McAllen ISD advisers: pending state bills could force fast choice on defeasance and a possible $290 million bond election

McAllen, Texas — Financial advisers and district staff told the McAllen Independent School District Board of Trustees on April 29 that new proposals in the Texas Legislature could force the district to choose quickly whether to pursue a defeasance and a voter-approved bond election that advisers estimate could provide roughly $290 million without increasing the district's interest-and-sinking (I&S) tax rate.

Miguel de los Santos, a financial adviser with Estrada y Nohosa, told trustees that if the board authorizes a defeasance and the related legislation (he discussed House Bill 2 and House Bill 19 as the legislative assumptions) remains intact, “you could access approximately $290,000,000 with no increase in the I&S tax rate.” De los Santos advised the board that the window for a November 2025 election is time-sensitive if the legislature enacts limits now under HB19.

The proposals discussed would change how districts calculate borrowing capacity and the timing of financing elections. De los Santos said one HB19 provision under consideration would cap the amount of property-tax collections a district can use for new debt by averaging the last three years of local property-tax collections and taking 20 percent of that average; using McAllen ISD’s current three-year average collections of about $91,900,000, that 20 percent figure would be…