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BALLOT QUESTION NUM.

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City of Boulder City

Shall the Boulder City Code be amended to provide that Boulder City and its agencies and enterprises
may refinance existing debt obligations, as determined by the City Council?

Yes .......... o
No .......... o
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) 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) 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 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. Currently, approval from the electors of Boulder City of the refinancing of 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.

A “YES” vote would allow for the Boulder City Code to be amended to provide that Boulder City and
its agencies and enterprises may refinance existing debt obligations, as determined by the City Council.

A “NO” vote would not allow the Boulder City Code to be amended to allow for the refinancing of
existing debt obligations as determined by the City Council.

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ARGUMENT FOR PASSAGE

If you had a chance to refinance your mortgage and save thousands of dollars in interest, you would do
it in a heartbeat. Approving this ballot question will allow the City to do the same thing, except Boulder
City residents could save millions of dollars, not thousands. That’s why the only logical vote on this
measure is “yes.”

Nearly a decade ago, Boulder City residents passed a ballot question requiring voter approval before
the City could incur debts of more than $1 million. It was a step taken consistent with residents’
desire to actively participate in managing their community. However, in this case, there were unintended
consequences that are costly to residents. Bond interest rates go up and down, and borrowing terms
change. Based upon their analysis of the 2010 code, the City’s bond attorneys have determined that debt
refinancing is legally viewed the same as new borrowing, even though refinancing at a lower interest
rate doesn’t add to the debt but actually reduces it. For that reason, the City needs voters to exempt debt
reduction activities like bond refinancing from the code.

In the past, opponents of this common-sense measure proposed just asking a different attorney and
hoping for a different answer; that’s an idea that won’t fix anything. The same holds true for opponents’
suggestion that the City create a ballot question every single time it wants to refinance a bond. Financial
markets move too quickly, and cost-saving opportunities evaporate faster than a drop of water on the
hood of a hot car. The only solution to this serious, costly problem is to clarify the law.

To be absolutely clear, voting “yes” on this measure will not erode residents’ ability to limit new
spending, but rather could save Boulder City residents millions of dollars over the life of these bonds.
With significant investments by the City in new electrical, water and sewer infrastructure during the past
decade, voters can’t afford to pay banks millions of dollars in extra interest because of unclear language
in municipal code. Vote “yes” to save money.

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

REBUTTAL TO ARGUMENT FOR PASSAGE

Voters made their voice clear when this question failed at the 2018 November Election. Yes, financial
markets move quickly and cost savings evaporate, but voters have indicated they prefer to decide when
refinancing is appropriate, even if it means losing out on interest savings. And although refinancing
does not add to the principal debt, it is considered “new” debt.

Any change to the Code which was implemented by initiative petition should be initiated by those
who voted in favor of this amendment. It should be changed or modified in the same manner it was
implemented.

(Submitted by the City Clerk as provided for in NRS 295.217)

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ARGUMENT AGAINST PASSAGE

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 debt due to limitations contained
within Section 2-7-2 of the Boulder City 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) 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 City Clerk as provided for in NRS 295.217)

REBUTTAL TO ARGUMENT AGAINST PASSAGE

Bond counselors are licensed attorneys with a high level of training and a very specific area of expertise.
Their role is to represent a municipal bondholder’s interest—in this case, the City of Boulder City—to
ensure that its actions are consistent with statutory requirements. Because bonds represent the “full
faith and credit” of the issuer, these attorneys conduct rigorous due diligence to ensure that the bond
issuance is correct, complete and properly structured. This level of investigation requires a thorough
understanding of all related legal and financial issues, including Boulder City Code. To suggest that the
City can simply seek another opinion, like you might do for a car repair, dramatically undervalues their
level of expertise and is simply an attempt to hamper the City’s efforts to save you money.

As for the limitation on expenditures without voter approval, this measure would not diminish residents’
ability to oversee City spending, as was the intent, as refinancing bonds does not create new debt but
rather reduces the cost of existing bonds. Rejecting this common-sense measure is like cutting off your
nose to spite your face. The only reasonable vote is to approve this ballot question.

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

FISCAL NOTE

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.

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