Agenda Packets - 1987/09/14 - Laserfiche WebLink

Home Browse Search

RS-8. Ecuinment Financing (B) (cont'd In 1983, the legislature granted similar financing powers to Minnesota's home rule charter cities (M.S. 412.32), without any reverse referendum provision. However, t:e total principal amount of the certificates (or "capital notes") issued in a fiscal year is limited to no more than one -tenth of one percent of the city's assessed value that year. In many cities, this limit is prohibitively low, and effectively prevents the city from making use of the authority granted in this statute. RS-9. Interest Limits on Municipal Bonds and Special Assessment F-nanc� ing (C) The traditional way of financing most local public improvements and facilities has been through the issuance of bonds. But the public bond market is undergoing change. Changes is federal tax law will not only restrict local authorities in their r-ility to issue some bonds, but for the first time could subject the interest earned on municipal bonds to an alternative minimum tax. As a result, interest rates may �. have to be higher for the public sector to compete with private investments in the taxable bond market. In addition, artificial ceilings on bond interest rates do not hold down interest rates and may, in fact, add somewhat to the costs of bond issuance by the creation of additional legal and procedural requirements. Interest rates in the bond market fluctuate in response to a combination of economic forces. Local officials must operate within the realities of such a market. Whether or not there is a statutory ceiling, local officials have every incentive to keep issuance costs as low as possible. RS-10. License Fees With few e::ceptions, the statutes granting authority to issue licenses or permits do not specify maximum fees. Cities should have the discretion to set fees based on their own costs, needs and standards. Case law provides ample limitations on cities' power to set license - 59-