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(Draft January 2002) Key Financial Strategies <br /> For Elk River <br /> <br />Pavement <br />Management <br />Program <br /> <br />This program represents the costs of rebuilding the <br />municipal street system. The Program finances <br />reconstruction projects. It does not finance sealcoating or <br />new construction. <br /> <br />Timing On-going. <br />Estimated Cost <br /> <br />Funding <br /> <br />Approximately $500,000 per year. <br />Street Improvement Fund - The City has established a <br />fund for street improvement projects. This Fund provides a <br />funding vehicle, but the current balance is not sufficient for <br />long-term sustainability. The City may wish to establish a <br />street improvement permanent improvement revolving <br />fund under M.S. 429.091. This approach gives greater <br />flexibility in the use of assessment revenue and creates <br />bonding authority. <br /> <br />Assessments - Special assessments are a key to financing <br />pavement management activities. The amount assessed <br />determines the funding needed from other sources. The <br />timing and flow of assessment revenues influences other <br />financial decisions. Current planning assesses 33% of the <br />improvement costs with a ten-year repayment period. <br /> <br />Other Revenues - Unless all of the costs are assessed, some <br />other sources of revenue will be needed. Currently, the <br />Street Improvement Fund receives a portion of the Landfill <br />surcharge. This revenue plus interest on the investment of <br />the Fund balance should be sufficient to support the <br />Program for the foreseeable future. If the landfill monies <br />are not available, then other revenues will be needed. <br />State aid for road maintenance and construction can only <br />be used for streets that are included in the state aid street <br />system. Other non-tax revenues are currently earmarked <br />for various public facility projects. The only remaining <br />revenue source is the property tax. <br /> <br />Debt - The City does not have sufficient reserves to <br />internally finance this program. The City should finance <br />improvement costs through the issuance of bonds and use <br />cash reserves to manage the cash flow. The City may issue <br />traditional G.O. improvement bonds or G.O. bonds of a <br />permanent improvement revolving fund. Both options <br />require (1) not less than 20% of the costs are assessed and <br />(2) the City must conduct the improvement hearing <br />pursuant to Minnesota Statutes, Chapter 429. <br /> <br />Page <br /> 51 <br /> <br /> <br />