Your city is expanding. There have been several problems with street flooding,which is affecting your business. You decide to attend a city councilmeeting, during which there is a discussion on building storm and sewerlines in advance of home construction. At the meeting, Tom Frank, thecity manager, states that the city is prohibited by law from financing theseprojects through a sales or property tax. He says that after the new homesare built, the city will be able to charge a monthly sewer fee to each homeownerand business. He asks for suggestions on financing the new sewersystem.a. What would you propose the city do to raise this money?b. Why is this investment vehicle attractive to investors?
Your city is expanding. There have been several problems with street flooding,
which is affecting your business. You decide to attend a city council
meeting, during which there is a discussion on building storm and sewer
lines in advance of home construction. At the meeting, Tom Frank, the
city manager, states that the city is prohibited by law from financing these
projects through a sales or property tax. He says that after the new homes
are built, the city will be able to charge a monthly sewer fee to each homeowner
and business. He asks for suggestions on financing the new sewer
system.
a. What would you propose the city do to raise this money?
b. Why is this investment vehicle attractive to investors?
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