Bonds – Invest in Lewisville

Like all cities, the City of Lewisville sells bonds to pay for large projects over time.

In 2021, Lewisville voters approved a $95 million bond package for a new public safety center to house the Lewisville Police Department and a new Fire Station #1. It is currently under construction, and did not require a tax increase.

With its AAA credit rating, Lewisville is able to obtain excellent low interest rates and pay off its debt quickly with less impact to taxpayers. According to the National League of Cities, interest rates are now around 3.66%, which is only slightly above the 5-year average for cities with good credit.

If the bond propositions pass, the city will use the authority provided by the voters to issue bonds over the next 10 years or so up to the total amount approved, to be used towards the projects the voters approved. Each of these bonds will be paid back over 16 years, using money collected by the interest and sinking fund portion (currently $0.122320 per $100) of the city’s part of your property tax rate.

Lewisville uses a very conservative approach to estimating tax revenue and the cost of borrowing, and thus will advise voters that in the worst case, this could eventually increase your property tax rate by up to 1.5 cents per $100 property valuation. Based on 2023 values, that is less than $5 per month for the owner of a median-valued home.

But, in Lewisville’s history, the rate increase has been rare or minimal, and the plan this time by the city’s financial staff is to try to get these projects done without raising the rate at all.

Thrive, Lewisville’s multigenerational recreation center was approved by voters in the 2015 bond package. At the time, voters were promised a tax increase of no more than 1.8 cents, but the overall tax rate decreased by about 1.7 cents.

Inflation

It can be difficult to predict what the economy will do next week, let alone 10 years in the future. For this reason, the conservative approach was to assume the worst case for inflation over this period. For this reason, all of the projects have built-in estimates for inflation added to the estimated cost of what the project would cost today.

We think it’s very likely that the inflation we’ve seen over the past couple years will cool off dramatically to more historically average levels, which could free up funding to possibly move up some of the projects that didn’t quite make the cut. Nobody can promise this, but we know that our elected leaders and city staff will be closely watching it each year, and are empowered to take whatever actions make the most sense to get the best deal and keep our tax rates low.

We also know that your elected city council remains accountable for these projects and all spending under this bond program.