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<br />City of Gem Lake Comprehensive Plan GEMLK 140643 <br />Page 104 <br />14.5.2 Funding Sources <br />A number of funding sources are available or can be made available to municipalities. <br />Some have specific requirements or limits. Increasingly, creative financing approaches <br />are being undertaken which leverage private or public funds and/or engage partnerships <br />with private business of other government entities. Some investment and debt funding <br />sources for public capital investments include: <br />14.5.2.1 General Fund <br />General property tax dollars and fees make up the broad category general funds. <br />14.5.2.2 Enterprise Funds <br />Water and sewer utilities usually operate as an “enterprise” account that collects more <br />than is spent for services purchased. The extra funds are kept in a separate account that <br />is used for operation, maintenance and upgrades of the supported system. A one-time <br />initial installation charge is also collected from each connection made to the sewer or <br />water system. This charge is called a Sewer Availability Charge (SAC) or water <br />availability charge (WAC), and is usually used to expand capabilities. <br />14.5.2.3 General Obligation Bonds <br />Certificates of indebtedness paid for by a property tax levy, backed by the property <br />values of the city and authorized by the voters or by statutory provision. <br />14.5.2.4 Revenue Bonds <br />Bonds supported by the specific revenue stream of the specific investment (i.e. fees <br />collected for an ice arena). <br />14.5.2.5 Tax Increment Financing <br />This revenue source is the captured increased property value resulting from the <br />investment, which would not have occurred without the public financial assistance. This <br />revenue is specifically pledged to qualified improvements for a specified period of time. <br />Debt financing is not mandatory and the income stream could be used to pay investors or <br />lenders on a periodic or annual basis. Tax increment bonds are generally backed by the <br />full faith and credit of the City and its taxpayers. <br />The legislature has continued to reduce the flexibility of this tool in response of a limited <br />number of practices that have been considered objectionable. Changing of tax rates for <br />commercial properties at the state level also has significant impact on revenue <br />projections. The City of Gem Lake currently does not currently have any tax increment <br />financing districts. <br />14.5.2.6 Special Assessment Bonds <br />Revenues are derived from the specially benefited property served by the improvement. <br />14.5.2.7 Capital Improvement Reserve Funds <br />Special assessments are required to be satisfied when property ownership is transferred. <br />The result is that advance payment of special assessments in reserve produces <br />additional earnings until they are applied to the bond payment schedule. These funds can <br />be used to restructure debt or to be used for capital investments.