What is a bond?
Texas independent school districts issue bonds to pay for capital expenditures. Districts repay the bonds through revenue generated from property taxes collected by the district. School district bonds are similar to a home mortgage in that the borrower repays the lender — in this case, investors — over time and in accordance to the terms of the bond sale.
Since 1996, Richardson ISD has used a five-year bond cycle, asking stakeholders to approve a bond package to fund needed capital improvements to address student growth, for the district’s aging facilities, and academic program needs.
What is a capital item?
Capital items have a useful life of more than one year, and by law, only capital items can be paid for with the proceeds of bond sales. Examples include, but are not limited to, facility construction or renovation, land acquisition, computers and technology infrastructure, library books, curriculum materials, buses, musical instruments, and uniforms.
How can bond dollars be used?
Under Texas law, proceeds of bond sales may only be used to pay for items with a useful life of more than one year. Bond funds can be used to pay for new buildings, additions and renovations to existing buildings, land acquisition, technology, buses, musical instruments, uniforms and equipment, among other items. These items include, but are not limited to, facility construction or renovation, computers, library books, curriculum, calculators, musical instruments and uniforms, among others. Bond proceeds may not be used for recurring expenses such as the district’s payroll or utilities.
Much of the proceeds from recent bond packages have funded renovations to RISD facilities, most of which were built more than 50 years ago. Some of the projects funded through bonds this century include: three new elementary schools (Audelia Creek, Carolyn Bukhair, Thurgood Marshall); substantial renovations at 16 campuses; stadium upgrades; construction of multipurpose activity centers at all four high schools; library renovations at all elementary schools; increased security systems at all facilities; and expanded CTE programming.
Was the community involved in determining what projects and items should be included in Bond 2021?
Yes. The projects and items that RISD trustees included in Bond 2021 came at the recommendation of the bond steering committee, which consisted of more than 50 RISD taxpayers, parents, teachers and staff. The group met multiple times in 2020 to study facility, equipment and infrastructure needs before making recommendations to the board after analyzing facilities assessments, enrollment projections, financial data, results of a community survey and other data relevant in creating and maintaining learning environments that align with the RISD mission, vision and goals.
Committee members represented each of RISD’s four learning communities and reviewed projects from previous bond packages among the information studied in making the recommendation. The work of the RISD Bond Steering Committee is detailed on the BSC website.
Does RISD have a long-range bond plan?
Yes. Through the work of the bond steering committee, administration and trustees, there are two related elements to RISD’s long range bond plans.
- RISD’s transformation of existing junior highs into middle schools to accommodate the transition of sixth graders into middle schools is expected to span two bonds, the 2021 bond and 2026 bond. Based on the condition of the different aging campuses, some junior highs will be replaced while others will be renovated. Because of the poor condition of Lake Highlands JH, the middle school model will initially occur in the Lake Highlands learning community as a result of the 2021 bond, while the junior highs in RISD’s other three learning communities would be replaced or renovated to accommodate the transition to middle schools as a result of a 2026 bond.
- Most of RISD’s schools were built between 1952 and 1980. While periodic renovations and system replacements have occurred over the decades, the condition of many campuses has reached, or is expected to reach, the point where replacement or major retrofitting are less expensive than the ongoing repair and replacement of failing systems. A facility condition audit was conducted in 2020 and results were used as one data point in helping to determine RISD’s long range vision for replacement or retrofitting of its older schools. This effort is anticipated to span the next 20 years over four bonds: 2021, 2026, 2031 and 2036.
How does RISD’s move to a middle school model from a junior high model impact Bond 2021?
After extensive study, RISD made the decision to adopt a middle school instructional model with students in grades six, seven and eight attending middle schools, and students in grades Pre-K through grade five attending elementary schools. The academic and social/emotional benefits for students in a middle school model are numerous; and only about 5% of Texas school districts still use the junior high model.
This decision has a direct impact on Bond 2021 (and expected impact on Bond 2026). Additional space will be needed at all eight RISD junior highs to accommodate sixth grade students. Based on the condition of the different aging junior high campuses, some junior highs will be replaced while others will be renovated. These efforts are planned to span the 2021 and 2026 bonds. Sixth graders in the Lake Highlands learning community will be the first to transition to a middle school model as a result of work in the 2021 bond, while sixth graders in the other three RISD learning communities will follow as a result of work in a 2026 bond.
How does Bond 2021 impact Pre-Kindergarten opportunities for RISD families?
The facility changes that would result from Bond 2021 would permit full implementation of RISD’s Pre-K for All initiative, including space for every RISD family seeking a high-quality full-day Pre-K opportunity. Currently, RISD has space to offer Pre-K to families eligible under state guidelines, including income, language and other criteria.
The transition to a middle school instruction model would be a key driver in RISD becoming able to offer Pre-K for All because of the space that would open at elementary schools.
The academic benefits of high-quality full-day Pre-K are substantial. The correlation between Pre-K, early literacy, and academic success over a child’s school career is well established. Bond 2021 would allow RISD to offer these opportunities to every family, either at no cost for families meeting the state of Texas eligibility criteria or through a tuition model for other families.
What is overflow and how will Bond 2021 impact it?
For many years, part of RISD’s strategy to accommodate enrollment growth at the elementary level has been to reassign students to other elementary schools as grade levels become full at a neighborhood school. The overflow process continues to be used in RISD today, and sending families away from their neighborhood school is not an ideal method to help manage growth. With the decision to adopt a middle school model that will eventually transition sixth grade students to junior highs transformed through Bond 2021 into middle schools, every RISD elementary campus will have additional classroom space. Portions of the elementary space will be used by Pre-K classrooms as RISD’s Pre-K for All initiative continues implementation (see separate FAQ), while remaining space can be used to ensure that all RISD families have space at their neighborhood elementary campus and allow RISD to formally end the overflow process.
