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COMMON REDEVELOPMENT FINANCING METHODS TAX INCREMENT REVENUE BOND A revenue bond is amortized only with the revenues generated from a project built with the bond proceeds; in this instance, the revenues are tax increment. Unlike general obligation bonds, revenue bonds are not backed by the taxing power of the city. GENERAL OBLIGATION TAX INCREMENT BOND A general obligation bond is backed by the full faith and credit (including the taxing and further borrowing power) of the city. This bond is repaid with tax increment, however, if the tax increment is not sufficient to pay the annual debt service, the city may use whatever funds it has available or may levy to pay the shortfall. SPECIAL ASSESSMENT BONDS A special assessment bond is issued to provide revenues to pay for improvements to benefited property. If the benefited property is assessed annually to pay for a share of the debt service, special assessments become a lien against property, similar to property taxes. Under certain circumstances, special assessment bonds can be repaid with tax increment and are customarily general obligation bonds. TAX INCREMENT R�VENLl� NOTE A common alternative to the issuance of bonds has been a tax increment revenue note, also known as a"pay as you go" note. Under this type of note, a developer pays for the tax increment eligible costs as they are incurred and the city issues a revenue note obligating it to reimburse the developer for these costs from tax increments as they are generated and received. While the city assumes no risk under this arrangement, the developer assumes the risk that sufficient tax increment will be generated to pay the agreed upon terms of the revenue note over the agreed upon period of time.