GENERAL BOND ELECTION QUESTIONS
1. 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 and new facilities.
2. 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. Essentially, the voters are giving permission for the District 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 construction projects.
3. How can bond funds be used?
Bond funds can only be used to repay debt for capital items like new buildings, additions and renovations to existing facilities, land acquisition, 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.
4. What does a bond election enable?
Alvin ISD has been classified as a fast growth school district for over a decade and this rapid growth is projected to continue. Approximately 1,200 new students enroll in Alvin ISD annually, which is nearly the equivalent of half the capacity of a high school or one and a half elementary schools per year. This bond would allow Alvin ISD to continue to manage this enrollment growth as well as address some of its aging campuses and district-wide safety and security.
5. Exactly how much is the proposed bond package?
The Board of Trustees called a bond election, Proposition A, in the amount of $480.5 million to be brought before voters. The District’s Citizen’s Advisory Committee provided a recommendation to the Alvin ISD Board of Trustees in June 2018 to call for a $480.5 million bond election and Tax Ratification Election with no increase to the tax rate for the November 6, 2018 ballot.
6. What exactly is included in the bond?
The November 2018 Bond proposes to build new schools for growth, provide safety and security upgrades district wide, purchase land for future school sites, and replace or renovate aging campuses that are inequitable to the district’s newest campuses. For a full list, visit What’s Proposed.
7. How was the bond package developed?
The proposals come from a recommendation developed by the District’s Citizen’s Advisory Committee made up solely of Alvin ISD taxpayers, including parents and other community leaders. The Committee met over the course of several months, in meetings that were open to the public, to evaluate the needs of the district. A secondary committee focused on school safety provided recommendations to improve safety and security throughout the district.
Tax Ratification Election Questions
1. What is a Tax Ratification Election “Penny Swap?”
A school district must hold a Tax Ratification Election (TRE) when it is asking voters to consider raising its Maintenance & Operations (M&O) tax rate above $1.04. The election provides voters the opportunity to approve, or ratify, the higher rate. Alvin ISD is proposing to increase the M&O tax rate by 13 cents, and at the same time, decrease the Interest and Sinking (I&S), or Debt Service, tax rate by an equal 13 cents, resulting in no increase to the current tax rate. This type of TRE is often called a “Penny Swap” because the exchange in pennies is tax rate neutral (no change).
2. Why would Alvin ISD hold a Tax Ratification Election “Penny Swap?”
The TRE “Penny Swap” is designed to maximize state funding opportunities and reduce the local tax burden while funding school construction bonds. The state contributes funding based on the M&O rate but not the I&S rate, making pennies on the M&O rate worth more than pennies on the I&S rate. The TRE “Penny Swap” would allow the school district to receive an additional $8.4 million annually in state funding, which would enable Alvin ISD to implement the proposed bond program with no increase to the current school tax rate.
3. What does Proposition B (TRE) say?
The Proposition B ballot language is set by law and, for the most part, can’t be changed by Alvin ISD.
Approving the ad valorem tax rate of $1.4500 per $100 valuation in Alvin Independent School District for the current year, the rate that is $0.13 higher per $100 valuation than the school district rollback tax rate, for the purpose of (i) increasing revenue for maintenance and operations and (ii) maintaining the prior year’s overall tax rate of $1.4500 per $100 valuation.
It can be confusing because the ballot language only addresses the Maintenance & Operations tax rate and does not explain that the Interest & Sinking rate will automatically be lowered by an equal 13 cents per the Resolution adopted by the Board of Trustees on August 14, 2018. Because the exchange in pennies is tax rate neutral (no change), the overall tax rate is maintained at its current rate of $1.45.
4. If the TRE “Penny Swap” is not approved, how will the district fund projects outlined in the bond proposal?
If voters approve the Bond Election, but not the TRE “Penny Swap,” Alvin ISD will not receive the increase in state funding. In this scenario, the approval of the bond projects would result in an increase, up to 9 cents, on the I&S tax rate.
5. (Question from Facebook) How is Alvin ISD able to complete the identified projects without a tax rate increase? Is the district just moving funds from one bucket of money, to another, to make it more palatable for voters?
