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HomeMy WebLinkAbout[05a] Public Hearing - 2009 GO Capital Improvement BondT+lt MEETING DATE: June 4, 2009 Council Agenda Item 5 a AGENDA ITEM: Public Hearing - 2009 GO Capital Improvement Bond SUBMITTED BY: Administration/Finance BOARD/COMMISSION/COMMITTEE RECOMMENDATION: None PREVIOUS COUNCIL ACTION: None BACKGROUND INFORMATION: As part of the debt management study prepared by Monte Eastvold, is was determined the 2003 Public Projects Revenue Bonds for the public works facility was a candidate to refund into a General Obligation Capital Improvement Bond on the call date of December 1, 2009. The process for issuing GO Capital Improvement Bonds is different than issuing GO Special Assessment Bonds. As St. Joseph has not issued Capital Improvement Bonds the regulating statute has been provided for your information. The bonds for the Maintenance Facility were originally issued through the EDA utilizing Public Project Revenue Bonds. At the time the facility was constructed the only means of bonding for the facility without an election was through Public Project Revenue Bonds. Since these bonds are issued through the EDA, the City has a lease for the facility with the EDA and technically the City pays rent for the facility. These bonds carry a slightly higher interest rate. As stated at the last Council meeting, the City now has an opportunity to fund public facilities through Capital Improvement Bonds. Staff has worked with Bond Counsel to prepare the necessary documents and the Capital Improvement Plan is based on the template provided by Counsel. The hearing for the CIP is on the Maintenance Facility as that is what is being refunded. Minnesota statutes require a 5-year capital improvement plan for CIP bonds. A public hearing is required to implement the CIP. The plan presented meets statute requirements. The debt schedule presented in the plan is an estimation based on today's market. The annual payments and interest savings will be updated to current when the debt is issued (August 2009). As stated above, since the facility is leased from the EDA, staff will work with the EDA to complete the process to terminate the lease and receive ownership of the facility. BUDGET/FISCAL IMPACT: Estimated interest savings of $13,441.27 ATTACHMENTS: - Five-Year Capital Improvement Plan - Summary Refunding Bond Schedule - 20096 GO CIP Bonds - Resolution giving preliminary approval for the issuance of GO Capital Improvement Plan Bonds in an amount not to exceed $520,000 and adopting the City of St. Joseph, Minnesota Capital Improvement Plan Minnesota Statute 475.521 REQUESTED COUNCIL ACTION: Adopt the resolution 2009-013 giving preliminary approval of the issuance of the GO CIP bonds and adopting the five-year CIP plan. CITY OF ST. OSFPH 1 www.cityof stjoseph.com Public Hearing City of St. Joseph The St. Joseph City Council shall conduct a public hearing on Thursday, June 4, 2009 at 7:00 PM Administrator at the St. Joseph City Hall. The purpose of the hearing is to issue the 20096 capital improvement ~udy ~Ueyrens bonds in an amount not to exceed $520,000 and adopt a capital improvement plan for the public works facility. Mayor All persons wishing to be heard will be heard with oral testimony limited to 5 minutes. Written testimony may be submitted to the City Administrator, City of St. Joseph, PO Box 668, St. AI Rassier Joseph, MN 56374. Councilors Judy Weyrens Steve Frank Administrator/Clerk Bob Loso Renee Symanietz Dale Wick zs College Avenue North PO Box 668 Saint ~oseph, Minnesota 56374 phone 3zo.363.7zoi Fax 3zo.363.o34z ~:p~,~j ~;t~ ~~. ~~?~,~~~3~~; 1~~br~r~~t~~~c~~~~ eft, !~ ~:~i~~ t~~+ ~~r..l[~~h,~~ti Five-Year Capital Improvement Plan f~r~~~rr~~cf ~yj - Lari Bcrrtl~t~, ~ir~ar~cP L7ir~~tor { .. 