6.5. SR 12-15-1997 - Laserfiche WebLink

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State of Minnesota Department of Finance 400 Centennial Building 658 Cedar Street St. Paul, Minnesota 55155 Voice: (612) 296~5900 Fax: (612) 296-8685 TTY: 1-800-627-3529 November 26, 1997 Mr. Patrick Klaers City Hall Administrator 13065 Orono Parkway PO Box 490 Elk River, MN 55330-1900 Regarding: use of state bond-financed property Dear Mr. Klaers: The City of Elk River has submitted a capital budget request to the Department of Finance for consideration for inclusion in the Governor's proposed capital budget to the 1998 Minnesota Legislature. The Minnesota Legislature is expected to approve a capital budget in the 1998 Legislative Session, and should your project be approved by the Legislature, Elk River will be entering into a grant agreement with a designated state agency, which will provide the terms and conditions under which the grant is made. Your capital budget request indicates that your community expects to enter into an agreement with the Minnesota Sports Federation to operate a program within the indoor sports recreational facility and dome. The purpose of this letter is to make you aware of the responsibilities Elk River must agree to before the State would enter into a grant agreement with you to disburse the state bond funds. We are telling you about these requirements because similar projects were approved in the 1994 and 1996 capital budgets where the communities did not understand the responsibilities they must agree to as the recipient of state general obligation bond proceeds. Some communities, that have received approval for facilities that will be utilized by a non-profit organization, mistakenly believe that their sole responsibility is to receive the state money and turn it over to the non-profit organization to build the facility. The community believes that they have no ongoing responsibilities. This is not correct. The use of state general obligation bond proceeds is controlled by the Minnesota State Constitution, Minnesota Statute 16A. 695 and the Order of the Commissioner of Finance Relating to Use and Sale of State Bond Financed Property. A copy ofM. S.16A.695 and the Commissioner's Order were included in the capital budget request form package. The Constitution requires that facilities financed with general obligation bond proceeds must be publicly owned. The Constitution does not allow state bond-financed property to be owned by a non-profit organization, nor does it allow the community which owns the facility to enter into a long- AN EQUAL OPPORTUNITY EMPLOYER