City Council Meeting Date: January 6, 2026
To: Mayor and City Council
From: Ben Martig, City Administrator
Brenda Angelstad, Finance Director
David Bennett, Public Works Director/City Engineer
Natalie Draper, Library Director
Title
Review & Discuss Options for Potential Resolution Supporting the Authority to Impose a Local Sales Tax to Fund Specific Capital Improvements Providing Regional Benefit, to Establish the Duration of the Tax and the Revenue to be Raised by the Tax, and to Authorize the City to Issue Bonds Supported by the Sales Tax Revenue.
Body
Action Requested:
Discussion only.
Summary Report:
The City Council had expressed interest to explore alternative revenue sources in conjunction with the current Strategic Plan. One alternative revenue source that may be used for certain capital projects is a local sales tax. There is a deadline pending for applying for the ability to seek legislative authorization for a local sales tax. The legislative authorization would still require voter approval and an additional authorization from the City Council after legislative approval if there was still interest to pursue.
The moratorium on local sales taxes expired on May 31, 2025, and cities may submit requests to the legislature during the 2026 legislative session. Cities need to follow strict rules and procedures to obtain legislative authority for the creation of a local sales tax. Cities seeking local sales tax authority must file requests with legislators on the House and Senate Taxes committees by January 31, 2026.
The city must submit a resolution proposing the local sales tax, details on the projects that will be funded by the tax, and documentation on regional significance. Cities may request legislative authority to impose a local sales tax to fund up to five capital projects of “regional significance” (Minn. Stat. § 297A.99).
Up to five projects can be identified for local option sales tax. Two projects have been identified as potential priorities during the budget process: the library’s site renewal plans for accessibility, safety, and sustainability, and safety, security, and other important updates to the Northfield Community Resource Center. Other projects may also be considered.
Links to MN State Statue 297A.99 Local Sales Tax and League of Minnesota Cities Process to Obtain Local Sales Tax Authority are attached for reference.
City Administrator Martig and staff are working on additional information as supplemental.
City Plans & Policies Relevance:
Information to come.
Alternative Options:
Information to come.
Financial Impacts:
Information to come.
Tentative Timelines:
January 6, 2026 Discussion
Jan 20, 2026 Council Resolution Consideration
Jan 31, 2026 Deadline to submit the approved resolution and supporting documents to the senate and house tax committee chairs
July 3, 2026 Once legislative approval is given, revised and reaffirmed resolution must be passed at least 90 days before a general election
November 3, 2026 General Election