06/22/2005 Council Packet - Laserfiche WebLink

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June 20, 2005 Mayor John Bergeson and City Council Mr. Gordon Heitke, City Administrator 600 Town Center Parkway Lino Lakes, MN 55014 -1182 RE: LINO LAKES YMCA PROJECT FINANCING Background and History The City of Lino Lakes has made commitments to the YMCA in order to assist in constructing a new recreational facility. This commitment includes $1.5 million in project financing and approximately $500,000 in and donation. In an earlier report presented by Springsted to the City in March and July 1999, the commitment was suggested to be fulfilled by having the City donate the land, fund the infrastructure improvements from the utility fund, provide cash of $500,000 from funds on hand as well as $1,000,000 lease revenue bond issued through the EDA to provide a $1,500,000 total cash contribution. The lease revenue bonds would be repaid from a tax levy against all property in the City. It was anticipated that the required tax levy, an average of $93,000 per year, would not substantially increase individual property taxes as the consistent growth in the City would offset the need to increase the tax rate to fund this additional levy amount. The principle reason to limit the size of this issue was to preserve the City's net debt limit equal to 2% of market value. If the issue increased to a level above $1 million, the entire issue would count against that limit. If the bond issue is $1 million or less, it would not count against the limit. Current Situation The expected shared participation for the $7,500,000 YMCA project is as follows: Cash from YMCA $3,000,000 To be financed by YMCA $2,500,000 City portion to be financed $1,500,000 Land donated by City $ 500,000 Total $7,500,000