Bill to expand cities’ borrowing ability advances

A bill that would allow cities and villages to borrow money after a calamity advanced from general file Feb. 26.

LB870, introduced by Bellevue Sen. Sue Crawford, would allow cities and villages to borrow directly from a financial institution to repair or rebuild property or restore public services damaged or disrupted by a natural disaster.

“This is a commonsense expansion of authority for municipalities,” Crawford said.

Sen. Robert Clements of Elmwood spoke in support of the bill. He said during last spring’s flooding, Peru’s water supply became contaminated, forcing the town to have clean water shipped in.

“The local banker wanted to finance that for them but found out that the statute we passed in 2015 only allowed for real property or personal property equipment to be financed, not a public service like a water supply,” Clements said.

Sen. Curt Friesen of Henderson also supported LB870, saying direct borrowing would be faster in an emergency situation and could be less expensive than bond financing.

As introduced, LB870 would have waived borrowing limits if funds were used to recover from a disaster. An Urban Affairs Committee amendment, adopted 34-0, removed that provision and would limit direct borrowing to 20 percent of the annual budget of a second class city or village or 10 percent for a first, primary or metropolitan class city.

Lawmakers advanced LB870 to select file on a 41-0 vote.