Bond FAQs

What is a Bond?

A municipal 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 investors to raise funds to pay for the costs of construction, renovations, and equipment.

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 to renovate existing buildings or build a new school. Essentially, it’s permission to take out a loan to build, renovate, 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.

Why do school districts sell bonds?

Most school districts in Texas utilize bonds to finance renovations and new facilities. This bond would allow the district to finance additions and renovations without impacting the District’s regular budget items such as school programs, teachers, and staff.

How is the District’s 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 tax is used to operate the school district, including salaries, utilities, furniture, supplies, food, gas, etc. The I&S tax can only be used for the repayment of bonds. Bond sales only directly affect the I&S rate.

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, for new or existing buildings, and large-ticket items such as school buses. Bonds cannot be used for salaries or operating costs such as utility bills, supplies, building maintenance, fuel, and insurance.

If the bond were to pass, what would the construction bidding process entail?

Gallagher Construction serves as the Construction Manager-Agent, allowing for local participation from qualified bidders. This means that once the construction documents by the architect are complete, Gallagher writes a competitive sealed proposal (CSP) for each construction division. This allows local trade contractors and small general contractors to participate in the bidding process as long as they are qualified. For inquiries regarding qualification requirements, please email Rhett Gallagher at

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