9.5. SR 05-18-2015 - Laserfiche WebLink

Home Browse Search

79 City of Elk River - Parks and Recreation Master Plan Chapter 6: Implementation Funding Sources The community invests substantial financial resources to acquire parkland, add park amenities and build facilities. These investments improve the quality of life for residents of all ages and abilities and sets Elk River apart from other communities as a destination community. Following the substantial initial investment, ongoing revenue streams are required to maintain parks, trails, amenities, and facilities, as well as to provide for future replacement. Two methods are generally utilized to maintain and replace assets, 1) Pay as you go – a savings plan to set aside funds each year to pay for future costs; or 2) One-time bulk infusion, utilizing a large singly year levy increase or using the proceeds from a bond sale. Funding streams are classified as Sustainable – a consistent, long-term active source for funds; or Intermittent – funding sources that are difficult to schedule, may require matching funds and are typically one-time revenues. It is anticipated that the city will use multiple methods to fund the system. The following sections provide additional information about the types of funding sources identified in Table 6.6. The funding sources are categorized by sustainable and intermittent. Sustainable Provides long-term funding over multiple years. General Funds Tax Levy The General Fund is typically used to maintain the parks and recreation system. The General Fund is the primary funding source for ongoing maintenance, natural resource management, operations, and minor amenity additions. Most grants also have a matching requirement that is often pledged with general funds. Dedicated Tax Levy A dedicated tax levy identifies funds sourced to pay solely for park improvements. By identifying a separate general tax levy line item in additional to normal tax levy line items for core city operations, taxpayer transparency is increased for funds reserved for planned, long-term improvements. This functions as a pay-as-you go approach versus a large one-time infusion of capital. The amount of tax levy dedicated may be included in levy limits if enacted again whereas debt service tax levy is often time outside levy limits. Bonding A number of bonding options exist including General Obligation Bonds, Annual Appropriation Bonds, Tax Abatement Bonds, and Revenue Bonds. Bonding provides a large one-time infusion of capital for acquisition, replacement, repair, expansion, or new construction. Bonding allows for current and future residents to pay for park improvements over time which typically correspond to useful life of the asset improvements. General Obligation Bonds provide the lowest interest rate while revenue bonds may be 50-100 basis points higher than a General Obligation Pledge. Revenue Bonds need to have sufficient revenue identified for repayment and generally requires a coverage ratio of 105 percent.