The City of Tucson, Ariz., decided last year to pay rent on five golf courses and a zoo — to itself. They are risky financial arrangements born of desperation, adopted to fulfill ballooning pension payments that the cities can no longer afford. It works like this: The city creates a dummy corporation to hold assets and then rents them. The corporation then issues bonds and sends the proceeds back to the city, which sends the cash to its pension fund to cover its shortfall. If they can pull off the strategy, cities issuing these bonds can reduce their pension bills by an amount that’s the difference between what they earn and what they pay out.

Source: New York Times February 16, 2021 14:03 UTC