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23 Relative Costs and Benefits of Alternative Uses of the Funds Refunding of the Series 2003 Bonds is expected to produce cost savings, which may free up revenues for alternative uses. Operating Costs of the Proposed Improvements The proposed refunding of the Series 2003 Bonds would reduce operating costs of the Building, to the extent current lease payments are converted to lower CIP Bond debt service payments. In other respects, no changes to operating costs are expected under this CIP. Options for Shared Facilities with Other Cities or Local Government Sharing either the public works facility or the fire station with another community is not an option. For the fire station, the provision of fire services relies on immediate response times in emergencies and having a shared facility outside of the community would seriously jeopardize response times and public safety. For the public works facility, the City needs adequate space to store their trucks and vehicles as well as have a facility to complete maintenance on them. In addition, all of the surrounding communities have their own facilities for both fire and public works. V. FINANCING THE CAPITAL IMPROVEMENT PLAN The total principal amount of requested expenditures under this Capital Improvement Plan is up to $4,000,000. This amount represents the maximum principal amount of CIP Bonds that may be issued to refund the Series 2003 Bonds. Principal and interest on the CIP Bonds will be paid through a tax levy over the term of the CIP Bonds, further described in Appendix A. In the financing of the Capital Improvement Plan, two significant statutory limitations apply. 1. Under Chapter 475, with few exceptions, municipalities cannot incur debt in excess of 3% of the assessor's taxable market value for the municipality. In the City, the taxable market value is $777,784,100. Therefore, the total amount of outstanding debt cannot exceed $23,333,523. These values are for 2010/11 tax year. As of October 31, 2011, the City has $7,195,000 subject to the legal debt limit (this amount includes the 2003 Bonds that are being refunded). As such, issuance of the CIP Bonds will be within the overall statutory debt limit for the City, whether the Bonds are issued as a current or advanced refunding. 2. A separate limitation under the CIP Act is that, without referendum, the total amount of principal and interest in any one year on all CIP Bonds issued by the City debt cannot exceed 0.16% of the total taxable market value in the municipality. In the City, that maximum annual debt service amount is City of St. Anthony 2011-2015 Capital Improvement Plan Page 6