Want to Know More About the 2016 Orange County Bond Referendums and the Impact on You and Our Community?
These Frequently Asked Questions Can Help.
A bond referendum is an election process required by general statutes when a governmental unit (city, county or state) wishes to issue general obligation bonds to finance public purposes. A vote of the people is required because general obligation bonded debt is secured by the governmental unit’s taxing power.
Bonds are a form of long-term borrowing used by most local governments to finance public facilities and infrastructure. This type of debt financing allows the cost of a facility to be repaid over the useful life of the facility or improvement.
Bonds are sometimes necessary in rapidly growing counties, such as Orange County, in order to meet the increasing demands for services. With bonds, the payments are made while the facility is being used; the users of the facility pay the cost. In periods of inflation, this approach enables a county to obtain dollars today that are worth relatively more than future dollars.
The items included in the bond package are beyond the scope of what can be financed by the annual amounts of pay-as-you-go funding. It would take a significant number of years for pay-as-you-go funds to accumulate to the level necessary to address the capital needs identified. On average, annual amounts of capital funding for Chapel Hill Carrboro City Schools are about $4.0 million, while Orange County Schools receives $2.6 million. These pay-as-you-go funds are used to fund other projects included in each district’s Capital Investment Plan (CIP).
This is a term used to describe funds that are appropriated each year to pay for school and county capital projects and equipment identified in the Capital Investment Plan (CIP). Items such as building renovations and repair, heating and HVAC systems, roof replacements and major equipment purchases are funded by pay-as-you-go monies. Major sources of revenue for pay-as-you-go projects are sales taxes, school construction impact fees, State lottery monies and property taxes.
In the 2016 General Election, Orange County voters will consider a referendum that will support school repairs and renovations (for $120 million) and another for affordable housing (for $5 million).
The vote will be conducted per issue, pursuant to requirements for the Local Government Bond Act. Voters will have to cast two separate votes.
About three years ago, at the request of Commissioners, both school boards allocated resources to complete a comprehensive, all-inclusive study of all of their facilities. With the average age of school buildings in both districts at between 50 and 60+ years, the capital needs identified in both studies were in excess of $330 million. The school projects on this bond reflect each district’s highest priority projects from those comprehensive studies.
The Low and Moderate Income Housing Bond will help to meet the housing needs of those who earn below 80 percent of area median income. This would include elderly households with fixed incomes; core community employees such as teachers, nurses, police, firefighters and first responders; persons with disabilities and victims of domestic violence.
Yes, Commissioners have the authority to make changes to the projects that will be funded with referendum bonds as long as those changes conform to the description in the bond orders and are within the authorized dollar amounts. The referendums only authorize bond proceeds to be used for school repairs and affordable housing. Bond proceeds may not be used for any other purpose.
The Board of County Commissioners will administer all bonds. Bond proceeds are "public monies" and must be administered in the same manner as other county funds. County Commissioners are required by North Carolina General Statutes to adopt project budgets authorizing the expenditure of the bond proceeds. Funds cannot be spent on projects not approved by the County Commissioners.
To learn more about the school bond and the affordable housing bond, email questions to firstname.lastname@example.org.
Orange County will borrow the funds as project timelines dictate. Current timelines assume both school districts will need their share of the bond funds within five years of the bond referenda date. The timeline for issuing the Low and Moderate Income Housing Bond falls over three years. As projects proceed, staff will assess the frequency of issuances to best fit cash flow requirements. Statutes require that all funds be issued within seven years of the referenda election.
The actual cost of the bonds is based on the scheduling of bond sales and the interest rate at the time of each sale. Based on assumptions used by county finance staff, it is estimated that the maximum impact on the tax rate would be between 3.7 and 5.8 cents once all $125 million in bonds is sold (estimated to be within five years of the referenda date).
Based on current projections, once all of the bonds are issued, a taxpayer who owns property valued at $200,000 will see a County property tax increase somewhere between $74 and $116 per year or between $6 and $10 per month; while a taxpayer who owns property valued at $300,000 will see a County property tax increase somewhere between $111 and $174 per year or between $9 and $15 per month. The increase could be implemented as a one-time increase at the beginning of the repayment period or could be graduated over time, based on the debt issuance schedule.
Since 1988, Orange County voters have approved four General Obligation referenda, the last one in 2001. Examples of projects completed with monies from the four referenda include: The Seymour Senior Center in Chapel Hill, the Passmore Senior Center in Hillsborough, Homestead Aquatics Center in Chapel Hill, Soccer.Com Complex in Efland, Fairview Park in Hillsborough and Southern Community Park in Chapel Hill, along with other park projects. In addition, voters approved funds to expand the sewer system in Efland and serve those with failing septic systems.
Examples of Chapel Hill Carrboro City Schools projects funded with voter-approved bonds include East Chapel Hill High, McDougle and Smith Middle and Rashkis Elementary schools. For Orange County Schools, examples of projects funded with past bond referenda include Hillsborough, New Hope and Pathways Elementary and A.L. Stanback Middle schools, in addition to many major repair and renovation projects.
Affordable housing projects funded through the assistance of past bond referenda include Dobbins Hill and Club Nova Apartments in Carrboro, developed by the Mental Health Association in North Carolina with support from the Orange County Housing Authority.
