10-25-2023 Council Packet - Laserfiche WebLink

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How to Fund a Project City Funds The City of Little Canada could utilize existing annual funding. The City council prioritizes the use of funds each year during the budgeting process. However, many city initiatives compete for limited funding. The City may also consider bonded debt as a means to fund projects with smaller annual payments. What is bonded debt? The city has the ability to incur debt by issuing a municipal bond. Typically, a bond period is 10 years and the city would make annual debt payments until the bond is paid off. The debt service toward the bond could be absorbed by the existing tax levy (i.e., reduction of other projects or services), or the tax levy could increase to pay for the new debt service. Example: If a $2M bond is issued, the city would have annual debt payments of $210K. In comparison, the city currently raises nearly $3.7M with the existing annual levy. The new debt payments would constitute a tax levy increase of 6% or $44/year for the median household. Grant Funding Another option to pay for this type of project is grant funding. However, a grant must be applied for and is not always inclusive. Also, different grant programs will pay for different types of projects (some fund sidewalks, some fund trails, some fund road narrowing, etc.). Several grants are available, including: Metropolitan Council (Federal Dollars) • Safe Routes to School Program: $1M max award • New Pedestrian Facilities Program: $2M max award • New Bike Facilities Program: $5.5M max award • Road Modernization Program: $5.5M max award Infrastructure Investment & Jobs Act (Federal Dollars) • Safe Streets For All Program • Rebuilding American Infrastructure with Sustainability and Equity (RAISE) MnDOT • Active Transportation Program: $500,000 max award • Local Road Improvement Fund: $1.25M - $1.5M MnDNR • Local Trail Connections Program: $250,000 max award