SF4926

1. Purpose

2. This bill would let the city of Glencoe impose a local sales and use tax of up to 0.5% (one-half of 1%) if voters approve it. The tax would be used to fund specific city parks, trails, and related costs, and to cover the costs of administering the tax.

3. Key Provisions

4. Local option and rate: The city may impose a sales and use tax up to 0.5% by ordinance, but only if voters approve as required by state law. The tax would be in addition to any other local sales tax.

• Governing law: Imposition, administration, collection, and enforcement of the tax would follow Minnesota law (specifically Minn. Stat. 297A.99).

• Projects funded: Revenues from the tax must be used to pay for projects in Glencoe and to cover the costs of collecting and administering the tax, plus debt service on bonds that finance all or part of the listed projects.

1. Use of Revenue and Projects
2. Specific projects to be funded:
   • Oak Leaf Park upgrades and maintenance
   • Lincoln Park upgrades and maintenance
   • Glenn Knoll Park upgrades and maintenance
   • Railroad Depot Park upgrades and maintenance
   • Improvements to the city trail network

• Service and bond costs: Revenue can also cover the costs of collecting/administering the tax and securing and paying debt service on bonds issued to finance these projects.

1. Bonding Authority and Debt
2. Bonding authority: The city may issue bonds under Minnesota Statutes, chapter 475, to finance all or part of the project costs, with voter approval as required.

• Bond cap: The total principal amount may not exceed $2,725,000 plus the costs of issuing the bonds.

• How bonds are paid:

  • Bonds may be paid from or secured by money available to the city, including the tax revenues.
  • The bond issuance is not subject to certain state debt statutes (275.60 and 275.61) and is not counted in the city’s debt limit.
  • Levy of taxes to pay principal and interest on the bonds is not subject to levy limits.

• Election for bonds: A separate election to approve the bonds under the referenced statutes is not required.

1. Termination of the Tax and Surplus Funds
2. Tax duration: The tax would expire at the earlier of 15 years after it is first imposed or when the city determines that the funds received are sufficient to pay the project costs (and related bond issuance costs) approved by voters.

• Surplus funds: Any money remaining after paying the allowed costs, due to the timing of termination, must be placed in the city’s general fund, unless otherwise provided by law.

• Early termination: The tax may end earlier if the city enacts an ordinance to do so.

Relevant Terms - local sales and use tax - Glencoe - voter approval - up to 0.5% (one-half of 1 percent) - Oak Leaf Park - Lincoln Park - Glenn Knoll Park - Railroad Depot Park - city trail network - bonds / bonding authority - Minnesota Statutes section 297A.99 - Minnesota Statutes chapter 475 - debt service - administration and enforcement - levy limits - general fund - project costs - issuance costs - termination / sunset of tax