Agenda - 06-18-2024; 6-c - Proposed Bond Order Authorizing $300 Million in County General Obligation School Bonds, Subject to Voter Approval, and Approve the Details of the Referendum

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2 With this item, the Board is asked to take final action to adopt the Bond Order. The Board is then asked to consider approval of a resolution to set formally the details of the referendum. These are the final actions required of the Board to place the question of the school bonds before the voters in November 2024. One item covered by the resolution approving the referendum details is the approval of the specific question that will be on the ballot for the voters. As has been discussed with the Board, most of the form of the ballot question is set by law, and there is no meaningful leeway to simplify or shorten the question. The resolution also directs staff to complete certain remaining newspaper publications the law requires. The Board must complete its formal authorization process before early August to allow the County Board of Elections adequate time for ballot printing and other organizational matters for the referendum. At this point, the Board can reduce the bond amount, but the Board cannot increase the amount unless the process is re-started. 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, the bonds will provide funds for priority public school projects that would otherwise have to be paid for out of 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 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. ENVIRONMENTAL IMPACT: The following Orange County Environmental Responsibility Goal impact is applicable to this item: • ENERGY EFFICIENCY AND WASTE REDUCTION Initiate policies and programs that: 1) conserve energy; 2) reduce resource consumption; 3) increase the use of recycled and renewable sources; and 4) minimize waste stream impacts on the environment.