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(Draft January 2002) Key Financial Strategies <br /> For Elk River <br /> <br />on legislation that affect other traditional local revenues. Caps on <br />building permits fees, connection charges and other development fees <br />could significantly impact ELk River's financial capacity. <br /> <br />Non-Tax Revenues <br /> <br />A financial strength of the City is the diversity of its revenue base. This diversity <br />has allowed the City to keep pace with services and facilities without <br />overburdening the taxpayer. <br /> <br />Landfill revenues. Revenues collected from the landfill surcharge have <br />been an essential part of capital improvement finance. The long-term <br />status of this revenue is one of the most important financial planning <br />issues facing the City. When this revenue goes away, the City may face <br />the need to delay capital improvements and/or to increase use of other <br />revenues. <br /> <br />Development fees. ELk River derives a variety of revenues directly from <br />new development. A slowdown in the pace of development reduces <br />revenues and presents financial consequences. Some development <br />revenues (i.e. - building permit fees) help to support the General Fund. <br />Connection charges are used to pay capital improvements and debt. The <br />City should continue to forecast future growth and to monitor growth <br />capacity. <br /> <br />Special assessments. The ability to assess the costs of public <br />improvements to benefited properties reduces the demands on property <br />taxes, utility revenues and other sources. <br /> <br />Tax increment. The City has been able to use tax increment financing to <br />encourage development and finance infrastructure. The 2001 changes in <br />the property tax system will reduce the amount of tax increment <br />revenue received by the City. The capacity of tax increment financing to <br />support current obligations and new initiatives is a key financial <br />strategy. <br /> <br />Capital investment was a key topic of the financial planning process. The ability <br />to provide capital improvements in a timdy and affordable manner is an essential <br />function for the City. The planning process illustrated several key financial <br />strategies for capital investment: <br /> <br />Capital Investment <br /> <br />Monies from the landfill surcharge are needed to finance planned <br />expansions of the Library and City Hall. Surcharge revenues should be <br />earmarked for this purpose. <br /> <br />The Government Buildings Reserve does not contain enough money to <br />support all potential facility needs. In addition to the Library and City <br />Hall projects, other potential facility investments include one or more <br />fire stations, community center, second liquor store and ice arena <br /> <br />Page <br /> 4 <br /> <br /> <br />