Purpose

This bill would let the City of Caledonia create a local sales and use tax to help pay for a new Public Safety Center. The tax would require approval by voters and would be used in a way that is consistent with Minnesota law.

Key Provisions

• Subdivision 1 — Sales and use tax authorization

  • Caledonia may impose a local sales and use tax of one-quarter percent (0.25%) if approved by voters.
  • The tax would follow existing state laws and is in addition to any other local sales taxes.
  • Administration and enforcement would follow Minnesota statutes governing local taxes (297A.99), with oversight and rules applying as described.

• Subdivision 2 — Use of tax revenues

  • Revenues from the tax would be used to cover the costs of collecting and administering the tax and to finance up to $1,600,000 plus associated bond costs and interest for constructing the Public Safety Center.

• Subdivision 3 — Bonding authority

  • The city could issue bonds under state bond laws to help pay for the project.
  • The total principal of bonds could not exceed $1,600,000 plus issuance costs.
  • Bond proceeds could be paid from or secured by any money available to the city, including tax revenues.
  • Bond issuance would not be subject to certain state debt rules (specifically sections 275.60 and 275.61) and would not count toward the city’s debt limit.
  • Any levy to repay the bonds would not be subject to traditional levy limits.
  • A separate election to approve the bonds would not be required.

• Subdivision 4 — Termination of the tax

  • The tax would expire no later than ten years after it first begins, or earlier if the city determines the funds are sufficient to pay the project costs and any bond costs (including interest).
  • Any excess money after paying allowed costs would go to the city’s general fund, unless otherwise provided by law.
  • The city could also end the tax earlier by ordinance.

Administration, Oversight, and Elections

• The tax must be approved by voters at an election, as required by state law.
• The tax and bond actions would follow specified Minnesota statutes (297A.99 and related bond provisions).

Significance and What Changes

• Creates a new local funding mechanism for Caledonia to build a Public Safety Center through a 0.25% sales tax, subject to voter approval.
• Enables the city to issue up to $1.6 million in bonds (plus issuance costs) to support the project, with bond debt not counted against the usual debt limits.
• Establishes a sunset window (up to 10 years) for the tax, with rules for ending early if funds are sufficient.
• Allows the tax revenue to cover administration costs and bond-related costs, in addition to supporting the construction project.

Financial Impacts and Timing (at a glance)

• Tax rate: 0.25% local sales and use tax
• Project funded: Public Safety Center
• Bond cap: $1,600,000 plus issuance costs
• Tax duration: up to 10 years (terminates earlier if funds are sufficient)
• Debt and levy treatment: bonds excluded from debt limit; levy not subject to traditional levy limits

How it interacts with existing law

• Requires voter approval under existing statutes for local taxes (297A.99).
• Puts the new tax under the same framework as other local taxes, but with special provisions for bonding and sunset timing.
• Creates a funding path that supplements, and is in addition to, any other local taxes Caledonia may impose.

Relevant Terms - local sales and use tax - Caledonia - Public Safety Center - 0.25% (one-quarter percent) - revenues - bonding costs - Minnesota Statutes 297A.99 - Minnesota Statutes Chapter 475 - debt limit - levy limits - bond issuance - general fund - termination / sunset - voter approval - election - collection and administration costs