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FINANCE NAVIGATION
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CEO Finance and Budget
Debt Program
Debt Financing
The Orange County Public Finance Division is a part of the County Executive Office. The Division is primarily responsible for managing the County's public debt programs. Public debt programs are designed to access funds for the construction and acquisition of public facilities (airports, courts, schools, etc.) and infrastructure needs (roads, bridges, storm drains, etc.), and the implementation of programs targeted for the well-being of the community (housing programs for low-income residents, etc.).

In some ways, public debt is similar to personal (individual) debt. Individuals borrow money from banks to meet personal needs such as cars and homes, public entities (cities, counties and other municipalities) borrow money from investors to meet public needs such as roads, airports, and schools. In both instances, money is borrowed for an ongoing long-term need that costs more than the available or expendable current cash flow and is paid back in manageable increments over an extended period of time. In both instances credit worthiness (including track record in paying back prior loans and available cash to make the required payments for the proposed loan) influence the ability to borrow money, interest rate charges and the need for insurance coverage.

Orange County's primary public debt programs may be grouped into five major categories: (1) lease or installment sale financings, (2) public enterprise revenue bond financings, (3) single and multifamily housing revenue bond financings, (4) community facilities and assessment district bond financings, and (5) tax allocation (increment) bond financings.
 
Lease or Installment Sale Financings
Lease or Installment Sale Financings are designed to generate funds for the construction, improvement, acquisition or lease of public facilities or capital equipment or projects. Funds for this type of financing are generated through the delivery of Certificates of Participation (COPs) or lease revenue bonds by governing bodies. Payment to investors of these obligations is typically payable from the general fund of the governing body.
 
Public Enterprise Revenue Bond Financings
Public Enterprise Revenue Bond Financings are designed to provide funds for a wide variety of projects and programs (solid waste disposals, airports, etc.) within an enterprise fund. Enterprise funds often include airport and waste management facilities. Funds for this type of financing are generated through the issuance of bonds. Payment to investors of public enterprise revenue bonds is made through funds produced by the enterprise (service fees, admission fees, tolls, etc.). The obligation to pay debt service on enterprise bonds is limited to a pledge of revenues from the enterprise.
 
Single and Multifamily Housing Revenue Bond Financings
Single and Multifamily Housing Revenue Bond Financings generate funds for the provision of mortgages for qualified low-to moderate-income residents (single family) or to develop apartment complexes which support the housing needs of low income residents (multifamily). Revenues for single and multifamily housing programs are generated through the issuance of bonds. Payment to investors of housing revenue bonds is made through proceeds generated by rental and mortgage payments. Single and multifamily housing revenue bonds are not the debt or obligation of the issuing entity. Debt service payments are guaranteed through letter of credit or bond insurance.
 
Community Facilities District (CFD) and Assessment District (AD) Bond Financings
Community Facilities District (CFD) and Assessment District (AD) Bond Financings are designed to fund required infrastructure (e.g., roads, storm drains, fire stations, libraries, schools) to support current and future residential and commercial growth within land-based taxing regions called CFDs or ADs. Funds for CFD needs are generated through the issuance of bonds by each CFD. Funds for AD needs are issued as limited obligations of the governmental entity. Payment to investors of CFD and AD bonds is made through special taxes (CFD) or special assessments (AD) levied on real property within the districts. The burden of the special taxes/assessments falls on the property owners within the districts. Debt service secured by assessment or special tax liens on the property in the districts. Failure to pay assessments or special taxes can result in judicial foreclosure.
 
Tax Allocation (Increment) Bond Financings
Tax Allocation (Increment) Bond Financings are designed to provide funds to promote economic growth (e.g., housing rehabilitation or public facility improvements) within blighted or economically depressed regions called Redevelopment Areas. Redevelopment Areas (RAs) are created by authorized government bodies such as cities or counties. For example, the County has formed the Orange County Development Agency as its Redevelopment Agency. Funds to promote economic growth within RAs are generated through the issuance of bonds. Payment to investors of tax allocation (increment) bonds is made through funds generated from property tax growth within the RAs. The obligation to pay debt service for tax allocation bond financings rests on the RA and is not a debt or obligation of the County, City or other entity which formed the RA.
 
DISCLAIMER
Notice: This page presents selected financial and other information concerning the County of Orange. The information does not represent, nor is it intended to represent, complete financial data or all of the information a visitor or investor may desire. All information presented herein is dated as of its date and the County of Orange makes no representation that such information is current or complete.
 
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