2.4.2 Source of Payment; Pledge

Unless the debt is payable from all of the public agency’s general fund assets and revenues, the bond documents generally specify the sources of funds available for the payment of the debt. This will vary with the type of financing obligation. If the public agency’s payment obligation is limited to a particular source, such as revenues on an enterprise, assessments levied against particular properties, payments received from a conduit borrower or revenues of the current fiscal year, specificity as to what is available is essential. Of even greater importance is a limitation on the public agency’s payment obligation to make payment from such sources. The bond documents may also provide for the pledge of revenues (such as enterprise revenues or conduit borrower payments) or assets (such as funds held by the trustee) to secure the debt.