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. Another way to look at it is that a school bond is similar to a promissory note – it is a promise to pay back a certain amount of money that is being borrowed for a specific use, and it will be paid back with interest. There are state and federal laws and regulations on how school districts issue bonds and how the bond proceeds can be used. School districts may issue bonds to pay for construction, acquisition and renovations of school buildings; acquisition of sites for school buildings; purchasing equipment for school buildings and buying buses.

Under Texas law, proceeds of bond sales may only be used to pay for items with a useful life of more than one year. Texas law governs what revenue raised from school bonds may be used for. Texas Education Code §45.001(a)(1) says bonds may be issued for:

“(A) the construction, acquisition, and equipment of school buildings in the district;

(B) the acquisition of property or the refinancing of property financed under a contract entered under Subchapter A, Chapter 271, Local Government Code, regardless of whether payment obligations under the contract are due in the current year or a future

(C) the purchase of the necessary sites for school buildings; and

(D) the purchase of new school buses.”

Bond proceeds may not be used for recurring expenses such as the district’s payroll or utilities.

A district's property tax rate consists of a maintenance and operations (M&O) tax rate and an interest and sinking (I&S) tax rate. The M&O tax rate provides funds for maintenance and operations like salaries and utilities. The I&S tax rate, sometimes called the debt service tax rate, provides funds for payments on the debt that finances a district's facilities like bonds. The I&S tax rate is set at a rate that allows the district to pay the principal and interest payments due each year.

When the district sells bonds to finance capital improvements the debt is structured in line with the life expectancy of the capital asset.  For example, if the district sells bonds to pay for technology devices such as laptops or ipads, the payments for that debt is due within seven years.  If the district sells bonds to pay for a new building, the payments for that debt are made over 30 years.  

The district has issued bonds in various years and currently makes the principal and interest payments on all of that debt according to the debt schedule.  As debt is paid off, the overall debt of the district is reduced.  As new bonds are sold, the overall debt of the district is increased.  The goal is to manage the amount of overall debt for the district while balancing the capital needs of the district.

The district has taken advantage of recent reductions in interest rates to refinance its debt through the issuance of refunding bonds.  The district engaged in three bond refundings in 2020-2021. The results of these refundings is a $13.9 million savings in interest payments over the life of the bonds. 

Yes. Assigned in 2021, Coppell ISD’s bond ratings are Aaa/AA+, the highest ratings assigned to Texas school districts by Moody’s, Fitch Ratings, and Standard & Poor’s Rating Agencies. All items promised in the 2016 bond have been addressed and/or are in progress. 

For 19 consecutive years, Coppell ISD has earned the highest rating of “Superior Achievement” in the state’s Schools FIRST (Financial Integrity Rating System of Texas) program. This rating shows that Coppell ISD’s schools are accountable not only for student learning, but also for achieving results cost effectively and efficiently. The report is based on staff, student and budget data that the financial services team submits annually to the Texas Education Agency.