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.