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V. FINANCING THE CAPITAL IMPROVEMENT PLAN <br />The total amount of requested expenditures under the Capital Improvement <br />Plan is approximately $2,500,000. If these expenditures are to be funded, <br />that amount of money is anticipated to be generated through the sale of <br />approximately $2,570,000 in bonds over the five -year period. <br />In the financing of the Capital Improvement Plan, two statutory limitations <br />apply. Under Chapter 475, with few exceptions, municipalities cannot incur <br />debt in excess of 3% of the assessor's taxable market value for the <br />municipality. However, Section 521 of Chapter 475 allows municipalities <br />with a population of fewer than 2,500 to be exempt from net debt limits. In <br />the City the population is 9,785 (2011 U.S. Census Estimate). Therefore, <br />the limitation on net debt does apply. In the City the payable 2013 TMV is <br />$794,711,000. Therefore, since the net debt limits does apply, the total <br />amount of outstanding debt cannot exceed $23,841,330. As of this date the <br />City had $ -0- subject to the legal debt limit. <br />Another limitation on bonding under the Capital Improvement Plan Statute <br />(475.521) is that without referendum, the total amount that can be used for <br />principal and interest in any one year for CIP debt cannot exceed 0.16% of <br />the TMV for the municipality. In the City, that amount is $1,271,538 <br />($794,711,000 x .0016). <br />The principal and interest payments are estimated to start at the peak of <br />$190,065 in calendar year 2031. <br />Under the Capital Improvement Plan, the City will secure approximately <br />$2,570,000 in general obligation bonds in the year 2013 to finance the <br />Public Works Building. No additional general obligation bonds are <br />anticipated to be issued at this time. The general obligation bond issue will <br />be repaid over a 20 -year period. The par amount of the issue is based on the <br />amount listed in Appendix A plus estimated issuance costs. The proposed <br />general obligation capital improvement bond (including issuance costs) is <br />shown in Appendix B. <br />Ehlers & Associates, Inc. Page 9 <br />14 <br />