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3 3 3 3 3 a Available Funding Sources • 10 Year Projected Tax Rate Impact (5% Growth) Annual Impact Projected Tax Rate Impact (7.5% Growth) Annual Impact Projected Tax Rate Impact (10% Growth). Annual Impact 2005 1.529% $ 34.93 1.529% $ 34.93 1.529% $ 34.93 2006 2.140% $ 48.87 2.090% $ 47.73 2.042% $ 46.65 2007 10.558% $ 241.14 10.073% $ 230.06 9.620% $ 219.72 2008 17.508% $ 399.88 16.315% S 372.63 15.227% $ 347.79 2009 18.283% $ 417.59 16.641% $ 380.08 15.179% $ 346.68 2010 19.793% $ 452.08 17.596% $ 401.90 15.686% $ 358.26 2011 9.769% $ 223.13 8.483% 8 193.75 7.390% $ 168.78 2012 9.752% $ 222.73 8.271% $ 188.91 7.041% $ 160.83 2013 9.758% $ 222.87 8.084% $ 184.63 6.726% $ 153.61 2014 9.752% $ 222.73 7.891% $ 180.22 6.416% $ 146.54 General Obligation Bonds Repaid By Property Tax Levy (Minnesota Statutes Chapter 475) Springsted Property tax dollars do not lend themselves particularly well to the funding of capital projects on a pay -as- you -go basis because they tend to result in substantial volatility in the tax rate and in the resulting property taxes paid. This volatility has the potential to disrupt the planning process of the City because taxpayers generally do not respond favorably to volatile tax rates. In addition, the legislature has imposed levy limits on local governments from time to time. If levy limits were again imposed, a property tax levy for funding the PMR would most likely not be available to the City. The use of the property tax levy would also result in tax - exempt properties not contributing to funding of the PMR. Property tax dollars do lend themselves fairly well to funding annual maintenance expenditures whose costs are generally stable in current year dollars. In this regard the property tax levy would be a reasonable source for funding the annual sealcoating and overlay portion of the PMR. A general obligation is as an obligation that pledges the full faith and credit of the City to payment of principal and interest. The bond owner correctly understands this to mean that all available assets and resources of the City, including the unlimited power to tax, will be used by the issuer to fulfill the contract to pay back the amount of the bond with the amount of interest agreed upon. The security for a general obligation bond is the pledge of those resources and taxing powers. The statute requires that the issuance of general obligation bonds must be approved by a majority of voters voting on the question. If a bond election fails, the same question for the same amount may not be resubmitted to the voters for six months, and if it fails a second time, a one -year delay is required. The statute read literally means that a change of $1 in the amount would permit an early resubmission, but general practice requires at least a 5% reduction in amount or a substantive change in the purpose. The bonds issued are subject to the net debt limit of the City which is 2% of Estimated Market Value. The City's estimated market value for pay 2005 is $1,535,208,800 which results in a current debt limit of $30,704,176. The City currently has net debt subject to the limit of approximately $5,169,000. The City's remaining net debt limit is approximately $25,535,176. - 1 7 9 - City of Lino Lakes - Pavement Management Plan Financing Repc