11-18-13 Council Packet - Laserfiche WebLink

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III. BONDS A. Generally. The City Charter and Chapter 429 do not directly deal with issuance of bonds. Rather, bond issuance is mostly governed by Minnesota Statues, Chapter 475. Most cities finance infrastructure by issuing "general obligation bonds," which are secured by the city's full faith and credit. (These bonds carry lower interest rates than bonds secured solely by a particular revenue stream). Under Chapter 475, there are four basic ways that the City may issue general obligation bonds to finance infrastructure: 1. Voter - approved bonds (election). 2. Improvement Bonds (without election). 3. Street Reconstruction Bonds (reverse referendum) 4. Utility Revenue General Obligation Bonds (without election) Each of these bond types is discussed in turn below. B. Voter Approved Bonds 1. The City may choose to hold an election regarding issuance of bonds for any public improvement, including street reconstruction. The bonds may be issued if approved a majority of those voting on the question. 2. The City used this option to finance improvements to the intersection of Main Street and Lake Drive and the intersection of Birch Street and Ware Road. (The bonds were approved in the 2010 general election, and were issued in November, 2012.) C. Improvement Bonds 1. Improvement bonds are paid at least in part with special assessments. They may be issued without election if at least 20% of City's cost for the improvement is paid with assessments. The balance is secured by a general property tax levy. 2. Improvement bonds are exempt from debt limits under Chapter 475 (which is 3% of the taxable market value in the City).