Distinguish between general obligation bonds, revenue bonds, and lease-purchase agreements, and give a governance consideration for each.

• A. GO bonds are repaid from project-generated revenues and do not require voter approval; revenue bonds are repaid from tax revenues; lease-purchase is off-balance-sheet financing; governance must ensure compliance and affordability.
• B. GO bonds are repaid with tax revenues and generally require voter approval; revenue bonds are repaid from project-generated revenues and don't require voters; lease-purchase are off-balance-sheet financing; governance must ensure compliance and affordability.
• C. Revenue bonds require voter approval; GO bonds are off-balance-sheet; lease-purchase is funded by grants.
• D. Lease-purchase bonds are repaid from property taxes and require voter approval.

Answer: (B)

The main idea here is how each financing tool is paid back, who usually has a say in authorizing it, and what governance actions these choices prompt.

General obligation bonds are backed by tax revenues and typically require voter approval. That means a district must secure community authorization and plan debt so taxes stay affordable for taxpayers. Governance focus: ensure the district’s debt burden fits within tax-rate limits, that there is clear transparency about costs, and that voters are properly engaged.

Revenue bonds rely on money generated by the project itself—like facility revenues or user fees—and generally do not require voter approval. Governance focus: ensure the project is financially viable, set and enforce appropriate user charges, and monitor covenants and debt-service coverage to prevent shortfalls.

Lease-purchase agreements are a form of off-balance-sheet financing used to acquire facilities without issuing traditional debt. Governance focus: ensure procurement complies with laws, confirm long-term affordability, and address how obligations will be reported and managed on the books to avoid hidden liabilities.

The correct statement aligns with these distinctions: GO bonds are tax-backed and voter-approved; revenue bonds are project-revenue-backed and typically don’t require voter approval; lease-purchase arrangements are off-balance-sheet financing, with governance emphasizing compliance and affordability.