High School Facilities Improvements
2014
OUSD High Schools are Aging
BUILT 1964
50 YEARS OLD
BUILT 1966
48 YEARS OLDBUILT 1973
41 YEARS OLD
BUILT 1953
61 YEARS OLD
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 haveoutlived useful lives
Impact of Facilities Decay• Student academic growth inhibited• Staff retention adversely impacted• Community resource underutilized• Property values negatively impacted
Previous Bond Measures
March 2004 ($200 million) 48.9% yes voteNov 2004 ($196 million) 54.6% yes vote
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
Santa Ana Unified
Placentia-Yorba Linda Unified
Tustin Unified SFID 2002-1
Los Alamitos Unified SFID #1
Saddleback Valley Unified
Garden Grove Unified
Tustin Unified SFID 2008-1
Brea Olinda Unified
Tustin Unified 21012
Newport Mesa Unified
Laguna Beach Unified
Capistrano Unified SFID #1
Orange Unified
$77.49
$62.03
$42.92
$41.84
$32.65
$31.35
$24.37
$23.65
$19.00
$18.90
$16.94
$11.71
$0.00
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
Prop 39 Bonds
• Prop 39 passed November 2000• Allows school construction bonds with voter
approval of 55%
Prop 39 Election
• Regularly scheduled election• Detailed Project List• Maximum $60 per $100,000 assessed
valueAssessed Value Max Annual Tax Monthly
$300,000 $180 $15
600,000 360 30
1,000,000 600 50
How much will property value increaseas a result of improved schools?
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
Prop 39 BOC
• Purpose– Inform the public concerning bond
expenditures• Responsibilities
– Review and Report onproper expenditures
– Advise public ondistrict compliancewith requirements
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
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
Annualized Growth Rates: Lowest Rolling Averages:1-year: 0.06 % 3-year: -0.72 %5-year: 0.46 5-year: 0.4610-year: 4.04 10-year: 4.0015-year: 4.98 15-year: 4.9820-year: 4.02 20-year: 4.0225-year: 5.00 25-year: 5.00
Growth Statistics
-
5
10
15
20
25
30
35
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
($ B
illio
ns)
Fiscal Year
District Total AV
Orange Unified School District AV• District AV growing again after recent real estate decline
(1) Source: California Municipal Statistics, Inc.; Data from 1984 to 2013.
FY Total AV (1)
1984 5,640,618,851$ 1985 6,176,521,702 9.50 %1986 6,866,518,365 11.171987 7,534,006,985 9.721988 8,253,491,161 9.551989 8,953,272,550 8.481990 9,922,681,718 10.831991 11,056,134,508 11.421992 11,969,843,413 8.261993 12,701,618,844 6.111994 12,961,782,205 2.051995 12,816,309,020 -1.121996 12,901,876,825 0.671997 13,129,638,107 1.771998 13,479,650,827 2.671999 14,152,629,727 4.992000 15,409,525,117 8.882001 16,597,662,928 7.712002 17,723,489,960 6.782003 18,793,818,430 6.042004 19,985,449,794 6.342005 21,420,374,760 7.182006 23,308,734,152 8.822007 25,378,248,083 8.882008 27,309,125,732 7.612009 28,536,462,843 4.492010 28,023,466,959 -1.802011 27,636,013,478 -1.382012 27,923,280,855 1.042013 27,939,202,793 0.06
Annual% Change
Issue Issue Date ProceedsSeries A September 2014 124,000,000$ Series B September 2016 124,000,000 Series C September 2018 124,000,000
Total 372,000,000$
Prospective Issuance Schedule (1)
$-
$15
$30
$45
$60
$75
$90
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
Tax
Rate
(Per
$10
0,00
0 of
AV)
Fiscal Year
Projected Tax Rates
Series A Series B Series C
Bond Illustration• Authorize a new tax in the amount of $60 per $100,000 of AV utilizing 25-year
financings
(1) Issuance schedule for illustrative purposes only. Actual amounts and dates will be tailored to the District’s facility needs.
Term Proceeds25 Years $372,000,00030 Years $402,000,000
Financing Term Sensitivity
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)
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