§ 25843 Transit Facility Debt Exclusion

• •If a city borrows money to build or buy buses, trains, or other transit stuff, that debt doesn’t count toward the city’s total debt limit.
• •This only works if the transit system has made enough money for at least 3 years in a row to pay back the loan *and* cover its own costs.
• •The rule helps cities build more transit without worrying about hitting their debt ceiling.

A city takes out a loan to build a new subway line. After 3 years, the subway makes enough money from tickets to pay back the loan and cover its own bills.

Because the subway pays for itself, the city doesn’t have to count that loan when checking if they’ve borrowed too much money overall.