City staff will not be able to visit groups to explain the tax before city residents vote on it in November
By Terry Lehrke, News Editor
The Little Falls City Council feels residents are confused about the proposed one-half of 1 percent local option sales tax — an option residents will vote for or against on the November ballot.
City Administrator Dan Vogt asked the Council Monday night, whether it wanted city staff to provide the presentations as a way to educate the public.
But, to avoid perception that the city is promoting it or funding it (which it is not allowed to do), the Council voted not to allow city staff to address clubs and organizations about the tax.
The sales tax, imposed on everything that is currently taxable in Minnesota, would be used for constructing the Little Falls Area Recreational Complex, in north Little Falls, near the Living Hope Church, on 22 acres of land donated by the Minnesota Department of Transportation. The tax would be in effect for a 12-year period.
The idea to implement a local option sales tax was first presented to the Council in October 2013 by Adam Fjeld, a resident of Little Falls. Bob Reinitz, a proponent of the Camp Ripley/Veterans State Trail, also addressed the Council that evening, saying the tax could help fund bringing that trail through the city as well.
Fjeld said he hadn’t sought any permission and didn’t present the information on behalf of any committee. “I was just a citizen looking for ways to pay for the recreational complex — the whole shebang,” he said. At that time, he said, he wasn’t a part of the Little Falls Area Recreational Complex Committee and he had asked several people to talk about what the tax could be used for, including Reinitz.
Fjeld had called St. Cloud and asked how the city funded some of its recreational areas and learned it was through a local option sales tax in the city.
“That way, not just residents pay for it — but everyone who comes into town,” said Fjeld. And getting people to town with such an attraction is a goal as well.
A rendering with cost estimates for the project was done in November 2013. It included the playground (which has since been completed), paving and utility extension, splash pad/all-wheel park, basketball courts, three baseball diamonds, restrooms, a community building, trail within the complex and the community and property acquisition which is now estimated at just under $7.9 million.
Some of the property part of the baseball diamonds and parking lot sit on in the rendering, does not belong to the city. To complete the project as planned, property would have to be acquired.
In July, the Little Falls City Council approved sending the question to the voters on the Nov. 4 General Election ballot — the first step in implementing such a tax.
When the Council approved the wording on the question, City Attorney Toni Wetzel cautioned them to include all the items the tax may pay for — excluding any one item would mean no part of it could be paid for using proceeds from the tax — such as the splash pad. Mayor Cathy VanRisseghem has said in the past, and reiterated Monday night, that funds would be raised for the splash pad so no taxpayer dollars would be used. She said in July, that the plan was to have the splash pad funded before the tax might go into effect.
The wording approved by the Council for the question to be included on the ballot for Little Falls residents says:
“Shall the Little Falls City Council impose by Ordinance, a sales and use tax of one-half of 1 percent (1/2%) for the purpose of paying capital costs for the construction of the Little Falls Area Recreational Complex including, but not limited to, property acquisition, restrooms, picnic shelters, community facility, ball fields, tennis and basketball courts, all wheel park, splash pad, access roadways, utilities and parking lots, as well as hiking and biking trails within the Complex and throughout the community?”
If, and only if, a majority of voters in the city of Little Falls choose to implement the local option sales tax, the Legislature will take up the matter. It must be approved by the Legislature before the tax can be implemented.
If the Legislature approves the tax, the Council will also have to draft an ordinance and approve the sales tax. It won’t go into effect until the quarter after Legislative approval — probably not until October 2015.
A local option sales tax is used by cities to fund “regionally” significant items, but cannot be used for road and infrastructure improvements.
Vogt, who had been willing to go to club and organization meetings to educate the public about the tax, had a few examples of the impact of the tax.
If the tax is approved by the voters and the Legislature, anyone shopping in Little Falls would pay the one-half of 1 percent (1/2%) on items and services subject to state sales tax — or 10 cents more on a $20 purchase, $1 on a $200 purchase, $10 on a $2,000 purchase.
The tax would not be paid on clothing, food or other items not currently taxed.
The state collects the local option sales tax, as it does other sales tax, and sends it to the city. The money generated by the local option sales tax will be held in a fund and can be used only for those items listed in the ballot question. It may not be used for maintenance, which was estimated at about $30,000 per year.
However, the City Council can choose, from that list, which items to move forward with. It may also choose to bond for the entire project and make the bond payments using the monies collected from the tax each year.
If the project is completed for less than the proposed $7.9 million and paid for sooner than the expected 12-year life of the tax, the tax will end at that point.
If the project isn’t completed in the 12-year time frame, the Council at that time may once again take it to the voters for an extension of the local option sales tax.