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Bond & Facilities Projects
Bond & Facility Projects
A Guide to School Funding: General Obligation Bonds
What is a General Obligation (G.O.) Bond?
A General Obligation Bond is a long-term loan that a school district takes out to finance the construction, renovation, or acquisition of school facilities. The loan is paid back over a period of many years (typically 20-30 years) with funds from an increase in local property taxes.
How G.O. Bonds are Used:
- Bond funds are restricted by law and can only be used for "capital projects," which means they are for building, renovating, or repairing school facilities. They cannot be used for day-to-day operational expenses, such as teacher salaries, administrative costs, or routine maintenance. Examples of projects funded by G.O. bonds include:
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Building new schools to address enrollment growth or relieve overcrowding.
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Modernizing and upgrading existing classrooms, labs, and libraries.
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Making essential safety improvements, such as seismic retrofitting and fire safety systems.
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Repairing roofs, plumbing, electrical, and HVAC systems.
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Upgrading technology infrastructure.
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How the Process Works
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Voter Authorization: The school district's board places a bond measure on the ballot, asking local voters to approve the district's ability to issue a specific amount of bonds.
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Sale to Investors: If the bond measure receives the necessary voter approval (e.g., a 55% majority), the district can then sell the bonds to investors to get the funds needed for the projects. The school receives the bond money at the time of sale. School districts typically sell bonds in separate, numbered issues rather than all at once, so each issue has its own maturity date and payment schedule.
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Project Allocation: The school district is responsible for allocating the bond money to fund the approved projects, such as new construction or improvements.
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Tax Rate Determination: The Auditor's Office sets the tax rates based on the value of the district, the principal and interest owed, and the reserves in the debt service fund. This tax is an "ad valorem" property tax, meaning it's based on the value of the property.
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Tax Collection and Repayment: The Auditor's Office creates the tax bills, which are then paid by taxpayers within the district. The amount of debt service on the tax bill is calculated by multiplying the property's value by the tax rate.
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Distribution to Bondholders: The Auditor's Office apportions the collected funds to the debt service fund. These funds are then used to pay the principal and interest to the bondholders.
Key Distinctions: G.O. Bonds vs. Other Taxes
It's important to understand the difference between a General Obligation Bond, a parcel tax, and a general property tax, as they each serve a different purpose.
- Note that Tax boundaries are sometimes different from school district boundaries. Some taxpayers will pay taxes for one school district but their children attend school in another district.
General Obligation (G.O.) Bond FAQs
Are there any exemptions for senior citizens?
No one is excluded or waived from paying General Obligation Bond taxes, including senior citizens. If a senior citizen states they are waived from other taxes, they are referring to Direct Charges or Parcel Taxes. These taxes are different from General Obligation Bonds.
Can G.O. Bonds funds be used for othere expenses?
No, with very limited and specific exceptions. General Obligation (G.O.) bond funds are legally restricted to be used only for "capital projects," which are large, one-time investments in the district's physical infrastructure.
What CAN G.O. Bond Funds be used for:
- Construction and Renovation: Building new schools, modernizing existing classrooms, and adding new facilities like science labs or athletic fields.
- Major Repairs: Replacing major building systems like roofs, HVAC systems, and plumbing.
- Equipment: Furnishing and equipping new or renovated facilities with items like computers, furniture, and lab equipment.
- Project-Related Salaries: The one exception to the "no salaries" rule is for district employees who are directly performing administrative oversight work on bond-funded construction projects. For example, a project manager's salary may be paid from bond funds because their work is essential to the completion of the capital project. This is subject to strict legal and audit oversight to ensure the costs are directly and appropriately linked to the bond projects.
What CANNOT G.O. Bond Funds Be Used For?
- Salaries and Benefits: Bond funds cannot be used for the salaries or benefits of teachers, administrators, or other district employees who are not directly working on a bond-funded construction project.
- Routine Maintenance: Day-to-day expenses, such as repairing a leaky faucet or replacing a broken window, are considered routine maintenance and are paid for with the district's General Fund, not with bond money.
- Instructional Materials: Funds cannot be used to purchase textbooks, library books, or other classroom supplies.
- School Operations: Bond funds cannot be used to pay for utilities, insurance, or other ongoing operational costs.
Oversight & Accountability
Because General Obligation Bonds involve a significant investment of taxpayer money, strict accountability measures are in place to ensure the funds are used as promised.
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Citizens' Bond Oversight Committee: If a bond is passed under Proposition 39, the district is required by law to form an independent Citizens' Bond Oversight Committee (CBOC). The committee's purpose is to review the expenditure of bond proceeds and inform the public. The CBOC typically reviews annual financial and performance audits and ensures the funds are used only for the specific projects approved by voters
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Annual Audits: The district is required to conduct annual, independent financial and performance audits to ensure bond funds are spent on the specified projects and not for any other purpose.
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Citizens' Bond Oversight Committee
The Citizens' Bond Oversight Committee ensures that bond funds are used responsibly for school improvement projects. The committee verifies that funds are allocated for appropriate capital expenses and not for everyday operational costs, ensuring transparency and accountability in the use of public resources.
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Bond Audits
Bond audit reports provide detailed financial reviews of bond fund expenditures and ensure compliance with approved projects and financial standards.
Documents & Information
In this section, you will find important documents and information regarding our projects and services. Access prequalification notices, contractor applications, board updates, project schedules, budget reports, and more. Click on the links below to view or download specific documents.
Bonds & Projects
This section provides an overview of our ongoing and completed projects funded through various bond measures. Learn bout initiatives, master planning efforts, and the comprehensive updates included in our Facilities Master Plans.
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Facilities Master Plans 2017
Includes updates
Projects by School Sites
In this section, you can explore the various enhancements made at our schools through bond funding. Each project is designed to modernize facilities, improve safety, and provide state-of-the-art resources for our students and staff. Click on the links below to learn more about the specific projects completed, underway, and planned at each school site.