What is a bond? A bond is similar to a home mortgage. It is a contract to repay borrowed money with interest over time. Bonds are sold by a school district to competing lenders to raise funds to pay for the costs of construction, renovations and equipment. Most school districts in Texas utilize bonds to finance renovations, equipment and new facilities.
What is a bond election? School districts are required by state law to ask voters for permission to sell bonds to investors in order to raise the capital dollars required for projects such as renovation to existing buildings or building a new school. If voters pass the referendum, they essentially give the district permission to take out a loan and pay that loan back over an extended period of time, much like a family takes out a mortgage loan for their home. A school board calls a bond election so voters can decide whether or not they want to pay for proposed facility projects.
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 and equipment/furniture for new or existing buildings. Bonds cannot be used for teacher salaries or operating costs such as utility bills, supplies, building maintenance, fuel and insurance.
What is the length of the bond terms? The maximum term for bonds allowed by law is 40 years. Most of ours are 30-35 years. For projects with a shorter life expectancy (i.e. technology, athletic supplies, etc.), bond terms are matched with the life of asset. This ensures we do not end up paying for items that we are no longer able to use.