Bill would change joint public agency bonding powers

The Government, Military and Veterans Affairs Committee heard testimony Jan. 29 on a bill that would change the bonding power of any joint public agency (JPA).

LB132, introduced by Crete Sen. Laura Ebke, would require a JPA to follow the bond issuance procedures required by law for the participating public agency from which the JPA derived taxation powers.

Ebke said the JPA Act—created in 1999 to encourage cooperation among local public agencies—contains a loophole that allows JPAs to issue bonds without public hearings or a public vote.

“LB132 links joint public agency bonding procedures to taxing power,” Ebke said.

Ann Post of the Lincoln Independent Business Association testified in support of the bill, saying JPAs currently have more bonding authority than the entities that create them.

For example, she said, both school districts and cities require a public vote to issue general obligation bonds, but a JPA comprising a school district and a city could issue general obligation bonds without a vote of the public. Post said requiring such a vote would not be too great a burden for JPAs.

“It isn’t a hindrance if you have a good project and a popular project,” she said.

Dick Clark of the Platte Institute also supported the bill, saying Nebraskans generally support a “pay as you go” philosophy when it comes to both personal and public expenditures. JPAs should respect that philosophy, he said.

“If they want to take action that can increase taxes,” Clark said, “[then] taxpayers should have all the transparency and accountability that they deserve.”

Lynn Rex, representing the League of Nebraska Municipalities, testified in opposition to the bill. Only six JPAs have been created since 1999, she said, which indicates that the process is not being abused.

In addition, she said, JPAs are transparent because those who serve on them are subject to open meeting and public record requirements and to voter approval at the ballot box.

“Only elected officials can serve on a JPA,” Rex said, adding that the purpose of JPAs was to incentivize cooperation and efficiency among local-level public entities.

Michael Rogers, representing the city of Lincoln, also opposed the bill. He said LB132 would be difficult to implement because the participating members of a JPA may be subject to different bonding procedures.

“The bond issuance process is complex and varied … with no centralized process for all issuers,” Rogers said.

The committee took no immediate action on the bill.