2009-2013 DRAFT Table of Contents I. Introduction .............................................................................................................................2 II. Purpose .....................................................................................................................................2 III. The Capital Improvement Planning Process ........................................................................3 IV. Project Summary ........................................................................... .....3 ..................................... V. Financing the Capital Improvement Plan .............................................................................5 Project Costs ...........................................................................................................Appendix A Proposed CIP Bond Issues .....................................................................................Appendix B Pre-Sale Schedule ...................................................................................................Appendix C c:\documents and settings\jweyrens\local settings\temporary Internet files~content.outlook~cfZnigb6~pw bldg cip09-13.docx Page 1 DRAFT CITY OF ST. JOSEPH FIVE-YEAR CAPITAL IMPROVEMENT PLAN 2009 THROUGH 2013 INTRODUCTION In 2003, the Minnesota State Legislature adopted a statute that generally exempts City bonds issued under a capital improvement program from the referendum requirements usually required for city halls, libraries, public works and public safety facilities. PURPOSE A capital improvement is a major expenditure of City funds for the acquisition or betterment to public lands, buildings, or other improvements used as a city hall, libraries, public safety, or public works facility, which has a useful life of five years or more. For the purposes of Minnesota Statutes, Section 475.521, capital improvements do not include light rail transit or related activities, parks, road/bridges, administrative buildings other than city hall, or land for those facilities. However, this plan includes certain additional capital improvements beyond the scope of this statute. A Capital Improvement Plan (CIP) is a document designed to anticipate capital improvement expenditures and schedule them over afive-year period so that they may be purchased in a most efficient and cost effective method possible. A CIP allows the matching of expenditures with anticipated income. As potential expenditures are reviewed, the City considers the benefits, costs, alternatives and impact on operating expenditures. The City of St. Joseph, Minnesota (the "City") believes the capital improvement process is an important element of responsible fiscal management. Major capital expenditures can be anticipated and coordinated so as to minimize potentially adverse financial impacts caused by the timing and magnitude of capital outlays. This coordination of capital expenditures is important to the City in achieving its goals of adequate physical assets and sound fiscal management. In these financially difficult times, good planning is essential for the wise use of limited financial resources. The CIP is designed to be updated on an annual basis. In this manner, it becomes an ongoing fiscal planning tool that continually anticipates future capital expenditures and funding sources. c:\documents and settings\jweyrens\local settings\temporary Internet files\content.outlook\cfZnigb6\pw bldg cip09-13.docx Page 2 DRAFT III. THE CAPITAL IMPROVEMENT PLANNING PROCESS The capital improvement planning process is as follows: the City Council authorizes the preparation of the CIP. City staff is instructed to assemble the capital expenditures to be undertaken within the next five years. The City Council then reviews the expenditures according to their priority, fiscal impact, and available funding. From this information, a preliminary capital improvement plan is prepared, A public hearing is held to solicit input and a final project list is established. The City Council prepares a plan based on the available funding sources. If general obligation bonding is necessary, the City works with its financial advisor to prepare a bond sale and repayment schedule. Over the life of the CIP, once the funding, including proceeds from the bond sales, becomes available the individual capital expenditures can be made. In subsequent years, the process is repeated as expenditures are completed and new needs arise. Capital improvement planning looks five years into the future each year. For a City to use its authority to finance expenditures under Section 475.521, it must meet the requirements provided therein. Specifically, the City Council must approve the sale of capital improvement