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Funding Source <br />Pros <br />Cons <br />General Obligation <br />(GO) Bonds <br />Dependable, but only as long as city <br />maintains a good rating. <br />Tax write -off. <br />Increased tax capacity rate. <br />Counts against debt limit. <br />Franchise Fees <br />Constant, dependable and renewable <br />funding source. <br />Provides taxpayer transparency. <br />Payment not reflective of residency, <br />tax status, or ownership status. <br />Small monthly payments easier for <br />taxpayers than one large assessment. <br />Reduces levy impacts due to bond <br />interest. <br />Requires public outreach effort. <br />Special Assessments <br />(State Statute Ch. <br />429) <br />Provides taxpayer transparency (cost <br />versus benefit). <br />Accepted process. <br />Tax write -off. <br />Petitions easily delay or derail projects. <br />Proving benefit can be difficult and add <br />to project costs. <br />Large assessments are hard to pay. <br />General Levy (MSA <br />Fund) <br />City directly controls funds. <br />Not a constant, dependable or renewable <br />funding source. <br />Not transparent to taxpayers. <br />Levy limit dependent. <br />MnDOT Municipal <br />State Aid Annual <br />Apportionment <br />Declining due to waning fuel tax revenues <br />due to erosion by inflation, fewer vehicle <br />miles driven per capita, and use of more <br />fuel- efficient and alternate -fuel vehicles. <br />Tax Abatement <br />Districts <br />Taxpayer transparency (cost versus <br />benefit). <br />Most benefitted properties pay. <br />$200,000 annual limit. <br />Proving benefit can be difficult and can <br />add to project costs. <br />New TAD created for each project. <br />Tax Increment <br />Financing <br />Existing TIF's are soon expiring. <br />Special Legislation <br />Unknown...TBD <br />Unknown...TBD <br />FIGURE 2 <br />Long -Term Street Maintenance and Reconstruction Program Funding Source Pros & Cons <br />August 27, 2013 <br />