Oregon residents approved over $820 million of general obligation bonds across the State on Election Day, which was historically strong. Although results are preliminary and have yet to be certified, bonds approved during this election far outweigh the $180 million approved during the May special election earlier this year. By election measure, approximately 67% of the issues were approved, with an approval of 88% of the total par amount requested. Oregon typically sees more ballot measures during general elections, which are held in November, of even-numbered years. Accordingly, the current election falls short of the 2018 November general election, which approved a robust $1.39 billion of new supply and set 2019 off to a strong start.
Over 80% of the principal amount approved by the election was for projects in the Portland Metropolitan area. Tax-rate and the overall par amount requested did not seem to weigh into voter decisions as much as demographics and geography. The measures with the highest tax rate and the highest par amount both passed. The majority of the bonds approved were for Metro’s $475 million general obligation bonds to finance regional programs to protect and improve water quality. Metro cited climate resiliency as a top priority during the development of the bond measure. According to Metro, future bond investments are intended to make communities more resilient to the effects of climate change.
Schools were also a significant consideration in this election with five schools requesting approval for almost $400 million in funding. A significant marketing point for all of the school bond issues was the Oregon School Capital Improvement Matching program, a grant program offered by the Oregon Department of Education, which supports communities that approve general obligation bonds for school improvements. Overall, this election is expected to generate over $20 million of grant disbursements from the state for school improvements. The only district that failed to pass its bond measure was Grants Pass School District No. 7. Josephine County has historically been a tough place to pass money measures. This is the third time in six years that district voters have declined to approve funding for school upgrades. Proceeds from the bond would have improved safety for staff and students. This includes doors, door locking and a new emergency alert system. Bond proceeds would have also replaced the district’s North Middle School.
Some of the elections were closer than others. The Lyons-Mehama Water District’s general obligation bond was last reported as passing in Marion County and failing in Linn County with the measure failing overall. If approved, the bond measure would pay for two water storage reservoirs, two new water mains to improve fire flow capacity and fund site improvements. The district’s primary tank used for storing treated water is made of wood and dates back to 1957. Due to the critical nature of the project, the district intends to ask for voter approval again during the next election, and plans to provide more voter education.
Overall, this election will provide a significant source of additional supply to the Oregon bond market, but since this election approved just over half the total par amount approved last November, sourcing bonds may prove more challenging from a supply perspective in 2020.