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 potent...
Click here for full text