The TRE “penny swap” is certainly a bit more confusing than a standard or traditional bond; however, the “TRE” is what enables voters to consider an option that does not have an associated tax rate increase.
The overall Alvin ISD tax rate is divided into two separate rates, or “buckets.” The first is Maintenance and Operations (M&O) and the other is Interest and Sinking (I&S). M&O pays to run the school district’s annual expenses and I&S pays the costs associated with previously approved bonds. Currently, it takes a .41 cent I&S tax rate to pay for previously approved bonds.
With approval of the penny swap, Alvin ISD would move $.13 cents from I&S over to M&O; however, it would still require the revenue from approximately $.41 cents to pay for previously approved bonds. The payment would now be coming out of both buckets ($.28 cents from I&S and $.13 cents from M&O).
Why does this matter? When a district raises their M&O rate above the standard rate of $1.04, the state ensures that districts receive the same revenue (equitable funding) per student. In Alvin ISD, that means the state contributes increased funding, which would be approximately $8.4M dollars next year, and would continue to increase as our student enrollment increases. [Note, in districts that have high property values per student, they would actually pay money back to the state on these pennies (i.e. “robin hood”). In Alvin ISD, the increased revenue would enable the district to cover the costs of prior bond payments, and the costs associated with the current proposition, with the same tax rate of $1.45 per $100 of valuation.
Side Note: School finance in Texas has become increasingly reliant on local property taxes, as opposed to state funding. The Texas Tribune recently published an article titled, “Analysis: Texas’ School Finance Problem in one Pesky Chart.” The article stated, “The local share (of public education funding) - the part funded by property taxes - has risen from 46.1 percent to 55.5 percent.”
The proposed Alvin ISD TRE “penny swap” would in fact put some of the school finance burden back on the state, where it has been historically.
6. (Question from Facebook) With the TRE “penny swap,” is the district reducing money they earmarked for repayment of current bonds, if so, it opens the door for a financial disaster?
We agree with the intent behind the question. If Alvin ISD was restructuring repayments on previously approved bonds, the district would be “kicking the can down the road” and it would be irresponsible. Please understand that is NOT what is happening with the proposed Alvin ISD TRE “penny swap.”
Currently, it takes an Interest and Sinking (I&S) tax rate of $0.41 to pay for previously approved bonds. Next year, it will require essentially the same rate. If the TRE “penny swap” is approved, $0.13 pennies would simply be moved from I&S over to the operational budget (M&O); however, the payments will continue to be made as they always have been, the revenue that is used will now be coming from two sources (M&O & I&S). It is important to note that revenue generated on M&O can be used to pay payments on the I&S side (i.e. former bond payments.). [Note: Money generated on the I&S side cannot be used to pay for operational expenses.)
Again, Alvin ISD is not restructuring, or extending, the payments on prior bond payments as part of the proposed TRE “penny swap.”
Financial & Tax Questions
1. How is a school district’s tax rate comprised?
Local public school taxes in Texas are comprised of two different rates: Maintenance and Operations, capped at $1.17 (voter approval required to adopt a rate above $1.04), and Interest and Sinking, capped at $0.50. Alvin ISD has a current M&O tax rate of $1.04 and I&S tax rate of $0.41 for a total tax rate of $1.45 per $100 of certified property value.
2. How can Interest and Sinking funds be used?
The Interest and Sinking (I&S) rate can only be used for payments associated with voter-approved bonds, which are used to fund longer-term capital improvements like the construction of new school and facility renovations.
3. How can Maintenance and Operations funds be used?
The Maintenance and Operations (M&O) rate funds daily costs and reoccurring or consumable expenditures such as teacher salaries, electricity, fuel, supplies, etc. M&O funds have more flexibility and can also be used to pay back bonds for the construction of schools.
4. How do increases to property appraisals impact school revenue?
Local property appraisals are set by the Brazoria County Appraisal District, not Alvin ISD. Per school finance laws, when local property values increase, the amount of state funding the District receives decreases to equalize the revenue per student. It is meant to ensure that all school districts, regardless of property wealth, receive “substantially equal access to similar revenue per student at similar tax effort.” So even though your home value goes up and it seems like the school district should be receiving more money, the district continues to receive essentially the same funding per student.
