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<br />..'.... <br /> <br />" , <br /> <br />EHLERS, <br /> <br />&' ASS 0 C LA T E SIN C <br /> <br />CAPITALIMPROVEMBNT PLAN BONDS <br /> <br />In 2003, the Legislature authorized a c.apital improvement bond program that applies to cities similai'to <br />that which is in current law for Counties. A new section 521 was added to Minnesota Statutes, Chapter ' <br />475 allowing municipalities to issue bonds without,a referendum under capital improvement programs <br />. (see also, Laws of Minnesota fqr 2003, Chapter 127, Article 12, Section 16). <br /> <br />Granting municipalities the authority to issue bonds under Mirinesota Statutes, Chapter 475 for capital <br />improvements without regard to election requirements ~~ them the opportunity of :financing . . <br />acquisitions and bettCrm.ents to public lands, buildings, or other improvements used as a city hall, public <br />safety, or public works facility without having to issue pure revenue bonds under a non-appropriation <br />lease with option. to purchase agreement. Conditions on the authority include approval of the issUance by <br />a 3/5th.s vote of the council membership, is part oftb.e capital improvement plan, pu.blic notice is <br />provided, is subject to reverse referendum, and is subject to the m.unicipalities net debt limit. The <br />aUthority to issue bonds is limited to the amount ofbc?nds ~ would requm;ail annual levy for debt <br />service that dOOs not exceed .05367% of taxable market value cjf allpropCrty iIi the cOtmty(there are <br />4ifferences in opfuionS among aitomeys if the market value liIDitation is applied againStthe 'county's <br />value or the City's value). <br /> <br />The'law authorizeS issuance of obligations without an election for capital improvements, if the bonds are <br />,iSsued under a 5~year capital improvement plan. To qualify for the referendum exempti9D, the f~llowing, <br />qlUllifications must be met: ' , ..' :." <br /> <br />... .... " <br />"[J The governing body must approve the capital improvement plan after a public. hearing. The <br />notice mUst be published in the offiCial newspaper at least 14 days but not more tbari 28 days ' <br />Q prior to the hearing. "The plan muSt include the following: " <br /> <br />.;' The Specific capital improvements to be construCted; <br /> <br />v' The estimatCd schedule, timing and ~, toget1;i.er with the estimstted.~ need fot the <br />impro~ement~d the sources of revenue ~ ~y for the i:mprovem~t; ~d <br /> <br />. . . . <br />v' Any planned construction of other capital improvements in the municipality over the next <br />five years... ' <br /> <br />-:- - <br /> <br />[J Approval of the bon~ issuance m. ,be niade by a 3/5thS vote of the ,gov~g body memb~~p. <br /> <br />. ' <br /> <br />p Issuance of the bonds is subject to referendum approval, if a petition signed by ~oters equal to 5% ' <br />of the voters in the last general election is filed with.the municipal clerk witliin 3()days of~e <br />public 'heariIig (if a vote is taken.and .the referendum passes, the taxes would be levied on market <br />value rather than tax capacity). ' <br /> <br />'Tb:e-capitatimprovei:nents'11lUsthavecausefuUifeMatJeasUivec-~~~.cGamitaljl.I]n'OYem~~~ <br />do not include light rail transit or related activities, parks, 4Draries, roadslbrldges, adn1inistJ:ative~' 7 <br />buildings other than city hall, or lands for those facilities. . <br /> <br />. Because the bonds are subject to the debt limits, we recommend that municipalities consult their <br />independent public financial advisor for a complete net debt ap.alysis befor.e issuing this type of debt. <br />\ <br /> <br />N:\Oeneral\TrafDing\Types ofDebt\City Capital Jmpro~CapI.1al ImprovementOverview.wpd <br />