4.9. SR 10-25-1993 - Laserfiche WebLink

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rei ---\j ( ); !fil TO: FROM: MAYOR & CITY COUNCIL LORI JOHNSON, FINANCE DIRECTOR~~ DATE: OCTOBER 21, 1993 SUBJECT: STORM SEWER FINANCING There are several items on Monday night's Council agenda relating to the Storm Sewer Master Plan and other storm sewer improvements. There has been considerable discussion about the need for storm sewer improvements and the necessity of having a master plan. However, there has been very little discussion relating to the financing of these projects. e The City has already incurred approximately $204,000 in regional storm sewer construction and engineering costs. This does not includes approximately $3,700 of engineering for other minor storm drainage issues nor does it include the costs incurred by the Street Department to rectify some minor drainage problems. All of these costs are currently being tracked and will be charged to the Storm Sewer fund. On September 13, 1993, the City Council discussed implementing a city-wide charge for storm drainage. Once established, those revenues will be used to offset this $200,000 plus deficit which has already been incurred for regional storm sewer improvements. An additional storm sewer improvement is on the agenda for Monday night in the Deerfield 3rd Addition. It is estimated that this project will cost between $125,000 to $150,000. It is important that the City Council identify a financing source before authorizing this project. It is also possible that, given the size of this project plus the strong possibility of other storm sewer projects in 1994, the City may need to issue storm sewer improvement bonds in order to finance the construction of these projects. Prior to issuing bonds and prior to proceeding with storm sewer improvements the Council will need to identify a revenue source for these improvements. If a city-wide storm drainage charge is implemented beginning in 1994, revenues would be available to make debt payments for future storm sewer improvements. Until rates and areas to be charged are determined, the annual amount of revenue will not be known. This amount of annual revenue will determine the amount of bonds that could be issued and therefore determine the amount of unassessed storm sewer improvement projects that can be undertaken. In addition, the $200,000 deficit will need to be eliminated, therefore, not all of the revenue collected can be assumed to be pledged for future projects. e Once the City Council determines that the city-wide billing is the method it plans to use to finance storm sewer improvements, the amount of storm sewer improvement projects that can be P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425