City governance is as a part of local governance in Indonesia faces various issues in local autonomy nowadays. Among others are issues on population growth, lack of job , authority distribution, development funding and lack of local revenue. In other side, city governance should give convenience and safety to its citizen to stay in town. Therefore, the efforts to increase the city,s fiscal capacity are badly needed. It had been much activities developed by city government to increase it fiscal capacity through extensification, intensification and diversification local income resource, however, they were not maximum enough to support city development needs. Local bonds is a funding alternative for local infrastructure development that can be developed by local government to overcome the issues on local development funding and fiscal capacity generally. Those local bonds are potential to develop by local government remind that central government succeeded to issue government 's bonds and attracted community.