City Council

AGENDA Special City Council Meeting December 20, 2022 Council Chambers 5:30 PM CALL TO ORDER / CALL OF ROLL PLEDGE OF ALLEGIANCE APPROVAL OF THE AGENDA ADMINISTRATOR’S REPORT Approval of Local Sales and Use Tax Ordinance and Summary Publication Recommendation: Waive reading and adopt Resolution 2022-140, approving the summary publication of Ordinance No. 891, by title and summary. Recommendation: Waive reading and adopt Ordinance No. 891, relating to Local Sales and Use Tax. Adjournment  REQUEST FOR COUNCIL ACTION Meeting Date: December 20, 2022 Advisory Board/Commission ☐ Open Forum ☐ Requester: CV Award of Bid ☐ Other: ☐ CA Approval: CV Consensus Motions ☐ Public Hearing ☐ Department: ADMINISTRATOR’S REPORT ☒ Title: Amending the Code of Ordinances, Imposing a Local Sales and Use Tax BACKGROUND There are several steps (most of which have been completed) the City needs to take to implement the sales and use tax authorized by the State Legislature in 2021 and approved by voters in the 2022 General Election to help in funding the construction of a new Public Works facility and the expansion and remodel of the Police facility. Recent steps include: • August 8, 2022 - City Council adopted Resolution No. 2022-86 authorizing the City of Oakdale to impose a sales and use tax and the issuance of bonds for purposes of public works facility and police facility and calling a special election. • November 8, 2022 - Two City questions were on the general election ballot for a local option sales tax. Both City questions were approved by the voters. • November 16, 2022 - City Council held a special meeting to canvass the votes, making the election results official. The next step is to adopt an ordinance imposing the sales and use tax and to establish an effective date. The earliest this can be is April 1, 2023. STAFF RECOMMENDATION Staff recommends the adoption of Ordinance No. 891, imposing a local sales and use tax. CITY COUNCIL ACTION REQUESTED It is requested that the City Council adopt Ordinance No. 891, imposing a local sales and use tax. Attachment Proposed Ordinance No. 891  City of Oakdale ORDINANCE NO. 891 AN ORDINANCE OF THE CITY OF OAKDALE, MINNESOTA, RELATING TO LOCAL SALES AND USE TAX THE CITY COUNCIL OF THE CITY OF OAKDALE DOES HEREBY ORDAIN: LOCAL SALES AND USE TAX Section 1. Authority. Pursuant to Minnesota Laws 2021, 1st Special Session, Chapter 14, Article 8, Section 15, the Minnesota Legislature has authorized the City of Oakdale to impose a local sales and use tax to provide revenues to pay the costs of collecting and administering the tax to the commissioner of revenue of the state of Minnesota and to finance the capital and administrative costs related to the funding of designated projects as defined in Minnesota Laws 2021, 1st Special Session, Chapter 14, Article 8, Section 15 and approved by the voters at the November 8, 2022 referendum. Section 2. Definitions. For purposes of this Ordinance, the following words, terms, and phrases have the meanings given them in this section unless the language or context clearly indicates a different meaning is intended. (a) City. “City” means the City of Oakdale, Minnesota. (b) Commissioner. “Commissioner” means the commissioner of revenue of the state of Minnesota or a person to whom the commissioner has delegated functions. (c) Designated projects. “Designated projects” means the planning, construction and any other capital costs plus the costs of collecting and administering the tax and the costs of issuing any bonds including interest is collected for the following projects: 1) $22,000,000 for the construction of a new Public Works facility 2) $15,000,000 for the construction and rehabilitation and associated building costs of the Police facility as authorized by the Minnesota Legislature in Minnesota Laws 2021, 1st Special Session, Chapter 14, Article 8, Section 15 and approved by the voters at the November 8, 2022 referendum. (d) State sales and use tax laws and rules. “State sales and use tax laws and rules” means those provisions of the state revenue laws applicable to state sales and use tax imposition, administration, collection, and enforcement, including Minnesota Statutes, chapters 270C, 289A, 297A, and Minnesota Rules, chapter 8130, as amended from time to time. Section 3. Local sales and use tax imposed; amount of tax; coordination with state sales and use tax laws and rules. A local sales tax is imposed in the amount of one-half of one (0.5) percent on the gross receipts from sales at retail sourced within city limits which 1 are taxable under the state sales and use tax laws and rules. A local use tax is imposed in the amount of one-half