The City Charter only allows the city to sell bonds using a competitive bid process. Measure 2F would allow for a private or negotiated bond sale with the city manager’s recommendation and City Council’s vote of approval.
Recommendation: leaning for
The issue of private bond sales has come to the fore now because a new municipal electric utility wouldn’t have a bond rating and could be subject to higher rates to compensate for the underwriters’ increased risk. In a private bond sale, Boulder could explain why the bonds would not be such a risky investment and could also have a preference to sell bonds to local investors. The concern with private, negotiated bond sales is the fear of corruption or influence known as “pay to play.” In the early 2000s Boulder County and BVSD were both pressured to move away from negotiated bond sales (Daily Camera, October 27, 2013). In the case of this ballot measure, the City Council vote to approve negotiated bonds would be subject to public scrutiny.
City of Boulder Ballot Question 2F (Approved Ballot Language)
Negotiated or Private Bond Sales
Shall Section 98, “Term of bonds - disposal of bonds” of the Charter of the City of Boulder be amended as described in Ordinance No. 7910 to give the City the option to sell bonds or other obligations by a negotiated or private sale when determined to be to the best advantage of the City?
- For the measure
- Against the measure
See Ordinance 7910 to refer 2E to the voters.
https://www-static.bouldercolorado.gov/docs/Ordinance_7910_Term_of_Bonds-1-201308271457.pdf
Recommendation: leaning for
The issue of private bond sales has come to the fore now because a new municipal electric utility wouldn’t have a bond rating and could be subject to higher rates to compensate for the underwriters’ increased risk. In a private bond sale, Boulder could explain why the bonds would not be such a risky investment and could also have a preference to sell bonds to local investors. The concern with private, negotiated bond sales is the fear of corruption or influence known as “pay to play.” In the early 2000s Boulder County and BVSD were both pressured to move away from negotiated bond sales (Daily Camera, October 27, 2013). In the case of this ballot measure, the City Council vote to approve negotiated bonds would be subject to public scrutiny.
City of Boulder Ballot Question 2F (Approved Ballot Language)
Negotiated or Private Bond Sales
Shall Section 98, “Term of bonds - disposal of bonds” of the Charter of the City of Boulder be amended as described in Ordinance No. 7910 to give the City the option to sell bonds or other obligations by a negotiated or private sale when determined to be to the best advantage of the City?
- For the measure
- Against the measure
See Ordinance 7910 to refer 2E to the voters.
https://www-static.bouldercolorado.gov/docs/Ordinance_7910_Term_of_Bonds-1-201308271457.pdf
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