Here we provide tips for putting together an enticing application for next year’s bonding bill and cover what to do if you miss the June 16 deadline.
This year the Minnesota legislature passed a number of bills that will provide substantial funding for local units of government. Most notably, the legislature passed a transportation bill that includes $300 million in general fund resources and $600 million in debt, as well as a nearly $1 billion bonding bill. Next year, we get back on schedule with a regular bonding bill (2017 was an anomaly since the regular bonding bill in 2016 did not pass).
Now is the time to start preparing for next year.
To help you, here are tips and guidelines for putting together a winning application, based on our success in securing nearly $30 million in funding from the 2017 bonding bill for seven clients' critical infrastructure projects across Minnesota — from International Falls to McLeod County.
The process starts with an application through the Capital Budget System (CBS), coordinated by Minnesota Management & Budget (MMB). It’s best to enter your project with MMB and the state system because your project gets reviewed by the Governor and the legislative committees in the summer and fall. There are still options if you miss the June 16 deadline. Legislators can introduce bills appropriating money towards various projects during the course of the regular legislative session, up until the bill introduction deadline. However, this is not the preferred method.
Typically, the state looks for projects with state or regional significance or that have environmental implications — not local utilities, roads or buildings. The Minnesota Constitution defines how general obligation bond proceeds can be used. Article XI, Section 5, of the Minnesota Constitution contains the authority for incurring this public debt. Subdivision (a) authorizes debt “to acquire and to better public lands and buildings and other public improvements of a capital nature, and to provide money to be appropriated or loaned to any agency or political subdivision of the state for such purposes.” In layperson’s terms, the project must be for a public purpose, it must be publicly owned, and project activities must constitute capital expenditures. Land, buildings, design and construction are eligible. Planning and operating expenses are not eligible.
As mentioned, the project should be able to demonstrate benefit beyond the boundaries of the applicant. For example, the Cypress Drive project in Baxter, Minnesota, received bond funds because the project will alleviate congestion on the state trunk highway system. How will others benefit from your project?
The state doesn’t like to be the only funder on a project, so it is important for the applicant to show they have skin in the game. Bring some funding to the table. You can use non-state funds, such as federal or private funds (although the project cannot be privately owned).
Not a lot of information is needed at this stage. The real work comes later, during tours and the legislative session. For now, you will need to have a project narrative with:
It is critical that you engage your state senator and representatives early and often. They will need to demonstrate knowledge and support of your project to their colleagues. The more you can do to help them, the better your chances for success. Prepare to host legislative tours late summer/early fall. Continue to strategize with your senator and representative. Finally, be ready to provide additional information and testimony during the 2018 legislative session, from January through May 2018.
There should be a bonding bill in 2018. The best way to get your project(s) included is to start now. As mentioned, we have a history of success in securing funds for our clients’ projects through the bonding bill and are ready to be your resource in getting your project started.
Email me with any questions, or if you’d like to meet with our team of consultants to discuss your project.
Mike Larson is a senior community development specialist who helps communities get the funding they need for difference-making projects.