What is a bond?

A bond is similar to a home mortgage. It is a contract to repay borrowed money with an interest rate over time. Bonds are sold by a school district to lenders to raise funds to pay for the costs of construction, renovations, and equipment.

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What is a bond election?

It's like asking for permission to take out a loan. School districts, as per state law, need to get approval from voters to sell bonds to investors. This money is then used to finance capital projects like renovating existing buildings or building new schools. Just like a family takes out a mortgage loan for their home, a school board calls a bond election for voters to decide if they want to pay for proposed facility projects.

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Why do school districts need to sell bonds?

Most school districts in Texas use bonds to finance renovations and new facilities. This bond would allow the District to renovate and build District infrastructure, including school buildings, without impacting the District’s Maintenance and Operations funds, which cover things such as school programs, teachers, and staff.

 

How can bond funds be used?

Bond funds can be used to pay for new buildings, additions, and renovations to existing facilities, land acquisition, technology infrastructure, equipment, new or existing buildings, and large-ticket items such as school buses. Bonds cannot be used for teacher salaries or operating costs such as utility bills, supplies, building maintenance, fuel, and insurance.

 

How is the District tax rate configured?

A school district's tax rate is comprised of two components: the Maintenance & Operations tax (M&O) and the Interest & Sinking tax (I&S). The M&O rate is used to operate the school district, including salaries, utilities, furniture, supplies, food, gas, etc. The I&S rate is used to pay off school construction bonds. Bond sales only affect the I&S rate.

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If the bond election is passed, does the school district immediately incur the debt?

The bonds do not cost the District anything until they are issued. Even though the voters approve the bond issue, no costs are incurred until the bonds are issued. This ensures that the District only incurs debt once it approves the sale of the bonds after the election.

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If the wind/solar does NOT come on board, will the $0 impact on 140k or less home stay in place or will those folks end up with a “shock” in the upcoming years if the bond passes? 

Although SCISD is expecting to receive additional Assessed Value from wind and solar projects in the near future, the district is not currently relying on any projected future value from wind and solar entities.  The only wind/solar value the district has incorporated into the current bond projections comes from Live Oak Wind, which is the wind project that's been completed, is on the ground in the district, and is currently a part of the district's certified value numbers from the county appraisal district.  Any other future wind and solar projects have not been included in the numbers projections for the current bond.