06/01/2009 Council Packet - Laserfiche WebLink

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use of special service districts. This legislation is currently scheduled to sunset in 2009. A special service district provides a means to levy taxes (service charge) and provide improvements and service to a commercial area. Housing Improvement Area The City has the power to establish a special taxing district to make improvements in areas of owner - occupied housing (Minnesota Statutes, Sections 428A.11 through 428A.21). The housing improvement area is similar in concept to the special service district. It is a special taxing district that can be used to finance a variety of improvements. Utility Revenues The city operates three municipal utilities: water, sanitary sewer and storm water. The revenues from the operation of these utilities are available to pay for capital improvements in support of community development initiatives. State Law (Minnesota Statutes, Section 444.075) gives the authority to pledge these revenues to general obligation bonds for utility system improvements. Street State Aid The city receives state aid for the construction and maintenance of the local streets. This aid can only be used for streets designated for inclusion in the local state aid street system. These revenues can also be pledged to pay debt service on bonds issued for the construction and maintenance of state aid streets (M.S. 162.18). Street Reconstruction A relatively new municipal power is the ability to issue bonds to finance street reconstruction projects (M.S. 475.58). To use this authority, the streets to be reconstructed must be part of a "street reconstruction plan" that describes the streets to be reconstructed, the estimated costs, and any planned reconstruction of other city streets over the next five years. The issuance of the bonds must be approved by a vote of all of the members of the governing body following a public hearing. The issuance is subject to a reverse referendum provision. The city must hold an election prior to issuance if petitioned by voters within 30 days of the public hearing. Unlike most municipal debt, these bonds are subject to the debt limit. Lease Revenue Bonds Public buildings can be financed through the issuance of lease revenue bonds. This tool combines two pieces of statutory authority. A housing and redevelopment authority (or EDA using these powers) has the ability to issue revenue bonds to finance projects pursuant to a redevelopment plan. These projects can include the construction of public buildings. Most HRAs do not, however, have sufficient revenues to secure these bonds. A city can provide this revenue through a lease 5 -23 Adjacent Community Review Draft 11/2008 purchase agreement with the HRA. The authority for the lease comes from Minnesota Statutes, Section 465.71. Capital Improvement Bonds Capital improvement bonds are the newest capital finance power for Minnesota cities. This authority was granted by the State Legislature in 2003. Through this authority, the City can issue bonds to finance the acquisition or betterment of a city hall, a public safety facility, or a public works facility. The statute does not define the precise nature of public safety or public works facilities. This debt authority is subject to several procedural requirements and limitations. Source: Draft 2030 Comprehensive Plan • • •