The $120 million for schools repair and improvement is primarily designed to address safety and security, renovate and repair the district's oldest schools and construct a sustainable (green) student transportation (bus) garage to be shared by both districts. Bond funds will also provide additional classroom seats to accommodate student growth.
The $5 million for affordable housing will help the County reach its goal of creating up to 1,000 affordable housing units in five years for rental and home ownership.
Of the $120 million School Bond, Chapel Hill Carrboro City Schools (CHCCS) will receive $72.108 million and Orange County Schools will receive $47.892 million. The split in funding is based on how many students each district serves. In addition to safety and security updates and repairs for each district, major projects include:
♦ Chapel Hill High School will be reconstructed, in phases, to address critical maintenance issues including HVAC system updates, ADA updates, insufficient educational spaces, outdated science labs and facility deterioration.
♦ Lincoln Center renovations will allow CHCCS to co-locate most Pre-K classrooms at one central location thereby freeing up currently used classroom space in elementary schools. This will result in increased seating across the district of 189 seats and alleviate the immediate need for a new elementary school. In addition, these renovations will more than double the capacity of the Phoenix Academy High School, the district’s alternative school.
♦ Cedar Ridge High School is near capacity. Bond funds will construct a new classroom wing and increase the school’s capacity by 500 students.
♦ Other schools, including Orange High School, will receive much-needed infrastructure replacements, such as roofs and antiquated and failing mechanical systems, in addition to other necessary safety and security repairs and updates.
Yes, both school districts receive State lottery monies; however, the costs of the projects covered with the proposed bond monies far exceed the amount of lottery monies that each district receives each year. As a point of reference, CHCCS receives about $828,000 each year and Orange County Schools receives about $528,000 each year; those monies are used to pay for smaller projects in each district.
No. The vote on the two bonds is a vote on whether Orange County may specifically use general obligation bond financing for schools and affordable housing projects; it is not a vote on the property tax rate. The Board of Commissioners has the authority to lower or increase the property tax rate each year, depending on the amount of revenues the Board believes is necessary to meet the operational and capital needs of the county government.
Affordable housing is defined for renters as housing which costs no more than 30% of total family monthly income. For home buyers, affordable housing is defined as housing which costs no more than three times the family income.
In Orange County, the current availability of housing units that are affordable for low- and moderate-income families and individuals is significantly less than the need. Many of these individuals are senior citizens on fixed incomes, persons with disabilities and lower wage workers.
The bond funds will help stretch housing funds available to the County and towns by leveraging and matching funds received from the U.S. Department of Housing and Urban Development, the N.C. Housing Finance Agency and the N.C. Department of Commerce.
If the Low and Moderate Income Housing Bond passes, the goal is to assist in the creation of 1,000 affordable homes to assist low-income individuals and households; special needs populations, including residents with disabilities, older adults/seniors, residents experiencing or at risk of homelessness and victims of domestic violence; and households in the 50 percent to 80 percent of median income bracket.
It is expected that some of the affordable homes created or preserved will be targeted to households in the 50 percent to 80 percent of median income bracket. Professions that fall into this income range include teachers, law enforcement, firefighters and public workers.
The deadline to register to vote in the November 2016 election is Friday, October 14. The form must be received in person by the Board of Elections by 5:00 p.m., or postmarked on that date.
The bonds will be the last items on the 2016 General Election ballot. In order to vote on these bond items, you will need to flip over your ballot.
Wording on the ballot for the Orange County school bonds referendum is: Shall the order authorizing Orange County general obligation bonds in the maximum amount of $120,000,000 plus interest to pay capital costs of providing school facilities and paying related costs, and providing that additional taxes may be levied in an amount sufficient to pay the principal of and interest on the bonds, as adopted by the County’s Board of Commissioners on May 5, 2016, be approved?
Wording on the ballot for the Orange County Low and Moderate Income Housing bonds referendum is: Shall the order authorizing Orange County general obligation bonds in the maximum amount of $5,000,000 plus interest to pay capital costs of providing housing for persons of low and moderate income and paying related costs, and providing that additional taxes may be levied in an amount sufficient to pay the principal of and interest on the bonds, as adopted by the County’s Board of Commissioners on May 5, 2016, be approved?
Early voting runs Thursday, October 20 through Saturday, November 5. For early voting hours, visit : http://bit.ly/2bmcPPd.
Election Day is November 8; polls are open 6:30 a.m. to 7:30 p.m.
Early Voting Sites
♦ Carrboro Town Hall, 301 W. Main Street, Carrboro
♦ Chapel of the Cross Church, 304 E. Franklin Street, Chapel Hill
♦ Efland Ruritan Club Building, 3009 US Highway 70 West, Efland
♦ Orange County Board of Elections, 208 S. Cameron Street, Hillsborough
♦ Seymour Senior Center, 2551 Homestead Road, Chapel Hill
Orange County offers absentee voting by mail to all Orange County registered voters who wish to vote by mail rather than in person at a one-stop early voting site or on Election Day. All by-mail absentee ballot requests must be submitted on the State Absentee Ballot Request form and must have an actual signature. Ballots are available 50 days prior to the election. The deadline to request an absentee ballot is Tuesday, November 1.
The deadline to return the ballot by mail or in person to the Orange County Board of Elections is 5:00 p.m. on Election Day, November 8.
An extension is provided for ballots postmarked on Election Day.