During periods of substantial enrollment growth, thousands of RISD students have been overflowed away from their neighborhood elementary school due to lack of space.
Overflowed RISD Elementary Students
- 2000-01: 637
- 2001-02: 670
- 2002-03: 653
- 2003-04: 386
- 2004-05: 549
- 2005-06: 414
- 2006-07: 225
- 2007-08: 568
- 2008-09: 508
- 2009-10: 671
- 2010-11: 736
- 2011-12: 804
- 2012-13: 724
- 2013-14: 826
- 2014-15: 680
- 2015-16: 804
- 2016-17: 835
- 2017-18: 685
- 2018-19: 352
- 2019-20: 318
When was RISD’s last bond referendum?
Taxes and Finances
Would RISD’s property tax rate increase if the Bond 2021 package is approved?
RISD plans to keep its debt service tax rate at the current $0.35/per $100 of taxable value even if RISD voters approve Bond 2021.
What is RISD’s tax rate, and what would it be if Bond 2021 were to pass?
RISD’s total tax rate is $1.4047 per $100 of taxable assessed value. The tax rate is separated into $1.0547 for maintenance and operations (M&O Tax Rate) and $0.35 for principal and interest payments (I&S Tax Rate) on debt outstanding. The I&S tax rate would not change if Bond 2021 is approved by voters.
If voters approve Bond 2021, how could RISD issue bonds to pay for projects without increasing the tax rate?
As part of its financial and budgeting philosophy, RISD aggressively structures and repays bond debt, while taking advantage of opportunities to refinance debt into lower interest rates when possible in a process known as refunding.
The primary benefit of the district’s philosophy is the significant present-value savings that occur through lower interest rates achieved by the refinancing. Another benefit of RISD’s aggressive repayment of bonds is the additional bonding capacity it creates while keeping the tax rate the same on property within the district.
An additional factor that has allowed RISD to repay bonds more quickly is the higher- than-projected revenue generated by continued growth in property values across the district. This allows RISD to accelerate repayment of previously issued bonds.
In 2019, the Dallas County portion of RISD’s total assessed valuation rose more than 12% to $14.9 billion.
Why does the ballot language say this is a tax increase?
Although RISD plans to keep its current debt service tax rate if the voters approve Bond 2021, voters should know that a new state law requires that the statement “This is a property tax increase” must appear as part of every Texas municipal bond proposition ballot, regardless of whether passage of the proposition would result in a tax rate increase. RISD will issue a Voter Information document, which explains how ad valorem taxes could be affected based on assessed property values with new bond debt.
Are property taxes frozen for RISD residents over age 65?
Yes, homeowners 65 or older qualify to have their property tax levy frozen by the Dallas Central Appraisal District at the level it is when they turn 65. From that point forward, the tax levy on their property cannot exceed the frozen levy amount, even if the home value rises or the tax rate increases.
What are RISD’s bond ratings and how do they impact the district’s finances?
RISD maintains a triple-A rating from Moody’s Investors Service and an AA-plus rating from Standard & Poor’s. Only a few other Texas school districts have this combination of high bond ratings. The high ratings help RISD get the best possible interest rate on bond sale and also help lower the costs of issuance.
Moody’s analysts said RISD’s Aaa rating “reflects a strong financial profile characterized by prudent financial policies, healthy operating history and substantial available reserves including amounts held outside the general fund.”
Standard & Poor’s analysts said RISD’s “very strong levels of reserves are supported by a growing tax base and subsequent growth in property tax collections.”
Moody’s outlook on RISD’s credit rating is stable due to analysts’ “expectation that the district will continue to exhibit strong financial management resulting in stable financial operations and that its debt burden will remain manageable.”
What will happen if Bond 2021 is not approved by voters?
The district will need to fund most capital expenditures through emergency withdrawals from operating funds that could result in budget reductions and/or a property tax increase through the elimination of the local, optional homestead exemption.
Does RISD pay for shorter-life capital items like computers with long-term bonds?
One of RISD’s guiding principles for bonds – established during community input in advance of the 2001 bond – is to attempt to match the life of assets purchased with the length of the liability incurred to pay for them.
This means RISD’s goal is to not fund items like computers – with an anticipated useful life of five years – with a 30-year bond.
RISD’s structures bond issuances with this strategy in mind. Therefore, items are not being paid for beyond the period of use in the district, resulting in a very rapid debt repayment schedule. This strategy also helps RISD consistently achieve the highest stand-alone bond ratings among Texas school districts by independent ratings agencies Moody’s Investors Service and Standard & Poor’s.
What is the average home value in RISD?
The Dallas Central Appraisal District is the only entity that determines the market value of homes in RISD for taxing purposes. In 2020, the average market value of residential homes across all of RISD’s boundaries per DCAD is $288,794.
The DCAD market value of a home is the starting point of determining taxable value. Homeowners can reduce their taxable value through a series of exemptions, including application of a standard homestead exemption and also RISD’s local optional homestead exemption. Homeowners who are 65 years of age or older can apply to have their tax levy frozen.
RISD boundaries include portions of Richardson, Dallas and Garland. The portion of the city of Richardson north of the Dallas/Collin county line is not part of RISD.
When is Election Day?
Election Day is Saturday, May 1, 2021. Registered voters can vote early in person between April 19 and April 27. For more details, visit http://www.dallascountyvotes.org/
How do I register to vote?
New voters must register by April 1 through the Dallas County Elections Department.
Find the application and more information at http://www.dallascountyvotes.org/voter-information/register-to-vote/.
All registered voters in RISD are eligible to vote in the May 1 election. Find out if you are registered using the Dallas County online voter lookup tool.