SF4724

Purpose

• Authorize the City of Taylors Falls to impose a local sales and use tax of 0.5% if voters approve, to fund specified city projects and related costs.

Main Provisions

• Tax authorization
  • The city may impose a 0.5% local sales and use tax, if approved by voters at an election, and as allowed by Minnesota law. The tax would be in addition to any other local taxes.
• Use of revenue
  • Revenues from the tax would be used to cover the costs of collecting and administering the tax, and to fund three specific projects in Taylors Falls plus bond-related costs:
  • Community center improvements ($1,600,000)
  • Taylors Falls River Walk improvements and trail system ($1,000,000)
  • Development of a town square ($400,000)
• Bonding authority
  • The city could issue bonds to finance all or part of the project costs, under state bonding law (Chapter 475).
  • The total amount of bonds could not exceed $2,000,000 plus issuance costs.
  • Bond payments could come from the tax revenues or other city funds, and the bonds would not count toward certain debt limits.
  • Issuing bonds would not require a separate debt election, and would not be subject to specific debt-levy limitations.
• Termination (sunset)
  • The tax would expire at the earlier of 20 years after it is first imposed or when the collected funds are sufficient to cover the project costs and bond-related costs, plus interest.
  • After termination, any remaining funds would go to the city’s general fund.
  • The city could shorten the tax period by ordinance if desired.

Significant Changes to Existing Law

• Creates a new local sales and use tax authorization for the City of Taylors Falls, conditioned on voter approval.
• Allows specific project funding through sales tax revenues and bond financing, with a clearly defined cap and sunset.
• Grants bonding authority independent of some standard debt and levy requirements, and sets rules about how bond payments are made and reported.

Implications and Considerations

• Requires voter approval to take effect.
• Funds are restricted to the three identified projects and related administrative costs, plus bond issuance costs.
• The city gains borrowing power for project funding without triggering certain debt limits, and without a separate debt election.
• The tax is temporary, with a defined end date or when project costs are paid, whichever comes first.

Relevant Terms - City of Taylors Falls - local sales and use tax - 0.5% (one-half percent) - voter approval / election - Minnesota Statutes 297A.99 - appropriation for projects - community center improvements - Taylors Falls River Walk improvements and trail system - development of a town square - bonding authority / bonds - Minnesota Statutes Chapter 475 - issuance costs - debt limits - general fund - sunset / termination