bonds by a three-fifth majority of its membership. In addition, it must hold a public hearing for public input. Notice of such hearing must be published in the official newspaper of the City at least fourteen, but not more than twenty-eight days prior to the date of the public hearing. In addition, the notice may be posted on the City's official Website. The City Council approves the CIP and bond issuance following the public hearing. Although a referendum is not required, a reverse referendum is allowable. If a petition bearing the signatures of at least five percent of the votes cast in the last general election requesting a vote on the issuance of bonds is received by the municipal clerk within thirty days after the public hearing, a referendum vote on the issuance of the bonds shall be called, IV. PROJECT SUMMARY The expenditures to be undertaken with this CIP are limited to those listed below. All other foreseeable capital expenditures within the City government will come through other means. The following expenditures have been submitted for inclusion in this CIP: 2009 Expenditures Acquire the public works facility. Any additional expenditures for 2009 and expenditures for 2010 through 2013 can be found in the City's existing capital improvement plan. The statute has established certain criteria that must be met. Under these criteria, the City has considered the following eight points: Condition of the City's infrastructure and need for the project. Demand for the improvement. c:\documents and settings\jweyrens\local settings\temporary Internet f1les~content.outlook~Cf2nigb6~pw bldg cip09-1.3.docx Page 3 DRAFT 3. Cost of the improvement. 4. Availability of public resources. 5. Level of overlapping debt. 6. Cost/benefits of alternative uses of funds. 7. Operating costs of the proposed improvements. 8. Options for shared facilities with other cities or local governments. The CIP is composed of a project that will allow the City to acquire the existing public works facility from the St. Joseph EDA. The City has analyzed the eight points required per statute for the project. Their findings are as follows: Project: Acquire Public Works facility from St. Joseph Economic Development Authority ("EDA"). Description: The EDA financed the construction of a new public works facility in 2003 through the issuance of $700,000 Public Project Revenue Bonds, Series 2003. The EDA currently leases the facility to the City. The amount of the lease payments is equal to the debt service payments on the Series 2003 Bonds. The City annually appropriates the funds from the City's general fund to meet the lease payments. The City intends to acquire the public works facility through the issuance of approximately $500,000 General Obligation Capital Improvement Ptan Bonds, Series 20098. The financing will refund the Series 2003 Bonds and will result in a net debt service cost savings to the City of approximately $17,662. Conditions of City Infrastructure and Need for the Project The public works facility is in very good condition as it is only six years old. The City needs to continue the operation of the public works facility. Demand for the Project The public works facility represents the only facility that includes a work area for equipment and vehicle repairs. The facility also houses most of the public works heavy equipment and vehicles. Estimated Cost of the Project The project acquisition price equals the amount necessary to refund the Series 2003 Bonds plus costs of issuance. The total new amount is estimated to be not more than $520,000. Refunding Requirement $480,000 Plus Costs of Issuance $20,000 Equals Total Par Amount $500,000 Availability of Public Resources The project will be funded by a combination of general property tax levy and available resources on hand. Relative Costs and Benefits of Alternative Uses of the Funds There are no significant alternatives for funds designated for this project. c:\documents and settings\jweyrens\local settings\temporary Internet files\content.outlook\cfZnlgb6\pw bldg cip09-13.docx Page 4 DRAFT Operating Costs of the Proposed Improvements The operating costs are reviewed annually through the City's budget cycle. Options for Shared Facilities with Other Cities or Local Governments The public works facility is owned by the City of St. Joseph. The facility is used only for the City's equipment and vehicles. Other local governments do not use the facility. Level of Overlapping Debt 2nn~/zoos 2007/?UU8 ,Net Tax Net Tax Capacity Percentage Taxpayers Capacit}~ Value Applicable Share I,~.