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 fact sheet.

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 through annexation.

Discount - The amount of dollars by which market value of a bond is less than par value or face value.

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.