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Elk River City Council CIP Worksession January 26, 1998 Page 5 The city has the ability to bond for approximately one-half of its annual MSA allocation for ten years. Using this method, the city could bond for about $1.75 million worth of 1998-99 improvements which could be financed with MSA funds in the amount of $275,000 annually for ten years (note the interest expenses). This bonding approach would fund most of the shodage identified above, however, the shortage identified above ($2.2 - $2.,5 million) is less than the total project shortage and, additional MSA funds would need to be accessed. This relates directly to the other $27,5,000 per year that is available (which is not in the bonded project) and is also being used for this street construction in addition to the future completion of the street to four lanes. The use of MSA funds for the east Elk River project is in direct competition with use of MSA funds on the School Street expansion project and the Business Center Ddve/Waco project. The total cost of the School Street expansion project is in the $325,000 range and the total cost of the Business Center Ddve/Waco project, which will not be state funded, is in the $800,000 range. These two projects and the balance of the shortages of the east Elk River street project, are in competition for the same MSA funds. The only part of this project that is moving forward is the street connection work between 171,t and 173rd. The developers will be responsible for funding the street improvements within their project boundary. Council direction to obtain additional right-of-way and appraisals of the right-of-way need to be considered for the area between 173,d and the trailer court project. The shortage for the street improvements with Area A is less than $100,000 as almost all of this project will be financed by the developments. Nonetheless, if only Area A is authorized, the city will still be faced with the street financial shortages as noted above, but it may be advantageous for the city to save and reserve some MSA monies for this undertaking. It was noted that some of the shodage may be recaptured through assessments to other benefited property owners. An issue associated with the east Elk River improvement project, but technically not considered part of the improvement project, is the potential acquisition of business park land by the city. The city could potentially acquire parts of the Brown property, the Eull property, and the Vandenberge property for business park developments. It is anticipated that the Vandenberge property will be part of the trailer court redevelopment project and be developed into business park lots in cooperation with the developers. Regarding the Brown property, it is anticipated that approximately 80 acres of land will be west of the future street. Of this 80 acres, approximately half, or 40 acres, is developable and will receive assessments for the trunk utilities. The balance of the property will be used for storm drainage and is in a wetlands condition. The acreage in the wetlands needs to be confirmed and, hopefully, will be less so that more business park property can be developed. Including