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Memo To: Mark Casey – City Manager From: Stacie Kvilvang - Ehlers Date: March 10, 2020 Subject: Street Reconstruction Plan and 2020 Bonding Annually the City issues 429 General Obligation assessment bonds to complete the planned street reconstruction projects. Under the 429 process the City must assess a minimum of 20% of the project costs to benefitting property owners, which typically is not an issue. For the 2020 street reconstruction improvements, the City is unable to meet the minimum assessment threshold and therefore will need to finance the project through the Street Reconstruction and Bituminous Overlay bond process instead. The City will utilize its authority to issue this type of bonds to finance the project (City has done this for projects in 2008 and 2014). Similar to the 429 Bonds, the portion of the project not being paid by assessments will be paid by a general tax levy. This authority was granted to Cities in 2002 and it generally exempts city bonds issued under a street reconstruction and overlay program from the referendum requirements usually required for bonding expenditures (referendum generally required if 20% of the project is not/cannot be assessed). The City is required to hold a public hearing on its intent to issue these bonds and its 5-year Street Reconstruction and Overlay Plan (SROP). In order to utilize this type of financing, the City has to prepare a 5-Year SROP which is presented at a public hearing to solicit comment and feedback from the community. The SROP is included in the Council’s packet for review and consideration and only includes the 2020 street reconstruction and bituminous overlay project since it is anticipated that 2021 – 2024 projects will likely be able to be financed through the typical 429 assessment process. Upon conclusion of the public hearing, the Council must approve the SROP via a two-thirds majority vote of the members present at the meeting. Although a referendum is not required, a reverse referendum is allowable. If a petition bearing the signatures of at least 5 percent of the votes cast in the last general election requesting a vote on the issuance of the bonds is received by the municipal clerk within 30 days after the public hearing, a referendum vote on the issuance of the bonds shall be called. Please contact me at 651-697-8506 with any questions. 21