5. How will the proposed Bond and TRE affect my taxes?
If voters approve both propositions, there would be no increase to the current Alvin ISD tax rate, as the additional funds generated from the TRE “Penny Swap” would fund the bond projects. If voters approve the bond election, but not the TRE, funding of the bond projects would require an increase to the local tax rate, up to 9 cents. This equates to approximately $13.51 a month for the average taxable home value of $180,124. Existing state law freezes the tax rate of homeowners sixty-five years of age or older as long as an over 65 homestead exemption application has been filed with the local appraisal district.
If voters approve the TRE “Penny Swap,” but not the Bond Election, Alvin ISD will receive the increase in state funding, but the District would not have voter approval to finance the construction projects. In this scenario, there would be no increase to the current Alvin ISD tax rate.
6. If I am 65 years of age or older how will my taxes be affected?
Regardless of the result, Alvin ISD property taxes for citizens age 65 or older would not experience an increase as long as an over 65 homestead exemption application has been filed with the local appraisal district. According to state law, the dollar amount of school taxes imposed on the residence homestead of a person 65 years of age or older cannot be increased above the amount paid in the first year after the person turned 65 – regardless of changes in tax rate or property value – unless significant improvements are made to the home.
7. How can Alvin ISD fund new projects without increasing the tax rate?
The TRE “Penny Swap” (Proposition B) would provide authorization for the school district to increase the M&O tax rate by 13 cents, and at the same time, decrease the I&S tax rate by an equal 13 cents. The state contributes funding based on the M&O rate but not the I&S rate, meaning pennies on the M&O rate generate more revenue. The TRE “Penny Swap” would allow the school district to receive an additional $8.4 million annually in state funding, which would enable Alvin ISD to implement the proposed bond program with no increase to the current school tax rate.
8. How does a TRE “Penny Swap” result in more state funding?
A Tax Ratification Election is a provision in school finance to ensure equity for school districts across the state. If a school district has a Maintenance and Operations tax rate above $1.04, the state ensures the district will receive a guaranteed amount of money per student. For Alvin ISD, that means the district would receive additional state revenue, approximately $8.4 million annually.
9. How would an approved TRE “Penny Swap” affect Alvin ISD’s payments from previous bonds?
Alvin ISD’s bond payment schedule would not be lengthened as a result of the TRE “Penny Swap.”
The TRE "Penny Swap" would allow the Board of Trustees to simply change where the pennies are located within the overall tax rate. The revenue that the $0.13 generates will continue to pay (I&S) bond payments, just as before.
Currently, the $0.13 (that are available to “swap”) are located on the I&S (Interest and Sinking) tax rate. The revenue they generate makes bond payments. Following the “Penny Swap,” the $0.13 cents would now be on the M&O (Maintenance and Operations) tax rate; however, the revenue generated would continue to pay bond payments, just as they did before. Again, the overall tax rate remains the same.
[Note: Funding generated from the I&S tax rate can only be used to make bond payments. Conversely, funds generated on the M&O side can be used for the maintenance and operations of the school district; however, they can also be used to make bond payments.]
In other words, the bond payments would continue just as they always have; however, following the swap, the state would contribute increased funding that would then also be used to make bond payments (specifically the payments associated with the currently proposed bond package, should it be approved by voters).
10. What is the length of the bond terms?
Alvin ISD typically utilizes 30-year bonds.
11. (Question from Facebook) I would like to see the schools financial report. Where are the funds going?
That’s a great question. As an Alvin ISD tax payer, the district is accountable to you. This is only possible through openness and transparency.
Transparency has been a long standing non-negotiable in Alvin ISD. Various outside entities including the “Government Finance Officers Association” and the “Association of School Business Officials International” have given Alvin ISD awards for maintaining the highest levels of transparency based on what the district makes available for review, including the resources provided on the district’s website.
Regarding the currently proposed bond, line item costs are provided and available for review at www.alvinisd.net/bondtre. For an overview document, look at the option titled, “Presentation.”
Bond Proposal & Project Questions
1. What is the difference in the cost of Elementary #21 and Elementary #22?
The Elementary #22 budget includes funds to purchase land, while the funds needed to purchase the site for Elementary #21 were provided in the district’s last bond program (2015). In addition, the Elementary #22 budget also accounts for additional escalation (industry inflation) to account for being built three years after Elementary #21. Elementary #21 is projected to open in 2020, while Elementary #22 is projected to open in 2023.
