Denver is a government entity. The city continues to pay off older debt and has seen an increase in property values in the last few valuation cycles, which allows the capacity for the proposed new debt of $937 million without triggering an increase to tax rates.
City Charter limits GO debt to 3% of actual value of the taxable property within the City.