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City of Elk River <br />Five-Year Capital Improvement Plan <br />2010 through 2014 <br />I. INTRODUCTION <br />In 2003, the Minnesota State Legislature adopted a statute (Section 475.521, <br />referred to herein as the "CIP Act") that allows cities to issue municipal <br />bonds under a specific type of capital improvement plan without the usual <br />referendum requirement (except for the so-called "reverse referendum" <br />described below). The CIP Act applies to capital improvements consisting <br />of city halls, public works, and public safety facilities. The 2005 Legislature <br />added towns to the meaning of a municipality and town halls and libraries to <br />the meaning of a capital improvement under the CIP Act. <br />In 2006, the City issued $3,220,000 G.O. Capital Improvement Plan Bonds <br />to finance a new City library under the CIP Act. This capital improvement <br />plan is intended to supercede the previous plan for the City library. <br />Throughout this plan, the term "capital improvement" refers only to those <br />improvements identified in the CIP Act, as summarized above. Capital <br />expenditures for other public improvements in the City will be financed <br />through other means and are described in a separate capital improvement <br />plan also adopted by the City Council, and are not governed by this plan. <br />II. PURPOSE <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, town hall, library, public safety, or public works facility, <br />which has a useful life of 5 years or more. For the purposes of the CIP Act, <br />capital improvements do not include light rail transit or related activities, <br />parks, road/bridges, administrative buildings other than city or town hall, or <br />land for those facilities. A Capital Improvement Plan ("CIP") is a document <br />designed to anticipate capital improvement expenditures and schedule them <br />over afive-year period so that they may be purchased in the most efficient <br />City of Elk River CIP for Financing Purposes Page 3 <br />