~~~er G'ahret to Citt;t in Ci Indirect 1)eht n neht Stearns County $128,302,464 $3,664,663 2.86% $32,285,000 $ 923,351 ISD No. 742, St. Cloud 78,085,448 3,664,6b3 4,69 39,345,000 1,845,281 Stearns County HRA 87,704,336 3,664,663 4. ]8 975,000 __ _40 755 Net Indirect Debt: $ V. FINANCING THE CAPITAL IMPROVEMENT PLAN In the financing of the CIP, two statutory limitations apply. Under Chapter 475, with few exceptions, cities cannot incur debt in excess of 3% of the assessor's Taxable Market Value (TMV) for the City. In the City the TMV is $336,332,000. Therefore, the total amount of outstanding debt cannot exceed $10,089,960. As of May 1, 2009, the City had $845,000 of debt subject to the legal debt limit leaving a debt margin of approximately $9,244,960. Another limitation on bonding under the CIP Statute (475.521) is that without referendum, the total amount that can be used for principal and interest in any one year for CIP debt cannot exceed 0.16% of the TMV for the City. For the City, the limit of CIP debt is $538,131.20 ($336,332,000 x .0016). The principal and interest payments for the Series 20096 Bonds will have a maximum annual payment of approximately $67,275. Under the CIP, the City will secure approximately $500,000 in nine-year general obligation bonds in the year 2009 to finance the acquisition of the public works facility. The par amount of the Series 20098 Bond is based on the amounts listed in Appendix A. Continuation of the Capital Improvement Plan This CIP should be reviewed annually by the City Council using the process outlined in this plan. The City Council should review proposed expenditures, make priority decisions and seek funding for those expenditures they deem necessary for the City, If deemed appropriate, the City Council should prepare an update to this plan. c:\documents and settings\jweyrens\local settings\temporary internet files~content.outlook~cf'2nigb6~pw bldg cip09-13.docx Page 5 DRAFT APPENDIX A PROJECT COSTS (Capital Expenditures to be Funded with Bond Proceeds) 2009 Expenditures • Acquisition of the public works facility - $500,000. c:\documents and settings\jweyrens\local settings\temporary Internet files\COntent.outlook\cfZnigb6\pw bldg cip09-13.docx Page 6 DRAFT APPENDIX B Proposed Debt Service Schedule Date Principal Coupon interest Totai P+I Fisca! Tota! 09/03/2009 - - - - - 06/01I2010 - - 10,065.00 10,065.00 - 12/01/2010 50,000.00 1.350% 6,710.00 56,710.00 66,775.00 06!01/2011 - - 6,372.50 6,372.50 - 12/01l2011 50,000.00 2.000% 6,372.50 56,372.50 62,745.00 Ofi/01l2012 ----- - _ ----- --- - - - 5,872.50 - - __ 5,872.50 - 12101/2012 55,000.00 2.000% 5,872.50 60,872.50 6fi,745.00 06!01/2013 - - 5,322.50 5,322.50 - 12/01J2013 55,000.00 2.600% 5,322.50 60,322.50 65,645.00 06/01/2014 - - 4,607.50 4,607.50 - 12/01/2014 55,000.00 2.600% 4,607.50 59,607.50 64,215,00 06/01!2015 - - 3,892.50 3,892.50 - 12101/2015 55,000.00 3.100% 3,892.50 58,892.50 62,785.00 06/01/2016 - - 3,040.00 3,040.00 - 12/01/2016 55,000.00 3.100% 3,040.00 58,040.00 61,080.00 06/01/2017 - - 2,187.50 2,187.50 - 12/01/2017 60,000.00 3.500% 2,187.50 62,187.50 64,375.00 06/01/2018 - - - 1,137.50 1,137.50 -- -- - - 12/01/2018 65,000.00 3.500% 1,137.50 66,137.50 67,275.00 Total $500,000.00 - $81,640.00 $581,640.00 - c;\documents and settings\jweyrens\local settings\temporary internet files~COntent.outlook~CfZnigb6~pw bldg cip09-13.docx Page 7 DRAFT APPENDIX C Proposed Five-Year City Capital Improvement Plan/Bond Issuance City of St. Joseph, Minnesota The City Council must take the following actions before bonds can be issued: City Council authorizes the preparation of a five-year Capital Improvement Plan City Council conducts a public hearing on the issuance of bonds and the Capital Improvement Plan City Council approves the bonds and Capital Improvement Plan by at least athree-fifths vote of the Council membership The table below lists the steps in issuing process: August 2008 City Council authorizes staff to