Agenda - Charter Commission - 10/19/2016

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� a Our Missiow To work together to resposihty grow ouf communiiry, and to prowlde quality,cost-effective.and eificlent gowemment serviem. Charter Commission Meeting Date: 10/19/2016 By: Diana Lund, Finance Information Title: Review of Bond Regulations and Tax Increment Purpose/Background: Purpose: Provide Input on City Bonding and Tax Increment Financing At its meeting of July 13, 2016,the Charter Commission had asked questions related to bond regulations in regard to capping debt limits on City bonding, issuing debt through the EDA, Conduit Debt,and the like. Also, questions were raised regarding how effectively Tax Increment Financing has been used in Ramsey, and whether it has been effective in other cities. To answer these questions,they asked that the Finance Director and the City's Financial Advisor(Stacie Kvilvang)be present at their next meeting. A brief overview of some of the questions raised: Debt limits: The statutory limit on debt in the City of Ramsey(per MN Statute 475.53, subd.1)is 3%of the Assessors Estimated Market Value of all taxable property within its boundaries.Net debt is the amount remaining of unused debt that the City still has in its capacity to use. The City's current debt limit is as such: Assessors Estimated Market Value: $2,116,664,200 Multiply by 3%(State Statute) .03 Statutory Debt Limit$ 63,499,926 Less: Outstanding Debt Paid Solely From Taxes (25,720,000)** Ramsey's Unused Debt Limit$ 37,779,926 **Outstanding Debt Uses: Road Reconstruction$ 2,855,000 Fire Station 2 $4,015,000 Muni Center$14,705,000 Ramsey Blvd $2,835,000 (County Reimburses City annually for Debt Service) Capital Equip $ 1,310,000 Total $25,720,000 The Municipal Center(Muni Center) debt was originally issued through the EDA(at the request of the City Council) and refinanced via CIP debt(Subject to reverse referendum)in 2012.When the bond was issued through the EDA,the EDA leased the building back to the City.When the City issued the CIP debt in 2012,the EDA lease was terminated and the City became the full owner.