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Proposed Additions to Municipal Policy and Legislative Proposals <br /> of the League of Minnesota Municipalities <br /> Each item should be voted on separately on the enclosed postcard ballot. • <br /> State Guarantee of Local Bond Issues, An unduly large percentage of Minnesota <br /> municipalities have bond ratings which result in interest rates approaching <br /> legal limits and which make their obligations generally ineligible for the <br /> portfolios of banking institutions. The League recommends legislation which <br /> would place the full faith and credit of the state behind the general <br /> obligation bond issues of all local government units. Such a program would <br /> be an effective and immediate means of alleviating the situation. In order <br /> to pay any delinquencies or defaults, an insurance fund should be created <br /> and financed by a uniform assessment not to exceed 1% of the particular bond <br /> issue, against those issuers of bonds, who wish the state to guarantee their <br /> obligations. <br /> Short-term Financing. Minnesota municipalities are severely hampered by <br /> limited means of short-term borrowing. Presently available alternatives <br /> lack flexibility and are otherwise restricted as to use and manner of <br /> issue. The League recommends legislation which would authorize municipalities <br /> to establish limited lines of credit with banks whereby local units could <br /> directly borrow amounts for a period of up to three years without voter <br /> approval, except where the amount exceeds one per cent of the assessed <br /> valuation of the municipality, in which case a referendum would be required <br /> upon filing of a requisite petition. <br /> ral <br /> 11/18/70 <br />