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<br />II. PURPOSE <br /> <br />A capital improvement is a major expenditure of municipal funds for the <br />acquisition or betterment to public lands, buildings, or other improvements <br />used as a city hall, toV\'ll hall, library, public safety, or public works facility, <br />which has a useful life of 5 years or more. F or the purposes of Minnesota <br />Statutes, Section 475.521, capital improvements do not include light rail <br />transit or related activities, parks, roadlbridges, administrative buildings <br />other than city or town hall, or land for those facilities. The City of Elk <br />River, Minnesota (the "City") has previously adopted a five year capital plan <br />for major expenditures, including a new library. <br /> <br />For a municipality to use its authority to finance expenditures under Section <br />475.521, it must meet the requirelnents provided therein. Specifically, the <br />city council must adopt a 5-year capital improvement plan that meats certain <br />statutory requirements, after holding a hearing on the plan. The council <br />must also approve the sale of capital ilnprovement bonds by a 3/5ths <br />majority of its membership. In addition, it Inust hold a public hearing for <br />public input regarding sale of the bonds. Notice of such hearing Intist be <br />published in the official newspaper of the lTIunicipality at least 14, but not <br />Inore than 28 days prior to the date of the public hearing. In addition, the <br />notice lTIUSt be posted on the City's official web site. The City is holding a <br />hearing on August 21, 2006 to consider this capital improvelnent plan and <br />the issuance of up to $5,000,000 of general obligations bonds for the <br />Library. Another public hearing \\Till be held at a later date to consider the <br />issuance of bonds, if any, for the future public worl(s facility. <br /> <br />The bonds must be approved by the voters only if the conditions for a <br />"reverse referendum" are met. If a petition signed by voters equal to at least <br />5 percent of the votes cast in the last general city election requesting a vote <br />on the issuance of bonds is received by the lTIunicipal clerk within 30 days <br />after the public hearing (by September 20, 2006), then the bonds Inay not be <br />issued unless approved by the voters at an election. If a vote is taken and the <br />referendum passes, the taxes would be levied on market value rather than tax <br />capacity . <br /> <br />The statute has established certain criteria that Intist be met. Under these <br />criteria, the City has considered the following eight points: <br /> <br />Ehlers & Associates, Inc. <br /> <br />Page 4 <br />