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Capital Improvement Financing <br />Implementing capital improvements requires the utilization of sound, economical <br />financing methods. The City of Elk River has several financing mechanisms available, <br />ranging from cash reserves to special-purpose funds to borrowing through the issuance <br />of municipal bonds. Several funding sources may be used for a project. The following <br />funding sources are identified as potential financing mechanisms for the projects in the <br />CIP: <br />Internal Sources: <br />Capital Outlay Reserve – this fund was established to help build reserves for the <br />purchase of the city’s information technology hardware and software. <br />Development Fund – this fund accounts for activities related to economic development <br />within the city. <br />Equipment Replacement Fund – this fund was established to account for the <br />purchases of the city’s vehicles and mobile equipment. Funding is provided through <br />departmental charges based on the amortization of their respective equipment. <br />Government Buildings Reserve – this fund was established to provide funding for the <br />replacement and/or rehabilitation of city facilities. The major source of revenue is from <br />landfill expansion fees. <br />GRE Reserve – this fund was established to account for unrestricted revenues received <br />from the license agreement between the city and Great River Energy. The agreement <br />terminated in 2019 and eventually the fund will cease to exist. The available funds can <br />be used for city projects that cannot be financed by alternative revenue sources. <br />Library Fund – this fund accounts for any library maintenance costs which are not paid <br />by the Great River Regional Library System. <br />Liquor Fund – this fund accounts for the operations and maintenance of the city’s two <br />off-sale municipal liquor stores. A portion of the profits provide funding for park <br />improvement projects. <br />Multipurpose Facility – this fund accounts for the operation and maintenance of the <br />multipurpose facility which is funded by user fees. <br />Park Dedication – this fund accounts for park dedication fees from developers and <br />funds expenditures for park land acquisitions and park capita l improvements. <br />Park Improvement – this fund was established to account for the replacement and <br />maintenance of park equipment and for the beautification of city parks. It is financed by <br />an annual transfer from the Liquor Fund. <br />4