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have to be followed. With respect to financing the project, Council would most <br />likely authorize the sale of bonds with the collateral being the full faith and <br />credit of the entire City to insure repayment if the taxing district defaults. <br />The City would get the money to pay back the loan from taxes levied against all <br />property within a particular taxing district. Proceeds from that tax on that <br />taxing district would go to pay off bond holders. It should be noted that the <br />taxing district procedure does not require that the City prove any particular <br />property or any one lot has special benefit because of the improvement. <br /> <br />Mr. Raatikka - In 1980, the City contracted with it's engineer to prepare a <br />Comprehensive Storm Drainage Plan. This plan is part of the City's overall <br />comprehensive planning process and determined drainage patterns, estimated <br />flows and what storm sewer improvements would be needed for future development <br />and to provide drainage to existing areas. The basis for dividing the City <br />into districts was based on physical boundaries such as highways, streets and <br />ridges. There are 8 different districts found within the Comprehensive <br />Drainage Plan. The two districts under consideration tonight are the West and <br />South Central. <br /> <br />Mr. Hartley - Storm Sewer Taxing Districts is one of the lesser known <br />alternatives for financing storm sewer improvements. Other financing options <br />are: 1) special assessments; 2) general taxes; 3) developer provided <br />improvements; 4) tax increment financing. The characteristics of these <br />options are as follows: <br /> <br />Special assessments - When you use special assessments you normally <br />define an area of benefit and apply the cost of that improvement based <br />on some factor. With storm sewer the factor is area or acreage. This <br />method is not necessarily as equitable as other approaches and the <br />reason for that is because the area claimed to be benefitted tends to <br />be narrowly defined. <br /> <br />Ad Valorem Tax - This has been used in the past by some communities to <br />pay for storm sewer improvements but it is a cumbersome procedure. If <br />a large improvement is to be proposed, it is difficult to borrow money <br />when you are using a tax generated from the entire community as a revenue <br />source. The other problem with this method is that one area of the City <br />may benefit where other areas may not but the entire City pays for the <br />improvements. <br /> <br />Developer Installation - This method can be used to some extent but a lot <br />of properties are already developed. Another problem is that developers <br />routinely develop a much smaller area; areas needing drainage are much <br />larger than what the developer is developing. <br /> <br />Tax Increment Financing - This is a specialized means of financing <br />storm sewer, or any other improvement. It becomes rather difficult to <br />use because it only works if development occurs and/or property values <br />increase to generate enough additional tax dollars to pay for the <br />improvements and this is not always the case. <br /> <br />Storm Sewer Taxing Districts - If taxing districts were established and <br />improvements were required at any point or any place within that district, <br /> April 15, 1986 <br /> <br />Page 2 of 12 <br /> <br /> <br />