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To: Tim Simon, City of Elk River <br />From: Mark Ruff, Ehlers <br />Date: August 16, 2012 <br />Subject: Financing Options for Proposed Ice Arena <br />The ability to undertake projects, issue bonds and levy taxes is governed by state law. <br />Recreational facilities have more limited options than City infrastructure projects. Generally, <br />cities have funded recreation facilities either through a general obligation (G.O.) bond pursuant <br />to a referendum, through an annual appropriation lease revenue bond, or through a G.O. tax <br />abatement bond. These three options are outlined in more detail below. <br />A portion of the costs of the ice arena may be eligible for funding through G.O. Equipment <br />Certificates (must be repaid within 10 years). We can pursue these options further if you have <br />detail on the type and amount of costs associated with the project. <br />Issuance of General Obligation Bonds pursuant to an Election as Outlined in Minnesota <br />Statutes, Chapter 475. If the City determines to proceed generally under Chapter 475, an <br />election is required to be held on the issuance of bonds. <br />® The longest part of the election process is the allowance of a forty- nine -day <br />notification to the County Auditor. <br />® The required ballot language assumes that the entire debt service is paid from <br />ad valorem taxes on all taxable property within the City. <br />® If the City chooses, a portion of the bonds could be paid from other sources <br />and the City -wide ad valorem tax levy could be reduced on an annual basis. <br />® Property taxes are levied on the basis of tax capacity. Previously, property <br />taxes were levied on the basis of market value. <br />VWV1 /\i e "fler<,..Ir1C; coiY1 <br />EHLERS <br />Minnesota phone 661 -697 -8500 3060 Centre Pointe Drive <br />LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651- 697 -8655 Roseville, MN 55113 -1122 <br />toll froo 800 -552 -1171 <br />