SF4314

4. Purpose

• Authorizes the City of Alexandria to impose a local sales and use tax to fund the expansion and renovation of the PrimeWest Health Runestone Community Center, with the tax rate set at up to 0.25% (one-quarter of one percent). The tax requires voter approval and must follow the rules in Minnesota Statutes. In addition, revenues are to cover the costs of collecting and administering the tax.

4. Main Provisions

• 4.1 Tax authorization and governance

  • The city may impose a sales and use tax of up to 0.25% for the purposes described, if approved by voters at an election. The tax operates under the framework of Minnesota Statutes section 297A.99 and, unless otherwise specified, on the same terms as other local sales and use taxes.

• 4.2 Revenue use

  • Revenues from the tax must be used to pay the costs of collecting and administering the tax and to finance up to $30,000,000 plus related bond issuance costs for the expansion and renovation of the Runestone Community Center.

• 4.3 Bonding authority

  • The city may issue bonds under Minnesota Statutes chapter 475 to finance all or part of the project costs. The total principal amount may not exceed $30,000,000 plus the amount needed to cover bond issuance costs. Bond proceeds can be paid from or secured by any money available to the city, including tax revenues.
  • Bond issuance is not subject to Minnesota Statutes sections 275.60 and 275.61, and the bonds are not counted in the city’s debt limit. Any levy under Minnesota Statutes section 475.61 to pay principal and interest is not subject to levy limitations.
  • A separate election to approve the bonds under Minnesota Statutes section 475.58 is not required.

• 4.4 Termination and sunset

  • The tax expires at the earlier of 20 years after the tax is first imposed or when the city council determines that the tax revenues are sufficient to pay the project costs plus any bond-related costs, including interest, as approved by voters. Any remaining funds after paying costs generally go to the city’s general fund, unless otherwise provided. The tax may end earlier if the city adopts an terminating ordinance.

• 4.5 Relationship to other taxes

  • The authorized tax is in addition to any local sales and use tax imposed under other laws or charters.

4. Significant Changes (in plain terms)

• Creates a new local option for Alexandria to levy a 0.25% sales tax specifically to fund a major community center project and related costs.
• Allows up to $30 million in bonding to finance the project, with bonds not counted toward the city’s debt limit and not requiring a separate election for bond approval.
• Sets a 20-year maximum duration for the tax, with an automatic sunset sooner if funds are sufficient to cover costs.
• Allocates tax revenues first to project-related costs and bond costs, with any leftover funds going to the city’s general fund.

4. Important Compliance Details

• Tax relies on voter approval and follows the procedures in Minnesota Statutes section 297A.99.
• Bond issuance is exempt from certain debt-levy statutes (275.60, 275.61) and does not require a separate bond election under 475.58.
• Administration and collection costs are covered by the tax revenues, ensuring the tax funds the administration of the program as well as the project.

Relevant Terms - local sales and use tax - up to one-quarter of one percent - City of Alexandria - PrimeWest Health Runestone Community Center - expansion and renovation - bonding costs - Minnesota Statutes section 297A.99 - Minnesota Statutes chapter 475 - 275.60 and 275.61 (debt provisions) - levy limitations - 475.58 (bond election) - sunset/termination (20 years or project-funded)