How does a bond work?

A general obligation bond (GO bond) is a common financial tool used by governments that is secured by and payable from a pledge of ad valorem tax levied on all taxable property within the City to repay bondholders over the life of the bonds.

Generally, banks or bond underwriters provide a governmental entity funds up front for capital projects to allow for the construction of large projects the entity wouldn’t otherwise be able to fund in one fiscal year. The governmental entity then repays those funds, including interest, over time.

In Texas cities like Boerne, GO bonds are typically sold in a competitive sale to ensure the lowest interest rate. Interest on the bonds is tax exempt to the bondholders because the City of Boerne is a government entity and the projects are public projects. 

Show All Answers

1. What is a general obligation bond?
2. How did residents vote in past Bond Elections?
3. How much did taxes increase for the 2007 Bond Election and are the projects completed?
4. If the 2022 Quality of Life Bond goes to the ballot and is approved by voters, will it increase the property taxes paid by homeowners who are 65 or older?
5. What if I have a question or comment about the proposed Boerne Quality of Life Bond?
6. When would the first bond projects be under construction?
7. Will the Quality of Life Bond Election bond increase taxes?
8. How have residents been involved in developing this bond?
9. How does a bond work?
10. How does the City currently pay for projects?
11. Why not just do these projects on a pay-as-you-go basis?
12. Who would buy the GO bonds?
13. How long would the City be paying off the bond?
14. How was the proposed Northside Community Park designed?