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1 <br />■ Available Funding Sources 24 <br />:4) <br />1 <br />1 <br />a <br />The municipal state aid funds received by cities are divided into two allotments, <br />a construction allotment and a maintenance allotment. The maintenance <br />allotment cannot exceed 35 percent of the cities total state aid funds in any year <br />and must be used for the maintenance of the city's municipal state aid street <br />system. The City has historically appropriated its maintenance allotment to the <br />General Fund for maintenance purposes. Maintenance allotments can also be <br />appropriated to pay the interest due on municipal state aid bonds. <br />The construction allotment must be used for the construction or the <br />reconstruction of the City's municipal state aid street system to established <br />standards. Cities receive their construction allotment only after a contract has <br />been awarded for the construction of a street on the state -aid system. Cities do <br />not receive any interest on unspent construction allotments. <br />Construction allotments can also be used to pay the principal due on municipal <br />state aid bonds. A city may issue municipal state aid bonds to finance <br />construction of their state aid system; however, the average annual amount of <br />principal and interest due in any subsequent calendar year on bonds sold by the <br />city including any similar obligations outstanding cannot exceed 50 percent of <br />their last annual construction allotment preceding the bond issue. For example, <br />if the City received an annual M.S.A. construction allotment of $100,000 the <br />average annual debt service payments for all outstanding M.S.A. bonds in <br />future years could not exceed $50,000. <br />The municipal state aid rules allow cities, subject to MN D.O.T. approval, to <br />request advanced funding for municipal state aid eligible projects from any <br />municipal state aid funds available provided that the amount of the advances do <br />not exceed the city's total estimated apportionment for the three years following <br />the advance. The City has currently advanced all of its MSA funds through <br />2008. <br />Springsted - 193- <br />City of Lino Lakes - Pavement Management Plan Financing Repo <br />