The City currently funds projects several ways, including through our general fund, enterprise funds, sales taxes, sale of bonds, development impact fees, and cost sharing with federal and state funding sources.
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Over the past 50 years, the City of Boerne has utilized general obligation (GO) bonds to restore, replace, and expand infrastructure and capital assets across the city. GO Bonds are a debt obligation issued by local governments to fund public purpose capital improvements, such as roads and public facilities. GO bonds are secured by and payable from the City’s pledge of ad valorem tax levied on all taxable property within the City. GO Bonds are proposed and voted on in citywide elections.
Since 1972, the City of Boerne City Council has sent four Bond Elections to the voters for their approval. Below is a brief timeline and background on those elections.
September 1972 – The Boerne City Council voted to seek voter approval of the issuance of $1.07 million for utility improvements and extensions. There were three proposals on the ballot, and all three were approved by voters.
Prop 1: $1,025,000 for waterworks improvements and extensions. For = 201, Against = 21
Prop 2: $28,000 for sewer improvements and extensions. For = 205, Against = 16
Prop 3: $17,000 for natural gas improvements and extensions. For = 200, Against = 20
April 1987 – The Boerne City Council voted to seek voter approval of the issuance of $3 million for street improvements, fire station facilities and library facilities. There were four proposals on the ballot, and two were approved by voters.
Prop 1: $2,000,000 for street improvements. The project included Esser Road, Oak Park, W. Highland, W. Hosack, Advogt, Frey, Hickman, Kronkosky, Schweppe, Becker, Stahl, James, Theissen, Plant, Live Oak, Frederick, Schleicher, North, Johns Road, Phil Wilson, Dailey, Roeder. For = 360, Against, 287
Prop 2: $625,000 for fire station facilities. For = 342, Against = 301
Prop 3: $300,000 for street improvements for West Theissen Street Crossing. For = 165, Against = 469
Prop 4: $75,000 for library facilities. For = 242, Against = 395
November 2001 – The Boerne City Council voted to seek voter approval of the issuance of $3.625 million for street and drainage improvements and to purchase and equip a new fire truck.
Prop 1: $2,740,000 to construct street and drainage improvements and purchase land (widen and realign Esser Road at River Road). For = 87, Against = 77
Prop 2: $525,000 to purchase and equip a new firetruck. For = 84, Against = 80
May 2007 – The Boerne City Council voted to seek voter approval of the issuance of $21.47 million public safety upgrades, a new library, green space/land acquisition, trail/sidewalk improvements.
Prop 1: $10,250,000 for public safety projects including a new Police Department Headquarter, Municipal Court, Expansion and remodel of Fire Station No. 1. For = 866, Against = 418
Prop 2: $5,000,000 for a new municipal library. For = 860, Against = 446
Prop 3: $830,000 to construct new sidewalks. For = 863, Against = 419
Prop 4: $1,990,000 for municipal trails and pedestrian paths. For = 745, Against = 556
Prop 5: $3,400,000 for parks improvements and purchase land for future park space. For = 813, Against = 493
Voters approved raising the tax rate by six cents, however, due to the increase in property values within the City limits, the collections were higher than expected and the tax rate was ultimately increased just two cents. All projects from the 2007 Quality of Life Bond have been completed.
Homeowners who are 65 or older or disabled whose City taxes are frozen when the bonds are issued will not have their property taxes increased.
Questions and comments about potential 2022 Boerne Quality of Life Bond can be directed to [email protected]
If the bond goes to the ballot and passes in November 2022, the City will develop a project bid schedule. The first bonds would likely be issued in early 2023 to allow the projects to start as soon as possible.
If voters approve the proposition, the City anticipates raising the property tax rate once the bonds are issued. The City works to balance property tax rates with needs for other services, such as police, fire, transportation, and more.
Residents are the drivers of the development of this bond. Over the past five years the City has solicited resident’s feedback during our 2018 Master Plan creation, Community Transportation Committee, and with our first-ever Citizen Survey in 2021. Most responders said they want to see the City focus on investing in roads and intersections, green space, and managing and improving mobility. Read the full Citizen Survey here.
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 capital projects the entity wouldn’t otherwise be able to afford. 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, but will use other methods of sale if the market calls for it. 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.
The City does as much as we can each year to maximize the annual capital improvement budget, but our infrastructure needs are greater than what annual funding can support. GO bonds offer the City a cost-effective financial tool to address a large number of both deferred maintenance and new infrastructure projects over the course of several years.
Additionally, the City only issues GO bonds when a need has been identified. If the proceeds aren’t needed, like when a project doesn’t move forward, the City won’t issue the bonds. By borrowing the money upfront for large capital projects like road construction, the City is also able to lock-in construction prices upfront, which minimizes inflation in project costs. And lastly, funding large projects over a number of years through the repayment of debt increases taxpayer equity. Texas’ population is expected to double in the next two decades and new residents are moving to Boerne every year. If the City were to pay for large projects each year with current taxes, then current taxpayers would be the only ones paying for growth. By matching a project’s funding to the number of years it will be in service, every generation of taxpayers who uses that asset can help pay for it.
If the bond is approved, we will not know who will buy the GO bonds until they are sold in the market. Boerne typically sells bonds competitively but will choose a negotiated sale or private placement if it is in the best interest of the City of Boerne and our taxpayers.
That varies based on the project. Federal tax law does not allow the City to sell bonds that exceed the useful life of the project being financed. So, if a road is expected to last 20 years, the bond cannot exceed 20 years.