October 8, 2018 Local Sales & Use Tax Information Meeting Minutes

Introductions 

Mayor Anderson introduced key people including City Council Members, the City Administrator, Curt Meyer of Widseth Smith & Nolting, the Street/Water Commissioner, and the Public Works Director.

Presentation of recent improvement costs

City Administrator Anderson began the presentation by explaining what was spent on permanent improvement projects annually from both property taxes and water/sewer rate revenues for the past seven years. The average was $757,832 per year.

Presentation of City infrastructure needs

Engineer Curt Meyer, Widseth Smith & Nolting, provided several maps demonstrating the need for infrastructure improvements to the streets, water, and sanitary sewer systems. The cost to make improvements to the locations marked on the map for streets, water, and sanitary sewer totals $17,509,195 over a projected 15 year period.

Presentation of who will pay the tax

City Administrator Anderson presented a pie chart created by the University of Minnesota Extension Office from a 2016 retail market analysis. Local business owners responded that their business is made up of 46.8% local shoppers, 32.4% visitors or tourists, 11.3% seasonal residents, and 9.5% Canadian shoppers. City Administrator Anderson explained that with a local sales and use tax, City residents would not pay the entirety of the additional $800,000 in estimated revenue to be generated for public infrastructure projects. He also noted that 42 counties and 32 cities already have a sales and use tax in Minnesota. Other cities including Blackduck, Blue Earth, and Grand Rapids are seeking approval. Finally, he explained the money can only be used to pay for improvements to streets, alleys, water, sewer, sidewalks, and other public infrastructure.

Presentation of the tax impact and sales tax exemptions

Mayor Anderson gave examples of the effect a local sales and use tax would have on personal expenditures. One example included was dinner at a restaurant with the meal costing $12.00 would have an additional $0.12 sales tax. Mayor Anderson explained that a local sales and use tax would follow the same rules as the state’s sales tax and would have the same exemptions. A list of exemption examples was available in a handout, including food, clothing, and prescription drugs.

Public input/questions/comments

Mayor Anderson welcomed questions and comments from the audience. Numerous audience members had questions that were answered.

CLOSED the public meeting

There being no further public comment, Mayor Anderson closed the public information meeting at 8:30 P.M.