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