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Bond Sales by Cities Borrowing to Pay for Lost Court Fights Jump

By
  • Municipal debt issues for settlements hit $1.6 billion in 2018
  • ‘It’s sort of like putting your mortgage on your credit card’

After serving 13 years in prison for a murder he didn’t commit, Chaunte Ott won a $6.5 million settlement from Milwaukee, Wisconsin, in 2015. To pay him, the city didn’t draw from its tax revenue. It sold bonds to investors.

The 595,000-resident city has issued about $28 million of debt to cover the cost of legal settlements over the past decade, adding to a wave of borrowing by governments to pay for police misconduct, contract disputes and other adverse judgments.