What is a Bond Election?

Just as homeowners borrow money in the form of a mortgage to finance the purchase of a home, a school district borrows money in the form of bonds to finance construction, renovation and other capital projects. Both are repaid over time, but in order for a school district to sell tax supported bonds, it must go to the voters for approval.

How can bond funds be used?

Bond funds can be used to pay for new buildings, additions and renovations to existing buildings, land acquisition, technology, buses, and equipment, among other items. By law, bond funds may not be used to fund daily operating expenses, such as salaries or utilities, which are paid for out of the district’s Maintenance & Operation (M&O) budget.

Why do you need a bond election?

School districts are required by law to ask voters for permission to issue bonds in order to pay for capital expenditures for projects like building a new school or making renovations to existing facilities. Districts take out a loan and then pay that loan back over an extended period of time, much like a family takes out a mortgage loan for their house.

Who decides what items are included in the bond?

The Odem-Edroy ISD Long-Range Planning Committee was comprised of over 13 members including parents, administrators, and community members. The committee met over the course of several months to study district needs at all grade levels and campuses and discussed the future vision for Odem-Edroy ISD students. The group studied campus safety, a district-wide facilities assessment, survey data, demographic projections, and other data and made their recommendation to the Odem-Edroy ISD Board of Trustees for consideration. Their recommendation was approved unanimously by the board.

What items are included in the current bond?

This bond program is focused on four areas: Providing safe and secure schools for our teachers and students, adding core space and facilities for student enrollment growth, addressing aging facilities, and advancing instructional programs.

What types of safety and security upgrades are included in this bond?

Improving the safety and security of all Odem-Edroy ISD campuses is one of the top priorities of the 2023 Bond. This bond program will provide access control and place card readers/badge access at all campuses. It will also provide school lock-down systems for emergencies, intrusion resistant glass, security cameras and other safety items listed below. The goal of these enhancements is to enhance the safety of our students, teachers, and staff throughout the district.

• Update entrance vestibules – Intrusion resistant glass film
• Upgrade video monitoring and recording system infrastructure and software districtwide – migrate to Cloud Platform
• Equip campuses with vape sensors – add to current Cloud Platform
• Expand badge access to all areas – migrate to current Cloud Platform
• Expand public address system to cover all parts of campuses
• Lock-down systems
• Update Visitor check-in & emergency alert system
• Increase fencing and gates
• Replace doors -- Rekey doors to like key system
• Update Exterior Lighting
• Expand communications system

How will the district address enrollment growth and capacity constraints at Odem High School?

Odem-Edroy ISD is still experiencing growth in student enrollment. Keeping up with growth also enables the district to maintain smaller class sizes. Additions to the K-12 STEM program allow for more student participation in areas of Science, Technology, Engineering, and Math. Expansion of Career and Technology Education (CTE) spaces will allow for increased enrollment in CTE programs and career exploration. These programs include, but are not limited to:

• Robotics
• Engineering
• Computer Aided Design
• Construction Technology
• Coding and Programming
• Graphic Design and 3D Animation
• Audio Visual Production and Broadcast Journalism

How will the bond impact my taxes as a homeowner?

The tax rate will increase approximately 10 cents.

What if I am 65 or older? NO TAX INCREASE

For residents 65-years and older, their school district tax bill will not increase, even if their property values increase (excluding property improvements) as long as an approved Homestead and Over-65 Exemption application is on file with the Appraisal District, and the property has been owned as of Jan. 1 of the tax year.

SCHOOL BONDS IN TEXAS

• How do school bonds work?

  Likened to a home mortgage, a voter-approved school bond allows a school district to borrow funds to finance capital projects. The Board of Trustees authorizes bond elections, and State law grants the Board the authority to sell bonds.

  How are Texas schools funded?

  A school district’s tax rate consists of two parts:

   

  • Maintenance and Operations (M & O) which funds the General Operating Fund, which pays for salaries, supplies, utilities, insurance, equipment, and the other costs of day-to-day operations; and

   

  • Debt Service (Interest & Sinking or I & S) can be used for a variety of special purposes, assuming voter approval. For example, they may finance facility construction and renovation projects, acquire land, or purchase capital equipment, such as technology, and transportation, such as buses.
• Where does the I & S money come from?

  From school bonds. Likened to a home mortgage, a voter-approved school bond allows a school district to borrow funds. The Board of Trustees authorizes bond elections, and Texas law grants the Board the authority to sell bonds. Prior to any bond vote, a volunteer citizen committee is usually created to develop a bond package for presentation to the Board of Trustees. The Board approves the bond package – the specific uses of bond monies and the estimated costs for each project included in the bond. After voter approval, the school district can sell bonds to investors who are repaid their principal plus interest. Payout is limited by law to 40 years. The district sells bonds that mature at different times, so bond expenditures for items with a shorter lifespan are paid off before the purchase becomes obsolete. This also allows the district to capture the lowest interest rates available. Importantly, bonds do not cost the district anything until they are sold. A district receives a higher rating due to the guarantee by the Texas Permanent School fund, having a strong fund balance, and maintaining a record of financial management excellence. Of course, market conditions will affect the actual interest rates, which may be higher or lower than the original estimates.

• Why is bonding a good idea?

  As state agencies, school districts rely on M & O funds to pay for the day-to-day education of the district's children.
  Bonds allow districts to spread the cost of expensive projects across time without affecting the district’s normal educational operations. Also, bond funds all stay with the district, and they are not subject to state recapture, fluctuations in revenue due to state mandates, or other negative economic influences. In short, bonds save and protect taxpayers while allowing for essential, ongoing facility development and other capital expenses to be funded.

• How do bonds work?

  Voters approve a specific dollar amount— or the maximum amount the district is allowed to sell without another election. The school district may then sell their bonds as ‘municipal’ bonds when funds are needed for capital projects, usually once or twice a year.
  The interest rate paid is based on the district’s bond rating and the interest rates in effect at the time of sale.
  Districts benefit if they have a higher bond rating, meaning a lower interest could be charged. Principal and interest on the bonds are repaid over an extended period with funds from the Debt Service tax rate. (Source: TASB).

• Thus, there are two parts to any bond process:

  1) bond authorization that specifies the amount of bonds the district is authorized by the voters to sell, and
  
  2) bond sales that may occur over a period of time with the date and amount of each sale determined by the Board on an as-needed basis. (TASB).
  
  Note that a district is not obligated to spend all the authorized monies but cannot exceed the authorization.