I need an economist or accountant to explain this to me.

[on point]

2. There are many ways

One simple way is the Bond invests in something that saves the city money / or makes the city money, like a new road that saves time / fuel / labor / shock absorbers

Another simple way is to retire an existing bond that is more expensive

Another simple way is to invest is something with a return on it that is equally long term that pays off - like a new schools for the kids - much cheaper than prisons for instance.