We’ve had a few inquiries in the last few months about planning for a 2023 bond referendum. If you’re thinking about it, here are a few points to keep in mind —
There are fewer eligible dates for bond referenda than there used to be. You can only have a bond referendum on a date that all the precincts in your unit are otherwise required to be open. So, November 2023 is an eligible date for most municipalities, and counties are generally out of luck until 2024.
The formal authorization process takes three separate Board actions plus a public hearing, and must be completed by early August. The timeline for preparing ballots keeps getting backed up with the increase in early voting opportunities. In 2022, we had local boards of elections asking for final, approved ballot language by early August. We always recommend as a first step in the process to give your local board a head’s up to be sure we keep the schedule on track.
If you’re starting the formal process in June, you need to complete your “informal” process before then. By the time we start the formal process, the elected officials need to have a good idea as to where they’re starting with bond amounts and purposes. That can all be whittled down as the process moves forward, but those informal discussions – including with the LGC staff and your financial adviser, if you use one – ought to be completed before the formal process starts.
Each separate general purpose for the bonds has to be the subject of a separate ballot question. Bonds that have related purposes can be included in a single question; unrelated purposes cannot be combined. For example, a bond purpose of “public safety” could cover improvements to police and fire facilities. You could not, however, combine “fire facilities” and “park improvements” on a single ballot question. The ballot questions themselves have to follow a format set out in the statutes that provides for very brief questions.
You can’t use public money to promote a “yes” vote. A bond referendum is designed to put the decision in the hands of the voters, so it wouldn’t be appropriate to use public money to influence the decision. “Informational” material is fair game, but not “promotional” material.
You have seven years to issue bonds once approved by the voters. The LGC can extend this period to ten years, and over the last several years the LGC has routinely granted extensions that local governments request. There is never any obligation for the locality in fact to issue any or all of the bonds approved at a referendum.
The significant timing issue in proceeding with a bond issue after a referendum centers around the progress of the projects that are going to be financed. The LGC wants you to have construction bids in hand representing at least a substantial amount of the amount borrowed. We can coordinate the bond financing process with your construction processes. A bond issue is a 90- to 120-day process in any event, but the construction schedule drives the financing schedule.
Contact us if you’d like to talk about how a bond referendum might proceed in your home town. Please click here to see our disclaimer, and click here to learn more about our public finance practice.