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AGENDA ITEM #_______

Request for Council Action

Date: May 26, 2020

To: East Grand Forks City Council Mayor Steve Gander, Council President Mark Olstad, Vice-
President Chad Grassel; Council members Clarence Vetter, Dale Helms, Tim Riopelle, Tim
Johnson, and Marc DeMers.

From: Reid Huttunen, Parks & Recreation

RE: Discussion on Local Sales Tax and Recreation Improvement Planning

Background:
The City loan from the Water & Light Department for renovations at the Swimming Pool has been paid in full
and Ms. Anderson is reviewing the remaining City Swimming Pool expenses from the repairs to ensure they
have all been re-paid as well.

Recently, the City was informed by the League of MN Cities that the 2020 request for Local Option Sales Tax
would not be moving forward due to a number of circumstances based around the COVID-19 situation, include
the shortened legislative session. Along with this notification, the League did share an amended House floor
bill that could allow for a Local City to continue a current Local Sales Tax through Dec, 2021. The summary
of this bill is included in the packet, described on page two of the bill summary.

On the discussion of Sales Tax, would the City Council like for us to further research the potential use of a
continued Local Sales Tax, for use on arena refrigeration improvements? Or should the current Local Sales tax
be ended once we have confirmation all the Swimming Pool renovation expenses have been paid in full?

Recreation Facility Improvement Planning

The second online survey is open now at this link: Https://surveymonkey.com/r/EGFParks2
We have received close to 400 responses so far, and are hoping to have a final push before the survey closes
at the end of this week, May 29th.

Once this survey closes, I’ll bring back a presentation of the results and discussion on next steps in our
improvement planning. Throughout this Spring/Summer, ultimately our goal would be to discuss the direction
of our arena improvement projects, and finalize a Master Plan for improvements that can help guide our
department through short term and long term improvements. Ideally, we would complete this process by mid-
July.

Recommendation:
Looking for direction from City Council on the potential use of a continued Local Sales Tax for improvements
at the Ice Arenas. With direction from council, we can continue discussion with the League of MN Cities to
see what process needs to be followed.

Enclosure:
House Bill Summary – H.F. 3876

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 Bill Summary

H.F. 3876
As amended by H3876A2

Subject Tax increment financing; five-year pooling rule extended to ten years
for redevelopment districts outside metro area
Authors Petersburg
Analyst Alexandra Haigler
Pat Dalton
Date April 27, 2020

Overview
As amended, this bill authorizes municipalities to use excess tax increment
financing (TIF) increment and revenues derived from certain local special taxes for
general fund purposes. Additionally, this bill extends the five-year pooling rule
that applies to TIF districts from five years to ten years for certain redevelopment
districts.

Summary
Section Description

Temporary use of increment authorized.

Allows TIF authorities to transfer unobligated, excess increment to the municipality’s
general fund for the municipality. The transferred increment is limited to the excess
of increment that is required to make bond payments or other financial obligations
within six months of the transfer. Transfers may be made through December 31,
2021.

The authority can only transfer funds after the municipality approves a spending plan
and holds a public hearing that discusses the use of transferred increment.

Effective the day following final enactment for any TIF district regardless of its
certification date.

Five-year rule.
Extends the five-year pooling rule to ten years for all redevelopment districts located
outside of the seven-county metro area. This change only applies to districts certified
after June 30, 2020.

Effective the day following final enactment.

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 H.F. 3876
As amended by H3876A2

Section Description

Temporary use of special tax revenues.

Allows local governments the temporary authority to divert a portion of certain local
sales tax revenues to their general fund for through December 31, 2021. This applies
to revenues from the following local taxes:

 general local taxes, including county transit taxes;

 food and beverage taxes;
 liquor taxes;
 admissions and amusement taxes; and
 lodging taxes imposed by special law.

It excludes lodging taxes imposed under general statutory authority that must be
used for funding a local tourism and visitor’s bureau.

The local government may only divert the money received in a calendar quarter not
needed to fund debt obligations in the next calendar quarter. Also, the portion of a
lodging tax authorized by special law that is required to be used to fund a local
tourism and visitor’s bureau may not be diverted to the general fund. The local
government must have a plan for the use of the revenues and hold a public hearing
on the topic prior to the diversion of any funds.

Effective the day after final enactment.

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information services to the Minnesota House of Representatives. This document
can be made available in alternative formats.
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