Want to know more about the 2016 Orange County Bond Referendums and the impact on you and your community?
Here are some Frequently Asked Questions that can help!
Content provided by http://www.ocbond.org/faq
Low and Moderate Income Housing Bond
WHAT IS AFFORDABLE HOUSING?
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.
WHAT IS THE CURRENT NEED FOR AFFORDABLE HOUSING IN ORANGE COUNTY?
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.
WILL ANY OF THE LOW AND MODERATE INCOME HOUSING BOND MONEY BE USED TO HELP OUR LOCAL TEACHERS, POLICE OR EMERGENCY RESPONDERS?
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.
About Bonds and Bond Referendums
WHAT IS A BOND REFERENDUM?
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.
HOW DO BONDS WORK?
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.
WHY FUND PROJECTS WITH BONDS?
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.
WHY FINANCE THE PROJECT THROUGH A BOND REFERENDUM INSTEAD OF PAYING FOR PROJECTS AS THEY ARE TAKING PLACE (I.E., “PAY-AS-YOU-GO”)?
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).
WHAT IS MEANT BY PAY-AS-YOU-GO?
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.
WHAT IS THE PROPOSED 2016 BOND REFERENDUM?
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).
HOW WILL PEOPLE VOTE FOR THE BONDS–ONE ISSUE AT A TIME OR THE WHOLE VOTE? CAN ONE SECTION PASS AND THE OTHER FAIL?
The vote will be conducted per issue, pursuant to requirements for the Local Government Bond Act. Voters will have to cast two separate votes.
HOW ARE THE SPECIFIC PROJECTS SELECTED?
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.
IS IT POSSIBLE THAT THE PROJECTS IDENTIFIED FOR THE REFERENDUM MIGHT CHANGE?
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.
WHO WILL ADMINISTER THE BONDS?
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.
HOW DO I ASK SPECIFIC QUESTIONS ABOUT THE BONDS?
To learn more about the school bond and the affordable housing bond, email questions to email@example.com.
WHEN WILL THE BONDS BE ISSUED?
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.
WILL A TAX INCREASE BE NEEDED TO REPAY THE BONDS?
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).
WHAT IS THIS GOING TO COST TAXPAYERS?
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.
HAVE VOTERS APPROVED GENERAL OBLIGATION BONDS IN THE PAST, AND IF SO, WHAT PROJECTS HAVE BEEN FUNDED WITH THOSE MONIES?
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.
IN A NUTSHELL, WHAT WILL THE FUNDING FROM THE TWO BONDS PROVIDE OUR COMMUNITY?
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.