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Questions and Answers
Why does the ballot language say that the city can borrow money for up to 40 years?
The language used on ballot propositions by cities is largely dictated by state law, which mandates a maximum period of 40 years be stated. However, that doesn’t reflect actual practice in Lewisville, which is to use a 16-year term for bonds. Lewisville’s plan and practice for the last 30 years or so is to use 16-year terms.
How is it possible to borrow this money without raising the tax rate?
Your Lewisville city property tax rate actually consists of two components: M&O (Maintenance and operations) and I&S (Interest and sinking fund). The I&S portion of your tax rate is the smaller portion, and it is used only for paying off bonds used for the city’s large projects. It is expected that the rate you are already being charged will be enough to pay off the upcoming bonds. The reason is that as currently-existing bonds mature and get paid off, that frees up more funding to pay new bonds. It’s also expected that the combination of new properties and property value growth over the coming years will bring in more revenue at the same rates. This part is not really under the control of the city, and relies more on the real-estate market and property values, as well as whatever new construction takes place. Your tax dollars still pay off the bonds, but we can probably get away without having to collect more than we collect today.