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Section 3 <br /> EXISTING DEBT LEVELS AND DEBT CAPACITIES <br /> Review of Current Debt Levels and Debt Capacities <br /> In Minnesota, the authority to issue municipal bonds is found in Minnesota Statutes, <br /> Chapter 475. Municipalities, except cities of the first class and school districts, may not incur <br /> debt in excess of 2% of the market value of taxable property in the municipality. The limit is <br /> 10% in first class cities and school districts. Subtracted from this overall 2% limit are almost all <br /> debt obligations for which some other source of revenue is pledged as security. Thus, <br /> improvement bonds, tax increment bonds, utility revenue bonds, pure revenue bonds, and <br /> similar bonds may be issued without regard to the debt limit. The result is that, with only a few <br /> exceptions, the only types of obligations subject to the debt limit are general obligation bonds <br /> payable solely from ad valorem property taxes. The legal debt limit has nothing to do with the <br /> practical debt limit of a municipality which is the debt burden beyond which the creditworthiness <br /> of the municipality is put in question. <br /> The City <br /> As stated above, municipalities may incur net debt equal to 2% of Estimated Market Value. The <br /> City's gross bonding capacity is computed as follows: <br /> Estimated Market Value $335,789,300 <br /> X 2% X 0.02 <br /> Total Gross Bonding Capacity $ 6,715,786 <br /> Less: Outstanding Debt Subject to the Limit 0 <br /> Debt Margin $ 6,715,786 <br /> The City of St. Anthony's current debt outstanding is listed in Appendix A. None of the current <br /> debt outstanding falls under the statutory bonding limit. <br /> The District <br /> As stated above, school districts may incur net debt equal to 10% of their Indicated Market <br /> Value. The Indicated Market Value is determined by dividing the County Assessor's Estimated <br /> Market Value by the Sales Ratio determined for the District each year by the State Department <br /> of Revenue. The following is the District's gross bonding capacity computation: <br /> Assessors Estimated Market Value $426,240,500 <br /> Divided by the Sales Ratio 92.7% <br /> Indicated Market Value $459,806,365 <br /> X 10% X 0.10 <br /> Gross Bonded Debt Capacity $ 45,980,636 <br /> Current Debt Outstanding(a) 5.705.000 <br /> Remaining Capacity $ 40,275,635 <br /> (a) The District's current outstanding debt is listed in Appendix A. <br /> ®SPRINGSTED \stanthoTtxi Page 3-1 <br />