Laserfiche WebLink
(Draft January 2002) Key Financial Strategies <br /> For Elk River <br /> <br />Debt <br />Debt provides the capacity to finance needed infrastructure, facilities and <br />equipment. Debt creates long-term commitments for city revenues. Debt that <br />requires property tax support competes with services for limited tax dollars. <br /> <br />Each debt tool is governed by a separate set of statutes. The relevant <br />statutes describe the limitation on the debt and process for issuance. <br /> <br />The statutory debt limit is 2% of taxable market value. The amount of <br />the debt limit changes over time as valuation increases, existing debt is <br />retired and new debt is added. <br /> <br />The debt limit does not apply to many types of debt. In general, bonds <br />subject to the debt limit include voter approved bonds, equipment <br />certificates/capital notes, and lease financing over $1,000,000. State Law <br />excludes most other forms of debt from the debt limit. <br /> <br />The chart below shows a snapshot of outstanding general obligation debt. The <br />key point illustrated by this chart is the source of support for the City's debt. <br />The vast majority of the debt is self-supporting, paid with special assessments <br />and utility revenues. <br /> <br />2,125,000 <br /> <br />2,476,500 <br /> <br />8,860, <br /> <br />0,580,000 <br /> <br />Tax increment ·Improvement · Revenue [] Lease <br /> <br /> R'gure 21 - Outstanding G.O. Debt (12/$1100) <br /> <br />Another measure of debt is the speed of repayment. The figure on the next page <br />shows an excellent plan to retire outstanding G.O. bonds. <br /> <br /> · More than one-half of the debt is retired within five years. <br /> <br /> · After ten years, less than 15% of total principal remains unpaid. <br /> <br />Page <br /> 36 <br /> <br /> <br />