Board Presentation • BSC 2025

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 bonds, it must go to the voters for approval.

Bond funds can be used to pay for new buildings, additions, 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.

School districts are required by law to ask voters for permission to sell bonds to investors 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.
 

The Bond 2025 Steering Committee, comprised of 25 parents, community members, business partners, and TISD educators. The Committee was tasked with keeping within a framework of eight charges, including considering the educational needs of all students, facility needs based on growth, support for all programs – co-curricular and extracurricular, balancing educational goals against taxpayer resources, while keeping community values in mind. After analyzing current enrollment, school capacities, and demographic projections, the committee made recommendations to the Board of Trustees which led to the Board voting unanimously to have a 2025 bond election.

The district is complying with state law that requires certain projects, like technology devices and stadium upgrades, to be separated into different propositions. Voters should cast their ballot on each of the four propositions. 

If approved, taxpayers in Tomball ISD will not see a Total District Tax Rate increase as a result of this bond.

Tomball ISD works diligently with our professional financial advisor to determine the maximum debt capacity that the District can support with the current total tax rate.  In determining our debt capacity a number of factors are considered and evaluated while taking the most conservative approach to each of the following:

• Existing Debt Obligations - The total tax rate must be able to support the existing debt obligations and the addition of a potential bond package.
• Tax Base Growth - Projected tax base growth is based on declining growth in the tax base over the next five years, with absolutely no growth at all in the years after that.
• Issuance of Debt - Voter approval of a bond package does not result in all debt being issued at one time.  Tomball ISD has a history of funding bond packages through the multiple issuances over several years.  For Bond 2025 the assumption is that funding for any voter approved propositions would be issued in 3 sales over each of the next 3 years.  Staggering the issuance of debt ensures that the District is not incurring interest costs on debt that is not yet needed to support the cash flow needs of the bond projects.
• Future Interest Rates - Tomball ISD estimates the impact of interest on our debt capacity using a conservative projection of interest rates that exceeds current and projected interest rates at the time of sale.  This approach is intended to provide a worst-case projection of the interest costs that could be associated with the issuance of debt.
• State Funding - The State of Texas provides "hold-harmless" funding to offset the impacts of previous constitutional amendments that have increased the homestead exemption and resulted in the loss of property tax revenue that would have been received to support the repayment of debt.  This "hold-harmless" funding is factored in when determining the amount of funding available to support any new debt. 

In addition to not increasing the total tax rate, Tomball ISD is committed to conservative debt management practices when issuing voter authorized debt.

• The State of Texas allows school districts to issue debt with maximum maturities of 40 years.  However, Tomball ISD by design carries no outstanding debt beyond 25 years, with an average maturity of roughly 15 years.  The ability to maintain a shortened debt structure reduces the interest costs over the life of the debt.
• Tomball ISD has been able to issue debt at a premium, meaning that the District is able to receive the full amount of voter authorized proceeds without issuing the full amount of principal debt.

• From time to time, the District has opportunities to refinance outstanding Bond issues with lower interest-bearing Refunding Bonds.  Market conditions determine the amount of Bonds to be refinanced, as well as the amount of interest cost savings generated by the District.  Additionally, the District has an opportunity to pay-off or “defease” higher interest rate Bonds with excess Debt Service Fund balance, which reduces the amount of Bonds outstanding and generates interest cost savings for the District.  The District utilizes both debt management tools to reduce the total debt service of the District and allow the District to minimize the tax rate impact of future Bond issues.  Since 2008, the refunding and defeasance program has resulted in total savings of $69,450,103.

With the combination of conservative tax base growth and ongoing District debt management practices, Tomball ISD has the capacity to authorize Bond 2025 with no increase to the total tax rate.

Bond planning for the district’s current and future needs is one of the fundamental duties of school boards and district administrators. As such, there is a constant evaluation of facilities and other needs in light of the changing district population, the age of district-owned structures, changes in technology, and changes in instruction. When the district determines that it has needs beyond the capacity of the maintenance and operations budget, the district seeks input from a citizens’ committee and the Board may call a bond election.

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 Harris/Montgomery County Appraisal District, and the property has been owned as of Jan. 1 of the tax year.

No, natatorium projects are not included in the 2025 bond proposal. However, updates to both natatoriums are planned and will be paid through the district’s general fund, not through the issuance of bonds.

No.  Through discussions in preparation for the 2025 bond, the Tomball ISD Board of Trustees and administration determined no new natatorium will be built at this time. Infrastructure and equipment updates at the district’s two existing natatoriums are being planned.

A second Pre-K Center is proposed for students on the south side of the district to assist with growth and relieve the current Early Excellence Academy. Students who will attend Pre-K Center #2 will feed into the following Elementary Schools: Canyon Pointe, Grand Oaks, Lakewood, Wildwood, Willow Creek, and West. 

The district is working to finalize the site for ES #13 and will announce as soon as possible. The New Tomball Intermediate will be located at the Tomball Innovation Center. 

Student and staff technology devices are on a six-year replacement cycle. 

Construction or improvements to an athletic stadium with seating for more than 1,000 spectators must be in a separate proposition from school buildings or stadiums with seating of less than 1,000 spectators.  

At facilities with seating for less than 1,000 spectators, the following projects are included: turf installation at junior high football fields and replacement at Tomball Memorial HS, safety netting at backstops, replacement of bleachers at Tomball HS gyms, and upgraded lighting systems at athletic facilities. 

Anyone who is a registered voter and lives within the Tomball ISD boundaries is eligible to vote in this election.

Voter registration applications are available in most government buildings. Learn more about registration on the Voting tab.

To see if you are registered to vote, click one of these links: Harris County search or Montgomery County search.

Polling locations will be announced soon and will be posted on the Voting tab.