How does municipal bond funding work?

Municipal bonds are debt securities issued by state and local governments, or their authorized agencies, to borrow or raise money for public purposes such as roadways, facilities, water/sewer infrastructure.

In a General Obligation (GO) bond, individuals, insurance companies, pension plans, and other investors purchase the bonds providing the City money to pay for capital projects. The City’s bond debt is repaid through the property tax (also referred to as “ad valorem” tax) paid by owners of taxable property in Allen.

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1. What is a bond election?
2. How does municipal bond funding work?
3. How are projects selected for bond funding?
4. Will this bond election raise the City tax rate?
5. Why does the City use bond debt to fund projects?
6. How long will it take to repay bond debt money?
7. How much will the interest be for bond debt on proposed projects?
8. Does the City have to use bond debt to build new improvements?
9. How is the tax rate affected if voters do not approve bond funding?
10. What are some examples of existing community projects/enhancements that were funded by bonds?
11. Does the City fund school facilities like the football stadium?
12. How were bond projects selected?