What is a municipal bond? - Finance

My solution for the Financial Crisis facing American Cities today is a simple solution for Cities and States that need money and is a simple solution that could easily be made Legislatively.
All Cities that are incorporated are actually Corporations, and all Cities have Districts I.E. Water Districts, Sewer Districts, School Districts ect.. every one of these Districts take taxpayers money, and Invest some of this money in Companies in the Stock Market.
These Districts then receive quarterly Returns on their Investments, sadly though, this ROI money is Not used and not counted in the Budgets for any of the Districts.
Each and every District is a Government entity I.E. Water Service, Sewer Service. School Service is a government service provided by the local Government and paid for by the taxpayers, but these entities receive the ROI money from their Investments also, so the tax dollars is not really be necessary at all Taxes could be phased out entirely and replaced by ROI Investment Capital, if there was a law to make it enforceable.
Any doubts about this, people can easily look up their own Cities "Comprehensive Annual Financial Report" which all Cities must by law have an Audit performed .This ROI money received by Government entities is placed in Off Budget Accounts and currently this money is not used to pay for government services.
My simple Solution is for all of the entities mentioned earlier the Water, Sewer, School and any other named District be made to use the ROI money by law, so taxes could be phased out entirely, and all government services at all levels of Government could be paid for by ROI investment Money.

A municipal bond is when the state/local government borrows money through bonds. People like these types of bonds because they are generally free from federal income tax. The bond is used for government projects.