Let Lincoln Vote on Debt!
The Lincoln Independent Business Association, with feedback from its Budget Monitoring Committee, sent a letter to the Mayor and Lincoln City Council regarding the issuance of more debt. We reiterated by this letter, our long-held position against the city’s excessive use of COP bonds.
FACT #1 – As of August 31, 2016, the city of Lincoln had $45,370,000 in “voter-approved” bonding debt.
FACT #2 – The bonded debt issued without a vote of the people is over $37 million.
FACT #3 – If you approve this new request of $3.77 million, our total non-voter-approved debt will climb to $41 million.
Our non-voter-approved debt is hovering around the amount that has been approved by voters. The City of Lincoln is using COP bonds to purchase the types of items that normally would require a vote. We have purchased the $6.5 million Experian building and a clubhouse for a golf course.
LIBA believes that COP bond and installment contract debt should be tied to the amount of debt a government body has had approved by the voters. It would be easy to suggest that NON-voter-approved debt should be no more than 20% of the total of “voter-approved” debt. That would set the lid for Lincoln at $9 million. However, it would also allow the lid to increase if voters approved more debt.
Keep in mind, in 2003, Lincoln only had $1.7 million in COP bond debt. Since then, COP bonds have been used so many times we are over $37 million, costing taxpayers $1,129,722 in interest alone in the 2016-2017 fiscal year.
LIBA is aware of the advantages of COP bonds. For example, COP bonds are an important funding mechanism where COP bonds allow for money savings or allow the municipality to overcome time constraints associated with a project. COP bonds can be advantageous in certain circumstances. LIBA simply wants to see COP bonds used responsibly.
The Lincoln Journal Star editorial board has agreed with LIBA on the subject of COP bonds, saying the debt “can’t continue to grow at this rate without causing problems at some point in the future.”
Due to the overwhelming amount of non-voter-approved debt, LIBA asked the City Council to vote NO on the use of COP bonds for street lights. Alternatively, we asked that they place the issue before the voters. Election Commissioner David Shively told LIBA that placing this issue before the voters during the next election would likely cost less than $100,000. He thought the cost could be closer to $75,000.
When Mayor Beutler and the City Council are considering putting the citizens on the hook for another $3.77 million, LIBA believes they should get to vote.
LIBA studies and promotes these types of issues that are important to businesses and our community. If you have an interest in joining LIBA, please call me at (402) 466-3419. LIBA membership is not restricted to just businesses. We also have “individual” memberships for those who want to help influence our local government decisions.
For more information on LIBA, visit Liba.org.