prepare afive-year Capital Improvement Plan May 21, 2009 Close date to get Notice of Public Hearing on the issuance of the Series 20096 Bonds and the Capital Improvement Plan May 22, 2009 Publish Notice of Public Hearing on the issuance of the Series 20096 Bonds and the Capital Improvement Plan June 4, 2009 City Council holds a public hearing on the Series 20096 Bonds and the Capital Improvement Plan. City Council provides preliminary approval for the bond issuance and approves CIP by at least athree-fifths vote of the Council membership. July 3, 2009 Reverse referendum period ends August 6, 2009 City Council accepts offer for the Series 20096 Bonds and adopts a resolution approving the sale of the Series 20096 Bonds September Bond closing/receipt of funds c:\documents and settings\jweyrens\local settings\temporary Internet files~content.outlook~Cf2nigb6~pw bldg cip09-13.docx Page 8 I_ Preliminary City of Saint Joseph, Minnesota G.O. Refunding Bonds of 2009 {Assumes S&P A Rates) 2003 Refunding Summary Dated 09/01/2009 ~ Delivered 09!03/2009 Sources Of Funds Par Amount of Bonds $500,000.00 Accrued Interest from 09/01/2009 to 09/03/2009 74.56 Tole) Sourcea $500,074.56 Uses Of Funds Deposit to Current Refunding Fund 479 414.42 Total Underwriter's Discount (2.250%) 11,250.00 Costs of Issuance 7,500.00 i Rounding Amount 1 835.58 Deposit to Debt Service Fund 74.E , Total Uses S50Q074.56 Flow of Funds Detail State and Local Government Series (BEGS) rates for Date of OMP Candidates Curtent Refunding Estxow Solution Method Nat Funded Total Cost of Investments $479,414.42 Interest Earnings @ 0.500°~ 565.58 Total Draws $480,000.00 Issues Refunded And all Dates 03o1d 1 PV Analysis Summary (Net to Net)' Net PV Cashflow Savings ~ 2.988°k(Bond Yield) 13 441.27 Accrued interest Credit to Debt Service Fund 74.56 Contingency or Rounding Amount 1 835.58 Net Present Value Benefit $15,351.41 Net PV Benefit! $480,000 Refunded Principal 3.198% Net PV Benefit / $500,000 Refunding Principal 3.070°k Bond Statistics Average Life 5.430 Years _ Average Coupon ~~ 3.OOti9982% Net Interesi Cost (NIC) 3.4213628°~ Bond Yield for Arbitrage Purposes ~~---~~----~ 2.9884506% True Interest Cost (TIC) 3.4530397% AA Inclusive Cost LAIC) 3.7710307% 03re! I SINGLE PURPOSE 1 5/20/2009 1 10:11 AM Northland Securities P~ ~hlic Finanr•o e.._ . w~^~ ~f sM mo=d ..y.. . Preliminary ' City of Saint Joseph, Minnesota I ~ G.O. Refunding Bonds of 2009 (Assumes S&P A Rates) 2003 I Debt Service Comparison Date Total P+1 Existing D!S et New D Old Net D Sa vings 12/01/2009 - 51,391.25 ! 49,481,11 51,391.25 ~ ~ 1,g'i0.14 12/01/2010 66,775.00 - 66,775.00 66,342.50 {432.50) 12/01/2011 62,745.00 - 62,745.00 64,655.00 1,910.00 12/01/2012 66,745.00 - 66,745.00 67,855.00 1,110.00 12/01/2013 65,645.00 - 65,645.00 65,805.00 160.00 92/01/2014 64,215.00 - 64,215.00 68,655.00 4,440.00 12!01!2015 62,785.00 - 62,785.00 66,180.00 3,395.00 12/01/2016 61,080.00 - 61,080.00 63,650.00 2,570.00 12!0112017 64,375.00 - 64,375.00 66,065.00 1,690.00 12/01/2018 67,275.00 - 67,275.00 68,185.00 910.00 Total $581,640.00 $51,391.25 5631,121.11 $648,783.75 $17,662. PV Analysis Summary (Net to Net) Gross PV Debt Service Savings ..................... 13441.27 Net PV Cashflow Savings @ 2.988°~(Bond Wield)..... 13 441.27 Accrued Interest Credit to Debt Service Fund...... 74.56 Contingency or Rounding Amount .................... 1 835.58 Net Present Value Benefit $15,351.41 Net PV Benefit / $513,615.83 PV Refunded Debt Service 2.989% Net PV Benefit / 3480,000 Refunded Principal... 3.198% Net PV Benefit / 3500,000 Refunding Principal.. 3.070% Refunding Bond Information Refunding Dated Date 9/01/2009 Refunding Delivery Date g/p3/20pg D3ref I SINGLE PURPOSE i 5!20/2009 11D:17 AM Northland Securities Public Finance Page 2 Preliminary City of Saint Jose h M' e unding Bonds of 2009 (Assumes S&P A Rates) 2003 Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Iota! 09!03/2009 - - _ _ 06/01/2010 - - 10,065.00 10,065.00 - 12/01/2010 50,000.00 1.350% 6,710.00 56,710.00 66,775.00 i 06/01/2011 - - 6,372.50 6,372.50 - 12/0112011 50,000.DO 2.000°k fi,372.50 56.372.50 62,745.00 06/01/2012 - - 5,872.50 5,872.50 - i 12/01/2012 55,000.00 2.000°~ 5,872.50 60,872.50 66,745.00 06/01/2013 - - 5,322.50 5,322.50 - 12/01/2013 