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Board Approves First Bond Sale, Decreases Overall Tax Rate

Board Approves First Bond Sale, Decreases Overall Tax Rate


Due to the impact of House Bill 3, a school finance bill passed recently by the 86th Texas Legislature, and more favorable bond terms than originally anticipated, the Channelview ISD Board of Trustees adopted an overall tax rate of $1.3577 per $100 of certified property value, an almost four-cent decrease from the 2018-19 tax rate of $1.396.


Under the new tax rate of $1.3577.97 cents will go toward the maintenance and operations (M&O) fund, and 38.77 cents is for the interest and sinking (I&S) fund.


The maintenance and operations budget funds daily costs and recurring or consumable expenditures, such as teacher and staff salaries, supplies, food, gas and utilities. House Bill 3 compressed public school maintenance and operations tax rates in order to provide property tax relief to Texans. This resulted in a M&O decrease of 7 cents for the 2019-20 school year in Channelview ISD.


The I&S fund is used to repay debt for longer-term capital improvements approved by voters through bond elections. In July, the Board also approved the first bond sale of $70 million from the $195.4 million bond election approved by voters in May.


Bonds are sold in phases to match the construction schedule of the proposed projects. This was the first of three sales planned. The next sale will be in 2020, and the final sale will take place in 2021.


“We are very pleased that the timing of the bond sale was able to take advantage of historically low interest rates, resulting in a tax rate lower than what was communicated to voters during the election,” said Superintendent Greg Ollis.


CISD has maintained outstanding ratings from Moody’s, Standard & Poor's (S&P) and Fitch Ratings, the top three credit rating agencies. Those ratings allow CISD to achieve the lowest interest rates available for all bond financings. The original estimated interest rate was 4.25% and the actual secured interest rate for the initial $70 million sold on August 28, 2019, is 2.59%. This resulted in a 3.27-cent I&S rate increase for the initial
$70 million instead of a projected 3.75-cent increase.

 

 

Maintenance & Operations

Interest & Sinking

Total Tax Rate

2018-19

$1.04

$0.356

$1.396

2019-20

$0.97

$0.3877

$1.3577

 

 

“CISD continually looks for ways to make the most out of taxpayer dollars," added Ollis. "We will continue to effectively manage the district’s debt and finances and ensure economical and efficient operations."