8. ICESR 11-14-2012 FINANCIALS - Laserfiche WebLink

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Memo To: Tim Simon, City of Elk River From: Mark Ruff, Ehlers • Date: August 16, 2012 Subject: Financing Options for Proposed Ice Arena General Legal Authority; Financing Options The ability to undertake projects, issue bonds and levy taxes is governed by state law. Recreational facilities have more limited options than City infrastructure projects. Generally, cities have funded recreation facilities either through a general obligation (G.O.) bond pursuant to a referendum, through an annual appropriation lease revenue bond, or through a G.O. tax abatement bond. These three options are outlined in more detail below. A portion of the costs of the ice arena may be eligible for funding through G.O. Equipment Certificates (must be repaid within 10 years). We can pursue these options further if you have detail on the type and amount of costs associated with the project. General Legal Authority; Financing All Municipal Projects 1. Issuance of General Obligation Bonds pursuant to an Election as Outlined in Minnesota Statutes, Chapter 475. If the City determines to proceed generally under Chapter 475, an election is required to be held on the issuance of bonds. • The longest part of the election process is the allowance of a forty-nine-day notification to the County Auditor. • The required ballot language assumes that the entire debt service is paid from ad valorem taxes on all taxable property within the City. • If the City chooses, a portion of the bonds could be paid from other sources and the City-wide ad valorem tax levy could be reduced on an annual basis. • Property taxes are levied on the basis of tax capacity. Previously, property taxes were levied on the basis of market value. VWWA,Ohlors-Irl::, (orTi 1) EHLERS Minnesota phone 651-607-8500 3060 Centre%into Drive LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 55113 1122 toll free 800-552-1171