Which is why the bond holders require in the covenants that these agencies tax or raise utility rates so that the agencies have cash + some percentage on hand that exceeds that annual bond payment.
So if an agency sold $5 Million in bonds at 20 years and 5% the annual payment is $260,000. But the covenants require 150% cash reserve on hand that requires the agency to have $390,000 on hand. Failure to do so can result in penalties from the bond holders and reduced credit ratings and higher interest rates for the next bond sales.
Those covenants you mention are violated all them time, sometimes covertly through fancy bookeeping and sometimes overtly like Detroit.
Everyone relies on the Muni Insurers...who could never begin to cover a wholesale run.
Banks should not be allowed to claim State and Muni bonds...much less School Board bonds...as High Quality Liquid Collateral.
But they should feel free to buy as many as they choose.