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1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />Funding Method <br />Advantages <br />Disadvantages <br />• <br />Unreliable source of revenue. <br />• <br />Increase administrative costs <br />for securing and managing the <br />funds. <br />• <br />Most often grants require cost <br />sharing and thus additional <br />Grants <br />• <br />Reduce cost burden to residents in <br />the community. <br />funding sources. This results <br />in double administrative costs <br />due to management of several <br />funding sources. <br />• <br />Limited availability on an <br />irregular schedule. <br />• <br />Requires considerable lead - <br />time from application to <br />receiving funds. <br />• <br />Do not need to prove benefit from <br />• <br />No flexibility in application of <br />Special Tax <br />the improvement. <br />tax. <br />• <br />Tax exempt properties not <br />District <br />• <br />All taxable property in district <br />subject to tax. <br />pays. <br />• <br />Legal issues are complex. <br />2.1 Ad Valorem Taxes <br />Ad valorem taxes, or general taxation, is the most common revenue source <br />used to finance government services, including minor maintenance measures <br />for drainage and water quality facilities. Using property taxes has the effect <br />of spreading the cost over the entire tax base of a community. <br />2.2 Special Assessments (Fifield, 1997) <br />Minnesota Statutes, Chapter 429, conveys the authority to undertake and <br />finance public improvements. Section 429.021 gives the power to "convey <br />the authority to undertake and to finance a wide range of public <br />improvements, andspecifically gives the power to ": <br />.... acquire, develop, construct, reconstruct, extend, and maintain <br />storm and sanitary sewers and systems, including outlets, holding <br />areas and ponds, treatment plants, pumps, lift stations, service <br />connections, and other appurtenances of a sewer system, within and <br />without the corporate limits." <br />Special assessments are the most common tool for financing public <br />improvements, All or a portion of the cost of an improvement is levied <br />against properties benefited by the improvement. <br />The issue of benefit poses the greatest challenge in the use of special <br />assessments. The amount of the special assessment cannot exceed the benefit <br />received by the property from the improvement. The benefit is measured by <br />the increase in the market value of the property. As noted earlier, the direct <br />benefits of a storm water management system may not be equally distributed <br />in a given area. <br />Feasibility Study A- LINOL0602.00 <br />City of Lino Lakes, Minnesota Page 7 <br />