Voter approval sought for some first-class city refinancing

Lawmakers advanced a bill from general file Feb. 3 that would change voter approval requirements for a first-class city to borrow money for parks and recreation public improvements.

North Platte Sen. Mike Groene, sponsor of LB378, said the bill would protect taxpayers in first class cities.

“Presently under statute, the mayor and city council have the power to borrow money and pledge as security the property and credit of the city in order to buy and improve land for parks, recreational facilities and public grounds,” Groene said, as long as authority first is obtained from voters by placing the proposal on the general election ballot.

Groene said a problem arose approximately 20 years ago in North Platte when the city council obtained authority for a revenue bond to build a golf course, but renegotiated that debt to a general bond obligation without another public vote. The result, he said, was a $15 million obligation for the city’s taxpayers.

“The revenue didn’t come in and three years later—with one meeting of the city council—revenue bonds were renegotiated to general obligation bonds,” Groene said.

As introduced, LB378 would have added the specific type of financing being sought to the initial bond ballot language and would have mandated that any proposed refinance from one type of bond to another be subject to a vote of the people.

An Urban Affairs Committee amendment, adopted 29-0, narrowed the bill to require only that a refinance proposal to change the type of security from revenue bonds to general obligation bonds be placed on the ballot.

Bellevue Sen. Sue Crawford, chairperson of the committee, said only that type of refinance potentially would increase the tax burden on residents. She said the amendment would protect cities from the expense associated with a ballot measure if it were unnecessary.

“This would only require a new vote when taxpayers would be placed at further risk as a result of the refinancing,” Crawford said.

LB378 advanced to select file on a 31-0 vote.