SF3709

Purpose

• Allow the city of Osseo to raise local revenue to fund specific city projects by authorizing a local sales and use tax.

Authority to impose a local tax

• The city may impose by ordinance a sales and use tax of one percent, if approved by voters. The tax is subject to Minnesota law requirements (Minnesota Statutes 297A.99 and related provisions) and would operate alongside any other local taxes.

Use of revenue

• Revenues from the tax must be used to pay:
  • the costs of collecting and administering the tax,
  • and financing the following city projects (including debt service for bonds issued to support them):
  • Boerboom Park Community Hub Project (including comprehensive renovation/expansion as part of the City Campus Project)
  • City Hall Renovations Project (including improvements as part of the City Campus Project)
  • Sipe Park Project (improvements/renovations)

Bonding authority and financing

• Osseo may issue bonds under Minnesota Statutes chapter 475 to help pay for project costs, up to the following aggregate amounts plus bond issuance costs:
  • Boerboom Park/City Campus Project: up to 10,000,000
  • City Hall Renovations/City Campus Project: up to 3,000,000
  • Sipe Park Project: up to 500,000
  • Total potential principal: 13,500,000 (plus costs of issuing bonds)
• Bonds may be paid from any city funds, including the tax revenue; bond issuance is not subject to certain debt-related statutes, and the bonds are not counted against the city’s debt limit. A separate election to approve the bonds is not required.

Termination and fund disposition

• The tax expires at the earlier of:
  • 20 years after it is first imposed, or
  • when the city determines that the amount received is enough to pay the authorized project costs (including issuance costs and interest) plus any other related obligations.
• Any money remaining after paying allowed costs, due to timing of termination, must be deposited in the city’s general fund.
• The tax may be ended earlier by city ordinance.

Relationship to existing law and governance

• The tax is in addition to any other local sales and use tax.
• The city’s use of funds and administration follow applicable Minnesota statutes (notably 297A.99 subdivision 3) and bonding rules; the ordinance includes provisions for administration and enforcement of the tax.

Notable clarifications

• The bill specifies that the tax revenues can be used for debt service on bonds and related bond issuance costs.
• No separate election is required to approve the bond issuance itself.

Relevant Terms - Osseo, sales and use tax, local tax, one percent, voter approval, Minnesota Statutes 297A.99, 297A.99 subdivision 3, bonding, Minnesota Statutes chapter 475, Boerboom Park Community Hub Project, City Campus Project, City Hall Renovations Project, Sipe Park Project, debt service, costs of issuing bonds, administration and enforcement, general fund, termination, 20 years.