Agenda 05-07-24; 6-a - Introduction of Bond Order Authorizing $300 Million General Obligation School Bonds, Subject to Voter Approval (First Reading), and Scheduling of a Related Public Hearing

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2 If the Board proceeds to introduce the Bond Order tonight, the Board will be asked to take additional action at subsequent meetings, currently scheduled as follows: Hold public hearing June 4, 2024 Take final action on bond order on June 18, 2024 second reading In any event, the Board must complete its formal authorization process before the summer break to allow the County Board of Elections adequate time for ballot printing and other organizational matters for a November 2024 referendum. Along with the introduction of the Bond Order, the Board is asked to consider the attached resolution calling for the required public hearing on June 4, 2024 and directing staff to take related action. At this point, the Board can reduce the bond amount, but the Board cannot increase the amount unless the County re-starts the process. Both the Orange County Schools and Chapel Hill — Carrboro City School Boards of Education have adopted resolutions in support of the bond referendum process. SECURITY FOR BOND REPAYMENT: A general obligation bond, as proposed, is not secured by any physical collateral. Instead, the County promises to levy property taxes in whatever amount is necessary to provide for repaying the bonds, including the interest on the money borrowed through the bonds. FINANCIAL IMPACT: If the voters approve in the proposed November 2024 referendum, the bonds will provide funds for priority public school projects that would otherwise have to be paid from recurring revenues or borrowed through more expensive and less flexible means. County staff has worked closely with the County's financial advisers to estimate the effect on the County's tax rate that repaying the bonds is likely to have. The estimates are based on a variety of assumptions, including assumptions about when the bonds would be issued, the interest rates that the bonds will carry, the repayment period, and growth in the County's tax base over time. The estimated tax impact is likely to be different from the actual impact. Based on the County's assumptions, repaying the bonds and related interest is estimated to have a tax rate equivalent impact of 3.41 cents per $100 of valuation, with all that increase scheduled for the County's 2025-26 Fiscal Year. The County will work to minimize the tax rate impact, in a manner consistent with moving ahead with the projects and addressing other County needs. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item: • GOAL: ENABLE FULL CIVIC PARTICIPATION Ensure that Orange County residents are able to engage government through voting and volunteering by eliminating disparities in participation and barriers to participation.