BOULDER CITY BALLOT QUESTION NUM.

2
City of Boulder City

Shall the Boulder City Code be amended to provide that Boulder City and its agencies and
enterprises may incur refunding debt obligations to refinance existing debt obligations without
the approval of the electors of Boulder City for the purpose of reducing interest costs or effecting
other economies or modifying or eliminating restrictive contractual limitations concerning the
existing debt obligations, as determined by the City Council?

Yes . . . . . . . . . . [ ]
No . . . . . . . . . . [ ]
EXPLANATION
THE BOULDER CITY LIMITATION ON DEBT OBLIGATION ORDINANCE which was
initiated by petition on November 9, 2010, provides in Section 2-7-2 of the Boulder City Code as
follows:
LIMITATION ON CITY DEBT OBLIGATION:
The city and its agencies and enterprises shall not incur any new debt obligations of one million
dollars ($1,000,000.00) or more, as defined under Nevada Revised Statutes 350.0045 to Nevada
Revised Statutes 350.0075 inclusive, without the approval of the electors of Boulder City in a
general or special election. (Ord. 1423, 11-9-2010, eff. 11-9-2010).
Because of the limitations contained within Section 2-7-2 of the Boulder City Code, the City’s
bond counsel is unable to render a validity opinion in connection with refunding obligations of
one million dollars ($1,000,000.00) or more incurred by the city and its agencies and enterprises
to refinance existing debt obligations without the approval of the electors of Boulder City.
The City Council of Boulder City is requesting, through this Ballot Question, approval from the
electors of Boulder City of an amendment to the Boulder City Code to provide that Boulder City
and its agencies and enterprises may incur refunding debt obligations to refinance existing debt
obligations without the approval of the electors of Boulder City for the purpose of reducing
interest costs or effecting other economies or modifying or eliminating restrictive contractual
limitations concerning the existing debt obligations, as determined by the City Council.
Approval from the electors of Boulder City of the issuance of refunding debt obligations is
limited to a general or special election which limits the ability of the city and its agencies and
enterprises to react to favorable market conditions in real time.
DIGEST
This Ballot Question does not create, generate, increase or decrease any public revenue in any
form.
A. Summary of Existing Laws related to the Ballot Question.
Section 2-7-2 of the Boulder City Code prohibits the incurrence by the city and its agencies and
enterprises of new debt obligations of one million dollars ($1,000,000.00) or more as defined in
NRS 350.0045 to 350.0075, inclusive, without voter approval. The type of obligations defined
within NRS 350.0045 to NRS 350.0075, inclusive, include general obligation debt, installment-
purchase agreements, medium-term obligations and special obligations.
B. Summary of Impact of the Ballot Question:
1. Addition to Boulder City Code – If the Ballot Question is approved, the following section
would be added to the Boulder City Code by ordinance:
Section 2-7-3 LIMITATION ON CITY DEBT OBLIGATIONS NOT APPLICABLE
TO REFUNDINGS:
The limitation contained within Section 2-7-2 herein shall not be applicable to refunding debt
obligations issued by the city and its agencies and enterprises to refinance existing debt
obligations, and the city and its agencies and enterprises may incur such refunding debt
obligations without the approval of the electors of Boulder City for the purpose of reducing
interest costs or effecting other economies or modifying or eliminating restrictive contractual
limitations concerning the existing debt obligations, as determined by the City Council
2. Changes Existing Laws – This Ballot Question will not change existing laws.
3. Repeals Existing Laws – This Ballot Question will not repeal any existing laws.
A “YES” vote would authorize Boulder City and its agencies and enterprises to incur refunding
debt obligations to refinance existing debt obligations without the approval of the electors of
Boulder City for the purpose of reducing interest costs or effecting other economies or modifying
or eliminating restrictive contractual limitations concerning the existing debt obligations, as
determined by the City Council.
A “NO” vote would prohibit Boulder City and its agencies and enterprises to incur refunding
debt obligations to refinance existing debt obligations without the approval of the electors of
Boulder City for the purpose of reducing interest costs or effecting other economies or modifying
or eliminating restrictive contractual limitations concerning the existing debt obligations, as
determined by the City Council.