55,D00.00 2.600% 5.322.50 60,322.50 65,645.00 '~ O6/01/2014 - - 4,607.50 4,607.50 - ', 12/01/2014 55,000.00 2.600% 4,607.50 59,607.50 64,215.00 '~ 06/01/2015 - 3,892.50 3,892.50 - '~ 12/01/2015 55,000.00 3.100% 3,892.50 58,892.50 62,785.00 06/01/2016 - - 3,040.00 3,040.00 - 12/01/2016 55,000.00 3.100% 3,040.00 58,040.00 61,080.00 06/01/2017 - - 2,187.50 2,187.50 - 12/01/2017 60,000.00 3.500% 2,187.50 62,187.50 64,375.00 06/01/2018 - 1,137.50 1,137.50 - 12l01l2018 65,000.00 3.500°/0 1,137.50 66,137.50 67,275.00 Total 5500,000.00 - 581,840.00 5581,640.00 - Dated 9/01/2009 Delivery Date 9/03!2009 First Coupon Date 6/01/2010 First available call date Call Price _ Accrued Interest from 09/01/2009 to 09!03/2009 74.56 Bond Year Dollars $2,715.00 Average Llfe 5.430 Years Average Coupon 3.OO6gg82% Net Interest Cost (NIC) 3.4213625°k True Interest Cost (TIC) 3.4530397% Bond Yield for Arbitrage Purposes 2.9884506°k Net Interest Cost 3.0073288% Weighted Average Maturity 5.424 Years 03ref I SINGLE PURPOSE J S1zon(ro9 110:11 AM Northland Securities Public Finance Paste 3 ~i Preliminary Minnesota Lease Revenue Bonds of 2003 Debt Service To Maturity And To Ca11 Refunded Date Bonds D/S To Call Principal Coupon Interest Refunded DIS Fisca! Total 09/03/2009 - - - - - - - 12/01/2009 480,000.00 480,000.00 - 3.600°~ - - 06101l2010 - - - - 10,671.25 10,671.25 - 12/01/2010 - - 45,000.00 3.750% 10,671.25 55,671.25 66,342.50 08/01/2011 - - - - 9,827.50 9,827.50 - 12/01/2011 - - 45,000.00 4.000% 9,627.50 54,827.50 64,655.00 06/01/2012 - - - - 8,927.50 8,927.50 - 12101/2012 - - 50,000.00 4.100% 8,927.50 58,927.50 67,855.00 06/01/2013 - - - - 7,902.50 7,902.50 - 12/01/2013 - - 50,000.00 4.300% 7,902.50 57,902.50 65,805.00 06/01/2014 - - - - 6,827.50 6,827.50 - 12/01/2014 - - 55,000.00 4.500% 6,827.50 61,827.50 68,655.00 06/01/2015 - - - - 5,590.00 5,590.00 - 12/01/2015 - - 55,000.00 4.800% 5,590.00 60,590.00 66,180.00 06/01/2016 - - - - 4,325.00 4,325.00 - 12/0112016 - - 55,000.00 4.700% 4,325.00 59,325.00 63,650.00 06/01/2017 - - - - 3,032.50 3,032.50 - 12/01/2017 - - 60,000.00 4.800°k 3,032.50 63,032.50 66,065.00 06/01/2018 - - - - 1,592.50 1,592.50 - 12/01/2018 - - 65,000.00 4.900°k 1,592.5D 66,592.50 68,185.00 Total S480,000.00 5480,000.00 5480,DOD.00 - 5117,392.50 5597,392.50 - Yield Statistics Average Life 5.542 Years Weighted Average Maturity (Par Basis) 5.536 Years Average Coupon 4.4132519°ib Refunding Sond information Refunding Deted Date 9/01/2009 Refunding Delivery Date 9103!2009 03o1d I SINGLE PURPOSE 15/20/1009 (10:11 AM Northland Securities Public Finance Page a 475.521, Minnesota Statutes 2007 Page 1 of 2 Minnesota Legislature Home I Links to the World ~ Help ~ Advanced Search Office of the Revisor of Statutes ~~ ~~~~. House ~ Senate ~ Joint Departments and Commissions ~ Bill Search and Status ~ Statutes, Laws, and Rules Minnesota Statutes Table of Chapters Chapter 475 Table of Contents 475.521, Minnesota Statutes 2007 Copyright ©2007 by the Office of Revisor of Statutes, State of Minnesota. 475.521 CAPITAL IMPROVEMENT BONDS. Subdivision 1. Definitions. For purposes of this section, the following terms have the meanings given. (a) "Bonds" mean an obligation defined under section ~17~.~ I . (b) "Capital improvement" means acquisition or betterment of public lands, buildings or other improvements for the purpose of a city hall, town hall, library, public safety facility, and public works facility. An improvement must have an expected useful life of five years or more to qualify. Capital improvement does not include light rail transit or any activity related to it, or a park, road, bridge, administrative building other than a city or town hall, or land for any of those facilities. (c) "Municipality" means a home rule charter or statutory city or a town described in section 368.01. subdi~~ision I or la. Subd. 2. Election requirement. (a) Bonds issued by a municipality to finance capital improvements under an approved capital improvements plan are not subject to the election requirements of section ~47~.