The sale of bonds begins with an election to authorize a specific amount – the maximum the District is allowed to sell. The school District sells tax exempt municipal bonds to raise money for capital projects such as new schools. Bids are taken from interested buyers, usually large institutional investors – and are sold at the lowest interest rate offered. The rate is based on the District’s bond rating – the higher the bond rating, the lower the interest rate to sell the bonds. Principal and interest on the bonds are repaid over an extended period of time with funds from the debt service tax rate.