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The U.S. Congress has imposed a ceiling on IDB expenditures of $150 per resi- <br />dent from Jan. 1, 1985 and $100 after 1986. For Minnesota, the 1985 ceiling is <br />$619 million. Beginning in 1986, the ceiling is $412 million. This ceiling <br />seriously affects the financing of resource recovery facilities particularly <br />waste combustion facilities. Proposals to finance resource recovery facilities <br />with IDBs must now compete with other development proposals. Consequently, <br />other less desirable methods of financing resource recovery facilities may have <br />to be used. <br />Other financing mechanisms include leverage leasing, municipal lease purchases <br />and grants or loans. The Waste Management Board has the authority to provide <br />grants and loans for the development of resource recovery facilities. The <br />Council will receive monies from surcharges on disposal fees at metropolitan <br />landfills. These monies will be used to provide grants and loans to public and <br />private entities to develop facilities and source separation programs (see Part <br />5 of this guide). In addition, the counties have the authority to place a <br />surcharge on disposal fees at landfills within their jurisdiction and these <br />monies could be used for various facilities and programs. <br />Two underlying issues affect financing decisions: the risk inherent in the pro- <br />ject and the investment; and the amount of government participation desired in <br />the projectes financing. The major risks of any given security arise from the <br />projectes technology, the projectes markets and end -product market price, assur- <br />ance of municipal solid waste input, accuracy of the projected cash flows, abil- <br />ity to meet principal and interest payments, and promised return on invest- <br />ment. Public participation may be necessary to ease perceived risk by <br />investors. <br />The financial arrangements of existing resource recovery facilities throughout <br />the nation favor private investment, IOBs and government obligation (GO) <br />bonds. Nation-wide trends have been away from grants and GO bonds and towards <br />multiple -source financing, of which a blend of private investment and IDBS is <br />favored. <br />75 <br />