BOND BASICS
Bond Frequently Asked Questions (FAQs) are shared and will be updated as additional questions are asked by patrons. Patrons with questions should email travis.grubbs@sterlingcityisd.net
What is a Bond?
A school bond is a type of financial instrument used by school districts to raise funds for large capital projects, such as construction or renovation of school buildings, and infrastructure improvements. Similar to homeowners taking out a mortgage to fund the purchase of a new home, bonds are repaid over time with interest and are backed by the district's tax revenue. School districts are required by law to ask voters for authority to issue bonds to fund these types of projects. State law restricts the types of things that bonds can finance. For example, State law prohibits paying for salaries with bond money.
Why can’t the district pay for construction with the district’s operating budget?
Taxpayers see one school district tax rate on their property tax bill. However, that one tax rate is made up of two components: the district’s Maintenance and Operations (M&O) tax rate and the Interest and Sinking (I&S) tax rate.
Revenues generated from the M&O tax rate are used to pay the District’s operating costs, including salaries, utility bills, and maintenance expenses. The majority of a school district’s operating costs fund salaries for teachers and staff. In Alamo Heights ISD, that’s 90% percent of the budget. A district's M&O budget seldom has room for the large costs of construction projects that may be paid for on a “pay-as-you-go” basis.
Revenues generated from the I&S tax rate can be used only to repay outstanding district bonds. Similar to taking out a mortgage or a home equity loan for large home construction projections, districts rely on bonds to cover the large amounts that construction requires.
Can bond funds be spent on salaries for teachers and other staff?
State law prohibits the use of revenues generated from the district’s I&S tax rate to repay outstanding district bonds for salaries. Salaries are paid from the district’s M&O tax revenues.
What’s included in the proposal?
There are two propositions included in the Bond 2025 proposal. State law requires school districts to separate certain bond items into different propositions for voter consideration.
Proposition A includes renovations and additions to Athletic facilities, Buildings, the Site, and some miscellaneous items.
Proposition B includes new Teacher housing, and renovations to existing housing.
Why are there separate propositions for technology and athletics?
State law requires school districts to separate certain bond items, such as improvements to school facilities, versus Teacher housing, into separate Bond Proposals. The school's legal counsel determines this requirement.
When did the planning process begin and how was this proposal put together?
The District developed a Campus Improvements Plan in 2024, with input from Teachers and Faculty.
If the Bond 2025 proposal is approved by voters, design would begin in 2025 and construction would tentatively begin in summer of 2025. The anticipated timeframe is 18-24 months for completion. Construction schedules would be designed to be cost effective and minimize disruptions to student learning.
Will the community be involved in the design process?
The community will be invited to participate in the design process. None of the projects in the proposal have been designed yet. This is how bonds are typically developed. District staff and the Trustees develop the scope of the bond, a dollar amount is established based on that scope, and then the bond goes out for election. After the election, a timeline of projects is finalized. Once the timeline is established, the Architect and Construction Manager work with staff and the community to design and build the actual projects.
How will construction impact students?
Construction schedules will be designed to be cost effective and minimize disruptions to student learning. This includes scheduling work during the summer wherever possible and staggering projects so students won’t be disrupted by construction as they progress through SCISD schools.
Will there be more parking spots available?
Additional parking is included in the Bond 2025 proposal. Parking would be increased to supplement the football stadium and campus.
Budgets were developed taking current construction and labor market considerations into account, along with building in escalations and contingencies based on the projects being built over the next two years.