06 - PRIORITIZATION OF NEEDS AND ACTION PLAN
Bonds Bonds are generally the most common source used by cities for the purchase of land and for providing development monies. There are two types of bonds which are used for parks, both of which must be approved by referendum. General Obligation Bond The General Obligation Bond is amortized using ad valorem taxes and is used for the funding of capital projects which are not supported by a revenue source. These projects include water service, sanitary sewer service, and park acquisition and development. The availability of bonding for parks is often dependent upon the overall municipal needs financed by this source. Capital items such as purchase of land and physical improvements with a usable life expectancy of 15 to 20 years can be funded with general obligation bonds. Revenue Bonds Revenue bonds finance projects that produce enough revenue to retire debt; for example golf courses, batting cages and enterprise-oriented park projects. Private Donations Private donations may also be received in the form of funds, facilities, recreational equipment, art, or in-kind services. Donations from local and regional businesses as sponsors for events or facilities should be pursued. A Parks Improvement Trust Fund may be set up to manage donations by service organizations, benevolent citizens, willed estates, and other donated sources. The purpose of this trust is to establish a permanent source of principle value that will increase as donations occur. The principal cannot be decreased; however, the annual interest can be used for park development. Sales Tax Option The passage of Senate Bill 376 in 1992 gave cities an economic development tool which provided sales tax that could be levied for park and recreation purposes. Under S.B. 376, a corporation separate from the city must be created to manage the sales tax funds. The corporation’s board of directors must have seven members appointed by the City Council. At least three of the directors must not be employees or elected officials of the city. The corporation then manages the revenue from the sales tax for park and recreation improvements. For the City of DeSoto, this is the Park Development Corporation.
99
City of DeSoto - 2020 Parks, Recreation, Open Space & Trails Master Plan
Made with FlippingBook flipbook maker