Urban Renewal districts have the ability to sell bonds using their future property tax income as collateral per Idaho Code 50-2909. In other words, the urban renewal district is borrowing money to increase their short term revenue. This money is paid back with interest by the urban renewal district as revenue becomes available.

Urban renewal districts only levy taxes on increment value. There is only increment value when assessed values increase. If the assessed values of property with in an urban renewal district decrease the district does not receive income. This could cause the urban renewal district to default on these bonds. If this happens, the municipality, the state, or any political subdivision can not be held liable. Nor will the bonds be paid out of any funds other than those of the urban renewal agency. See Idaho Code 50-2012.