2. What is the difference in the cost of Junior High #8 and Junior High #9?
The Junior High #9 budget includes funds to purchase land, while the funds needed to purchase the site for Junior High #8 were provided in the district’s last bond program (2015). In addition, the Junior High #9 budget also accounts for additional escalation (industry inflation) to account for being built three years after Junior High #8. Junior High #8 is projected to open in 2020, while Junior High #9 is projected to open in 2023.
3. How were the project costs developed?
The proposed project costs are turnkey budgets that account for everything that the district should need to spend to get the schools up and running. The budgets are based on the program of spaces (what is to be included in the project) and the level of quality and material types (50 to 75 year building). In addition to the construction cost, the total budget amount also includes escalation to account for rise in construction costs between now and when the project actually bids. It also accounts for costs associated with fees, permits, and surveying costs, and for everything to outfit the building including, furniture, fixtures and equipment.
4. Where will the new Junior High #8 be built?
Junior High #8 is planned to be built in the City of Manvel within the Meridiana development.
5. Why replace Alvin Primary and EC Mason and renovate/expand Harby Junior High?
Members of the Citizens’ Advisory Committee were focused on ensuring equity is maintained throughout campuses in Alvin ISD. Each of these campuses are nearly 40 years old, are undersized in many spaces, are much less efficient to operate and don’t meet current codes. Harby Junior High is the only junior high campus that has not been brought up to the district’s current size and standard. The chart below compares these three campuses to Alvin ISD’s most recent baseline elementary and junior high campus. (click on chart to enlarge)
Upon studying this data, the Committee made the recommendation to rebuild Alvin Primary and EC Mason and renovate/expand Harby Junior High to increase capacity and provide equity.
6. Why renovate and expand Harby Junior High instead of building an entirely new campus?
Alvin ISD completed a facility assessment of Harby Junior High, which found that deficient items had solutions feasible to address through renovations. The analysis showed that the campus can be renovated and expanded for approximately 75 percent of the cost to build new. Based on this report, the Citizens’ Advisory Committee recommended renovating and expanding the existing Harby Junior High. The campus would receive an additional classroom wing and other expansions to make it equitable in size to the district’s newest junior high model. Building systems would be upgraded to bring it up to energy code and the building envelope secured, including replacement of windows and exterior doors. It would be similar scope of work that was completed at Alvin Junior High School and it would make Harby comparable to all other junior high schools programmatically.
7. Where will a replacement school for Alvin Primary be built?
A replacement school will be constructed on the existing property between the existing Alvin Primary and Alvin Elementary buildings.
8. Will a replacement school for Alvin Primary stay a primary campus?
No. An Alvin Primary School replacement would be built as an 800-student K-5 elementary school, the district’s current standard. Current Alvin Elementary students (grades 3-5) would go to this replacement school or to the new Nelson Elementary.
9. Where will a replacement school for EC Mason Elementary be built?
A replacement school for EC Mason Elementary will be built on a new site to be determined. The current site is not large enough for the district’s 800-student K-5 elementary school model.
10. What will the district do with the existing EC Mason building?
The existing EC Mason facility could provide the District with a central location to be repurposed for student programs, including Options and Adapt.
1. Who is eligible to vote in this election?
Any registered voter who lives within the school district’s boundaries.
2. How do I know if I’m registered?
Look up your voter registration here.
3. Can I still register to vote in the election?
The deadline to register to be eligible to vote in the November 6 election is Tuesday, October 9.
4. After I have registered, when will I receive my Voter Registration Certificate?
You should receive a Voter Registration Certificate within 30 days. On Election Day, please bring your certificate to your local polling place if you have it. However, all that is required is a valid driver’s license or photo ID.
5. When and where can I vote?
Early voting begins Monday, October 22 and runs through Friday, November 2 and Election Day is Tuesday, November 6. Voters can vote at any Brazoria County voting location. For specific voting times and locations, visit the Voting page.
6. What do I need to bring when I vote?
Voters are required to present an acceptable form of photo identification, like a driver’s license, in order to vote in person in all Texas elections. Read more about photo ID requirements here.