This document discusses the need for facility improvements at Orange Unified School District's aging high schools. The average high school in the district is over 50 years old and in need of $199 million in repairs. A facilities bond would provide funding to repair 12 buildings needing major work and replace 92 temporary buildings. Improved facilities could boost student achievement and retain staff, while benefiting the community. Previous bond measures failed to pass in 2004. A new facilities bond under Proposition 39 could fund repairs over 25 years with a tax of $60 per $100,000 of assessed property value.

1. High School Facilities
Improvements
2014

2. OUSD High Schools are Aging
BUILT 1973
BUILT 1966
41 YEARS OLD
48 YEARS OLD
BUILT 1953
61 YEARS OLD
BUILT 1964
50 YEARS OLD

3. Repairs to High Schools Critical
• Parsons estimates $199 million in repairs
– Projected to need $260 million in ten years
• 12 buildings need major repair or
demolition
– Will be 36 buildings in ten years
• 92 “temporary”
buildings have
outlived useful lives

4. Impact of Facilities Decay
•
•
•
•
Student academic growth inhibited
Staff retention adversely impacted
Community resource underutilized
Property values negatively impacted

5. Previous Bond Measures
March 2004 ($200 million) 48.9% yes vote
Nov 2004 ($196 million) 54.6% yes vote

6. Unique Opportunity to Act…Now
• Energy from site master planning activities
• Visibility from improvements in
surrounding school districts
• Low interest rates
• Unique skill set of current leadership

7. Competition
• Other Orange County communities currently levy taxes
related to general obligation bonds as an investment in
their schools
Select Orange County Unified School Districts 2012-2013 Tax Rates
$77.49
Santa Ana Unified
$62.03
Placentia-Yorba Linda Unified
$42.92
Tustin Unified SFID 2002-1
$41.84
Los Alamitos Unified SFID #1
$32.65
Saddleback Valley Unified
$31.35
Garden Grove Unified
Tustin Unified SFID 2008-1
$24.37
Brea Olinda Unified
$23.65
$19.00
Tustin Unified 21012
$18.90
Newport Mesa Unified
$16.94
Laguna Beach Unified
$11.71
Capistrano Unified SFID #1
Orange Unified
$0.00

8. Prop 39 Bonds
• Prop 39 passed November 2000
• Allows school construction bonds with voter
approval of 55%

9. Prop 39 Election
• Regularly scheduled election
• Detailed Project List
• Maximum $60 per $100,000 assessed
value
Assessed Value
Max Annual Tax
Monthly
$300,000
$180
$15
600,000
360
30
1,000,000
600
50
How much will property value increase
as a result of improved schools?

10. Prop 39 BOC
• Prop 39 requires Bond Oversight Committee
• At least seven members
–
–
–
–
“active in business organization”
“active in a senior citizens’ organization”
“active in a bona fide taxpayers’ organization”
parent or guardian of an
enrolled child
– no district employees, vendors,
contractors or consultants

11. Prop 39 BOC
• Purpose
– Inform the public concerning bond
expenditures
• Responsibilities
– Review and Report on
proper expenditures
– Advise public on
district compliance
with requirements

12. Bond Basics
• General obligation bonds are structured based on projections of:
– District project needs
• Project cash flow vs. timing and amount of bond sales
– Authorization amount
• Principal amount of bonds approved by District voters
• Usually split up into several issuances based on project needs
– District assessed value (“AV”)
• Projected AV growth has a significant effect on the bond issuance schedule
and amounts
– Tax rates
• Tax rate ≈ debt service ÷ AV
• Based on AV, bond issuance schedule and issuance amounts
– Municipal bond interest rates
• Function of:
– National and international financial market factors
– District credit ratings
– Bond structure, e.g. bond type, financing term, tax status and redemption feature

13. Types of General Obligation Bonds
• General obligation bonds are generally issued as
either current interest bonds or capital
appreciation bonds
– Current interest bonds (“CIBs”)
• Interest paid semiannually
• Principal paid at maturity
– Capital appreciation bonds (“CABs”)
• Interest paid at maturity
• Principal paid at maturity

14. Orange Unified School District AV
• District AV growing again after recent real estate decline
(1)
District Total AV
35
30
25
20
15
10
5
-
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
AV ($ Billions)
Annual
Total AV (1)
FY
% Change
1984 $ 5,640,618,851
1985
6,176,521,702
9.50 %
1986
6,866,518,365 11.17
1987
7,534,006,985
9.72
1988
8,253,491,161
9.55
1989
8,953,272,550
8.48
1990
9,922,681,718 10.83
1991
11,056,134,508 11.42
1992
11,969,843,413
8.26
1993
12,701,618,844
6.11
1994
12,961,782,205
2.05
1995
12,816,309,020
-1.12
1996
12,901,876,825
0.67
1997
13,129,638,107
1.77
1998
13,479,650,827
2.67
1999
14,152,629,727
4.99
2000
15,409,525,117
8.88
2001
16,597,662,928
7.71
2002
17,723,489,960
6.78
2003
18,793,818,430
6.04
2004
19,985,449,794
6.34
2005
21,420,374,760
7.18
2006
23,308,734,152
8.82
2007
25,378,248,083
8.88
2008
27,309,125,732
7.61
2009
28,536,462,843
4.49
2010
28,023,466,959
-1.80
2011
27,636,013,478
-1.38
2012
27,923,280,855
1.04
2013
27,939,202,793
0.06
Fiscal Year
Growth Statistics
Annualized Growth Rates:
Lowest Rolling Averages:
1-year:
3-year:
0.06 %
-0.72 %
5-year:
5-year:
0.46
0.46
10-year:
10-year:
4.04
4.00
15-year:
15-year:
4.98
4.98
20-year:
20-year:
4.02
4.02
25-year:
25-year:
5.00
5.00
Source: California Municipal Statistics, Inc.; Data from 1984 to 2013.

15. Bond Illustration
• Authorize a new tax in the amount of $60 per $100,000 of AV
utilizing 25-year financings
Projected Tax Rates
25 Years
30 Years
(1)
$372,000,000
$402,000,000
$60
$45
$30
$15
Fiscal Year
Series A
Series B
Issuance schedule for illustrative purposes only. Actual amounts and dates will be tailored to the District’s facility needs.
Series C
2044
2042
2040
2038
2036
2034
2032
2030
2028
2026
2024
2022
2020
$-
2018
Financing Term Sensitivity
Term
Proceeds
$75
2016
Issue Date
Proceeds
September 2014 $ 124,000,000
September 2016
124,000,000
September 2018
124,000,000
$ 372,000,000
$90
2014
Issue
Series A
Series B
Series C
Total
Tax Rate (Per $100,000 of AV)
Prospective Issuance Schedule (1)

16. High Schools First
•
•
•
•
Reasonable project management scope
Ultimately impact all OUSD students
High visibility within communities
Quality high schools have significant
requirements (science rooms, performing
arts buildings, athletic facilities, etc)