LIBA Voices Support for LB 992

The Board of Directors of the Lincoln Independent Business Association (LIBA; liba.org) recently announced its support of LB 992, which places limits on the amount of debt Nebraska municipalities can acquire through the use of installment contracts and accompanying certificates of participation (COP) bonds. The bill, introduced by State Senator Laura Ebke, would establish a maximum amount of debt for such contracts and bonds at $25 million, and would require any political subdivisions with outstanding debt above that threshold to pay it down before using the mechanism for additional purchases.

“Each time the City reaches into its pocket to place an additional purchase on what amounts to little more than an easy-to-use credit card, the taxpayers get stuck paying the bill with interest without being given the opportunity to weigh in,” said Coby Mach, President and CEO of LIBA.

In 2001, the City’s total debt from COP bonds was $1.4 million. Today, that debt has grown to more than $41.6 million. Over the years, the City has racked up this debt with various small projects, and some larger purchases – the largest of which has been the City’s decision to purchase and renovate the Experian Building, totaling more than $15 million in principal bond obligations to date.

In addition to the purchase of the Experian Building, the City of Lincoln has used installment contracts and coordinating COP bonds to complete both public improvement and city beautification projects. Notably, the City has used $2.5 million to install art and landscaping along the entry corridor from the airport into downtown, has used more than $4 million to repair and construct sidewalks, has used $1.5 million to construct a new clubhouse at Holmes Lake Golf Course, and has used more than $14 million on streetlights. Each of these COP bonds has a different fixed rate, ranging from 1.6% to about 3.7%, and each has different terms of repayment, ranging from 13 to 22 years.

For more information on LIBA, visit (liba.org).