Parks & Recreation Facility Improvement Planning
Throughout 2020, the Parks and Recreation Department held multiple forms of Community Input sessions to encourage residents to participate in the early planning process for improvements to the cities recreation facilities. A Community Input session was held at the Civic Center in February 2020, and two online community survey’s were conducted to identify the community’s priorities in facility improvements within the City of East Grand Forks.
These survey’s were conducted to gauge the input of our residents on their general support for the outlined facility improvements, the potential level of support for a local sales tax to fund them, and general input on the direction/goals of the improvements within each facility. The input received from our citizens is valuable in determining the direction of these improvements and even the potential scope of work within each facility.
The following links detail the survey responses and input given by residents and how they help align the project goals for Recreation Facility Improvements within our Ice Arenas and Baseball Complex.
Community Survey #1 - available March 15 - April 15, 2020 - click here to see results
Community Survey #2 - available May 1 - May 30, 2020 - click here to see results
Continue to check back to this webpage for additional opportunity to review plans and provide feedback to the communities plans for facility improvements.
- May 2, 2020 - Local Option Sales Tax proposals are placed on hold through 2021. The MN State Legislature releases a draft tax legislation bill which places a moratorium on new local sales tax proposals through the 2021 MN legislative session.
- April 14, 2020 - results of the first online survey for improvement planning is shared with City Council. City Council discusses unlikelihood of a Local Sales tax at this time due to COVID-19 shutdown.
- March 19, 2020 - East Grand Forks hearing with the MN State Senate Tax Committee is cancelled due to COVID-19 shutdown
- March 11, 2020 - East Grand Forks testifies with MN State House of Representatives Tax Committee on proposed projects and 1% Local sales tax
- February 24, 2020 - Special Meeting of the City Council, the City Council discussed and approved a resolution to authorize a request to the MN State Legislature to seek a 1% Sales Tax for a duration of 20 years or $15 Million, whichever comes first. Projects include in proposed project include ice arena repairs and improvements and Stauss Park ball field improvements.
- January 21, 2020 - East Grand Forks City Council passes an initial resolution proposing a 2% local sales tax to fund up to $32 Million in projects to improve the city ice arenas, ball fields, LaFave Park and Greenway trails. @(Model.BulletStyle == CivicPlus.Entities.Modules.Layout.Enums.BulletStyle.Decimal ? "ol" : "ul")>
Background INformation Documents on Facility Planning
Important Project information and Documents
Sales Tax vs. Property Tax
The City of East Grand Forks is interested in seeking a local option sales tax to fund recreation facility improvements to help share the cost of the projects with residents and non-resident visitors to our community.
Sales Tax is a one-time tax, which is collected on at the point of sale on all Sales & Use tax eligible purchases made in East Grand Forks. This tax is collected from both residents and visitors of East Grand Forks.
The City currently has a 1% Local Option Sales Tax in place, approved by our residents in 2016, to fund the renovation of the Sherlock Park Swimming Pool. This sales tax was overwhelmingly approved by our voters in 2016, with 70% voting in approval. Upon approval of the Sales tax vote, the City used a low-interest loan to fund the project, and the average $85,000 a month in tax revenue has been used to pay back the loan. The Swimming Pool project is expected to be paid in full by June 2020, at which time this tax will “sunset” or retire.
The City’s plan for funding of the considered recreation facility projects would be much the same as the pool renovation, using low-interest bonds to pay for improvements, with 1% Local Sales tax revenue being used to pay back the bonds. At the average $85,000 a month in tax revenue, the City can expect to pay off $15 Million in project costs plus interest in about 20 years.
Property tax is an annual tax, which is based on the current value of the property of local homeowners and businesses. Only those that own or rent property within the city pay property taxes.
The City has also reviewed the option of property tax increases to fund the necessary improvements to our recreation facilities. This is not a desired option, as it would place a significant burden on our residents. Based on the City’s 2018-2019 Net Tax Capacity (NTC), the City could seek a 20 year General Obligation bond to fund about $15 Million in project funds. This increase would mean an estimated $257 annual increase on residential property taxes for a $200,000 home for the next 20 years. Commercial property tax increases could be even greater.
What does a 1% Local Sales tax mean to me?
The current Sales & Use Tax in the City of East Grand Forks is 8.125%. this includes a 1% Local sales tax to pay for the swimming pool improvements which is expected to be retired as soon as June 2020. This means a new 1% Sales Tax for improvements of recreation facilities would replace the expiring pool tax, and our city sales tax rate would remain at 8.125%.
The below table represents an example of the Sales Tax paid on eligible purchases, using the current rate of 8.125%.
|Purchase Subtotal||8.125% Tax Rate||Purchase Total|
What does it take for a City to consider a Local Option Sales Tax?
The requirements to institute a local sales tax in the State of Minnesota were changed in 2019, and the City must follow a new process to consider a local sales tax. The process and timeline for a Local Sales Tax are the following:
- City Council must pass a resolution authorizing a vote for a local sales tax.
- January 21, 2020 – City Council passes a resolution for a 2% Local Sales Tax with four projects totaling an estimated $32 Million in projects
- January 31, 2020 - City of East Grand Forks submitted the council resolution, details of the four proposed projects and how the projects carry regional significance to the MN State Legislature.
- February 24, 2020 – City Council holds a Special Meeting to discuss local sales tax, after receiving unfavorable feedback from the MN State Legislature on a local 2% Tax increase. City Council authorizes an amended resolution which now authorizes support for a 1% Local Sales Tax to pay for up to $15 Million in projects or 20 years, whichever comes first. The City’s indoor Ice Arenas and Stauss Park Baseball Complex were listed as projects included in this funding.
- MN State Legislature must now review the Local Sales Tax proposal and approve the City of East Grand Forks to move forward with a City vote to approve a Local Sales Tax.
- March 12, 2020 – Mayor Steve Gander and Parks & Recreation Superintendent Reid Huttunen attended a MN House of Representatives Tax Committee hearing to testify on behalf of the local sales tax.
- MN State Senate Tax Committee hearing was also scheduled for March 19, 2020, but has been postponed due to the novel Coronavirus threat.
- If approved by MN State Legislature, the City of East Grand Forks will finalize a resolution detailing the projects to be included in the final election ballot, and final approval of what percent the local sales tax will be and for how many years.
- A separate ballot question for each proposed project would be on the ballot for the November 3, 2020 general election
- Following the vote at the General Election, any projects approved to move forward will move into a design phase and the City will begin work on bidding out the work for the approved projects.