Bond Election Frequently Asked Questions
What is a General Obligation Bond?
General obligation (GO) bonds are debt instruments issued by states and city governments to finance large capital improvements. Bonds are sold to investors and the proceeds from the sales of these bonds are used to pay for major capital investments that have a public purpose—such as the drainage, streets and mobility, and flood protection projects contained in League City’s 2019 Bond Program.
What is a bond program?
A bond program includes both the authority to issue bonds and the listing of the purposes for which the bonds may be used. General Obligation Bond Programs, such as League City’s 2019 Bond Program, require voter approval.
How are funds repaid that are received through the issuance of General Obligation Bonds?
General obligation bonds are backed by the full faith and credit of the issuing jurisdiction, in this case League City. This means the City is obligated to pay back the bonds plus interest by pledging its revenue and ad valorem taxing power. As such, the City may use a portion of its property tax revenue, or other revenues, to repay GO bonds in the form of annual principal and interest payments.
How did League City decide which items to include in the proposed bond program?
The projects in the 2019 League City Bond program were selected by the League City Council after months of presentations and recommendations by City staff, discussions and information gathering at workshops and council meetings, and with citizen input gathered at public hearings, town hall meetings, and online surveys.
How much money would the 2019 League City Bond generate if both propositions pass?
If both propositions A and B pass, League City would be authorized to issue bonds for $145 million.
When was the last time there was a General Obligation Bond on the ballot for League City voters to consider?
The last time a general obligation bond was on the ballot in League City was in 1992, 26 years ago.
What are the property tax implications under the proposed 2019 General Obligation Bonds?
If voters approve the two bond initiatives (Propositions A and B) along with the ¼ cent sales tax referendum (Proposition C), it would minimize the impact, if any, on the City’s property tax rate. If both of the bond initiatives pass but voters reject the sales tax referendum, the City anticipates raising the property tax rate by $0.014 per $100 valuation. When applied to a League City homeowner with an assessed home value of $250,000 with a homestead exemption, this would equate to an estimated increase of $28 annually in property taxes.
What will the 2019 bond propositions look like on the ballot May 4?