A North Texas town with about 400 residents is the source of more than $230 million in bonds for the city of Dallas and elsewhere. Windthorst, a small dairy farming community close to Wichita Falls, has issued bonds for several projects, most notably the Dallas Arboretum, Texas Christian University and the Jesuit College Preparatory School of Dallas.
Peter Simek is arts editor at D Magazine, and traveled to Windthorst to learn how the town became a major investor in these projects.
“It’s not much more than an intersection on the highway,” Simek says of the town. “There’s a general store that dates back to the German settlers that arrived there a century ago. And there’s a couple buildings, but it’s a big dairy farming community.”
While farming businesses there struggle financially, the city can still afford routine road repairs and park upgrades because of tax revenue from the bonds.
“Basically, small towns or any towns, any cities, are legally able to issue bonds on behalf of various types of private organizations, nonprofits and the like, as long as they have the approval of the local municipalities,” Simek says.
Simek says the town’s approach to generating revenue is legal, but it’s “one of those odder, more idiosyncratic corners of the municipal finance world.”
"There's a little bit of a cut: depending on the size of the bond, they get anywhere from $10,000 to $30,000," Simek says.
He says the institution benefits from getting a tax break, and the town benefits because it otherwise would struggle to generate tax revenue on its own.
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Written by Chloe Bennett.