~R. The bonds must be approved by an affirmative vote of three-fifths of the members of afive-member governing body. In the case of a governing body having more or less than five members, the bonds must be approved by a vote of at least two-thirds of the members of the governing body. (b) Before the issuance of bonds qualifying under this section, the municipality must publish a notice of its intention to issue the bonds and the date and time of the hearing to obtain public comment on the matter. The notice must be published in the official newspaper of the municipality or in a newspaper of general circulation in the municipality. Additionally, the notice may be posted on the official Web site, if any, of the municipality. The notice must be published at least 14 but not more than 28 days before the date of the hearing. (c) A municipality may issue the bonds only after obtaining the approval of a majority of the voters voting on the question of issuing the obligations, if a petition requesting a vote on the issuance is signed by voters equal to five percent of the votes cast in the municipality in the last general election and is filed with the clerk within 30 days after the public hearing. The commissioner of revenue shall prepare a suggested form of the question to be presented at the election. Subd. 3. Capital improvement plan. (a) A municipality may adopt a capital improvement plan. The plan must cover at least afive-year period beginning with the date of its adoption. The plan must set forth the estimated schedule, timing, and details of specific capital improvements by year, together with the estimated cost, the need for the improvement, and sources of revenue to pay for the improvement. In preparing the capital improvement plan, the governing body must consider for each project and for the overall plan: (1) the condition of the municipality's existing infrastructure, including the projected need for repair or replacement; (2) the likely demand for the improvement; (3) the estimated cost of the improvement; (4) the available public resources; (5) the level of overlapping debt in the municipality; (6) the relative benefits and costs of alternative uses of the funds; (7) operating costs of the proposed improvements; and https://www.revisor.lea.state.mn.us/bin/aetDUb.nhn?nubtvne=STAY CHAP SF,(',Xwear=c.. 5/~.9/~~09 475.521, Minnesota Statutes 2007 (8) alternatives for providing services most efficiently through shared facilities with other municipalities or local government units. (b) The capita] improvement plan and annual amendments to it must be approved by the governing body after public hearing. Subd. 4. Limitations on amount. A municipality may not issue bonds under this section if the maximum amount of principal and interest to become due in any year on all the outstanding bonds issued under this section, including the bonds to be issued, will equal or exceed 0.16 percent of the taxable market value of property in the municipality. Calculation of the limit must be made using the taxable market value for the taxes payable year in which the obligations are issued and sold. In the case of a municipality with a population of 2,500 or more, the bonds are subject to the net debt limits under section 47~.~3. In the case of a shared facility in which more than one municipality participates, upon compliance by each participating municipality with the requirements of subdivision 2, the limitations in this subdivision and the net debt represented by the bonds shall be allocated to each participating municipality in proportion to its required financial contribution to the financing of the shared facility, as set forth in the joint powers agreement relating to the shared facility. This section does not limit the authority to issue bonds under any other special or general law. Subd. 5. Application of this chapter. Bonds to finance capital improvements qualifying under this section must be issued under the issuance authority in this chapter and the provisions of this chapter apply, except as otherwise specifically provided in this section. History: 2003 c 127 art 12 s 16; 1Sp2003 c 21 art 10 s 11; 2005 c 152 art 1 s 27-30 Please direct all comments concerning issues or legislation to your House Member or State Senator. For Legislative Staff or for directions to the Capitol, visit the Contact Us page. General questions or comments. Page 2 of 2 httns://www.revisor.le~.state.mn.us/bin/setnub.nhn?nubtvne=STAY CHAP SEC&vear=c... 5/29/2009