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Impact of City Charter Requirements on <br />PMR Financial Recommendations <br />• Where exceptions are made, allowing certain properties <br />to be specially assessed (within specific geographical <br />areas) without referendum, bonds become taxable <br />because they provide a private benefit to those property <br />owners not available to the rest of the City <br />• Taxable bonds result in interest rates of 160 basis points <br />higher than tax-exempt bonds <br />— For example, 4.00% becomes 5.6% if the bonds are taxable <br />— On $3 million bond issue, this costs an extra $465,645, assuming <br />15 year payback <br />Pubii: Se; <br />Springsted <br />Impact of City Charter Requirements on <br />PMR Financial Recommendations <br />• Funding sources recommended provide a method of <br />financing widely used by most other cities in Minnesota <br />• Implementing the PMR is in the City's best interest <br />— Increasing pavement maintenance and reconstruction spending to <br />amounts we have recommended projected to result in net savings <br />of $11 million over the next ten years <br />Public _ect9, Ad <br />Springsted <br />12 <br />