ARGUMENT FOR PASSAGE

In 2010, the voters of Boulder City passed a ballot question which required the City Council to
get voter approval to acquire new debts over one million dollars ($1,000,000.00). The problem
with that is the City Council must also get voter approval to refinance existing City debt.
Refinancing is fiscally responsible and would allow the City to find a better deal on interest rates
(and possibly other terms) for money that was already borrowed. Interest rates change quickly,
so if voter approval is required to refinance, the City Council may lose the opportunity to save
the City money on interest. A ‘yes’ vote on Question No. 2 will allow the City Council to find
better alternatives to reduce existing debts.
The 2010 ballot question limited the City Council’s ability to take on new debts over one million
dollars ($1,000,000.00) without voter approval. Approval of Question No. 2 does not change
this. The ballot question does not allow for the City to borrow an amount above one million
dollars ($1,000,000.00) without voter approval.
The City could save a lot of money by refinancing existing debt. For example, Boulder City’s
debt (as of December 2017) was $26.1 million. The City’s financial advisor estimated
refinancing would save the City $2.5 million out of the $9.8 million in interest that would be
paid during the life of the loan. The money saved could be used more productively here in
Boulder City.
To sum it up, a ‘yes’ vote on Question No. 2 will clarify existing law, which will allow the City
to save money. A ‘yes’ vote will not take away the power that voters currently have to limit new
spending and debt incurred by the City. It makes sense to approve Question 2.
(Submitted by the Ballot Question Committee as provided for in NRS 295.217)

REBUTTAL TO ARGUMENT FOR PASSAGE

The City could possibly refinance its debt without voter approval. The City’s current bond
attorneys will not render a validity opinion in connection with the refunding of current debt
obligations without voter approval to amend the current Code. The City has the option to seek a
validity opinion from a different bond counsel.

The Code which limits the City’s ability to incur debt of one million dollars ($1,000,000.00)
without voter approval was implemented by initiative petition. Any changes or modifications to
this portion of the Code should be implemented in the same manner.

(Submitted by the Ballot Question Committee as provided for in NRS 295.217)

ARGUMENT AGAINST PASSAGE

Vote NO on ballot question 2!

This ballot question is based on the opinion of the City’s bond attorneys who state they are
unable to render a validity opinion in order for the City to refinance existing bonds. It asks voters
to change City Code to allow refinancing of debt obligations when the City Council determines it
is advantageous to do so.
Approval of the question will ADD a new Section 2-7-3 to the Boulder City Code which states
the citizens’ initiative code 2-7-2 will NOT apply to bond refinancing. Section 2-7-2 was added
to the Boulder City Code by a voter initiative in November 2010. That code limits the city taking
on NEW debt of more than one million dollars ($1,000,000.00) without a citizen vote. (Ord.1423
11-9-2010).
The City’s bond attorney’s opinion is that the current code won’t allow refinancing of the city
bonds so they want citizens to add a section to eliminate the voter approval for refinancing debt.
What are the “economies” it is referring to? Will the cost to refinance be more than the
“economies” realized? What are considered “restrictive” limitations?
In August of 2011, the following was added AFTER 2-7-2 and this not only gives the City
Council authority to refinance but says the City Council should look for opportunities to
refinance. Title I, Chapter 9, Item E states “The City Council shall review at least annually all
outstanding debt obligations of the City to evaluate possible savings to be attained from
refunding existing debt. However, it shall be policy that opportunities for refunding the City’s
debt obligations should be pursued any time it is financially advantageous to do so, (Ord. 1445,
8-9-2011)
If the bond counsel is unable to render a validity opinion in connection with refunding
obligations of one million dollars ($1,000,000.00) or more, as defined under Nevada Revised
Statutes, refinancing existing City debt should be at the discretion of the electors of Boulder
City.
Vote NO on this ballot question 2!
(Submitted by the Ballot Question Committee as provided for in NRS 295.217)

REBUTTAL TO ARGUMENT AGAINST PASSAGE

The arguments against this question are weak. It is true that the bond counsel informed the BC City
Council they were unsure about refinancing existing debt based on current law. The bond counsel is paid
to consider all current laws to reach its decision. Laws based on citizen ballot initiatives must be treated
like all other laws on the books (Boulder City Charter, Article X, Section 102(1)). The bond counsel
can’t simply decide to favor one law over another. In their opinion, the law “restricts” them from
recommending refinancing. The uncertainty created by Section 2-7-2 should be clarified so the bond
counsel and the City Council can understand the intent of the voters.

Why does the City Council want to refinance debt? Anyone who has borrowed money to later find
“economies,” such as a better interest rates or fee structures, realizes the cost savings. The City Council
is required to look for better deals on borrowed money (Ord. 1445, 8-9-2011). Right now they can only
refinance when the amount is less than one million dollars ($1,000,000.00). A ‘yes’ vote will allow the
city to save money on interest and fees while leaving the power to take on large new debts in voters’
hands.

(Submitted by the Ballot Question Committee as provided for in NRS 295.217)

 ANTICIPATED FINANCIAL EFFECT
This Ballot Question does not propose (i) a new tax, fee or expense, or (ii) the increase of an
existing tax, fee or expense. Depending on market conditions, a “yes” vote could result in
interest rate savings without the approval of the electors of Boulder City should the city and its
agencies and enterprises incur refunding debt obligations to refinance existing debt obligations as
authorized by the Ballot Question; however, the anticipated financial effect of a “yes” vote
cannot be determined at this time. The anticipated financial effect of a “no” vote would prohibit
interest rate savings with respect to existing debt obligations of the city and its agencies and
enterprises without the approval of the electors of Boulder City.