of one (0.5) percent on the storage, use, distribution or consumption of goods or services sourced within city limits which are taxable under the state sales and use tax laws and rules. All of the provisions of the state sales and use tax laws and rules apply to the local sales and use tax imposed by this Ordinance. The local sales and use tax imposed by this Ordinance shall be collected and remitted to the commissioner on any sale or purchase when the state sales tax must be collected and remitted to the commissioner under the state sales and use tax laws and rules and is in addition to the state sales and use tax. Section 4. Effective date of tax; transitional sales. Except as otherwise provided herein, the local sales and use tax imposed by this Ordinance shall apply to sales and purchases made on or after April 1, 2023. The local sales and use tax imposed by this Ordinance shall not apply to: (a) The gross receipts from retail sales or leases of tangible personal property made pursuant to a bona fide written contract, which unconditionally vests the rights and obligations of the parties thereto, provided that such contract was enforceable prior to April 1, 2023, and that delivery of the tangible personal property subject thereto is made on or before April 1, 2023. (b) The gross receipts from retail sales made pursuant to a bona fide lump sum or fixed price construction contract, which unconditionally vests the rights and obligations of the parties thereto and which does not make provision or allocation of future taxes, provided that such contract was enforceable prior to April 1, 2023, and that delivery of the tangible personal property used in performing such construction contract is made before October 1, 2023. (c) The purchase of taxable services, including utility services, if the billing period includes charges for services furnished before and after April 1, 2023, but the local sales and use tax imposed by this Ordinance shall apply on the first billing period not including charges for services furnished before April 1, 2023. (d) Lease payments for tangible personal property and motor vehicles that includes a period before and after April 1, 2023, but the local sales and use tax imposed by this Ordinance shall apply on a prorated basis to lease payment amounts attributable to that portion of the lease payment period on or after April 1, 2023 and on the entire lease payment for all lease payment periods thereafter. Section 5. Tax Clearance; Issuance of Licenses. (a) The city may not issue or renew a license for the conduct of a trade or business within the city if the commissioner notified the licensing division of the city that the applicant owes delinquent city taxes as provided in this Ordinance, or penalties or interest due on such taxes. (1) City taxes include sales and use taxes provided in this article. Penalties and interest are penalties and interest due on taxes included in this definition. (b) Delinquent taxes does not include a tax liability if: (i) an administrative or court action which contests the amount or validity of the liability has been filed or served, (ii) the 2 appeal period to contest the tax liability has not expired, or (iii) the applicant has entered into a payment agreement and is current with the payments. (c) Applicant means an individual if the license is issued to or in the name of an individual or the corporation or partnership if the license is issued to or in the name of a corporation or partnership. (1) A copy of the notice of delinquent taxes given to the licensing division of the city shall also be sent to the applicant taxpayer. In the case of renewal of a license, if the applicant requests in writing, within 30 days of receipt of the notice of hearing, then, a contested hearing shall be held under the same procedures as provided in Minn. Stat. 270A for the state sales and use tax imposed under Minn. Stat. 297A; provided further that if a hearing must be held on the state sales and use tax, hearings must be combined. Section 6. Deposit of revenues; costs of administration; termination of tax. (a) All of the revenues, interest, and penalties derived from the local sales and use tax imposed by this Ordinance collected by the commissioner and remitted to the city shall be deposited by the city finance director in the city treasury and shall be credited to the fund established to pay the costs of collecting the local sales and use tax imposed by this Ordinance and to finance the capital and administrative costs directly related to completing the designated projects. (b) The local sales and use tax imposed by this Ordinance shall terminate at the earlier of: (1) twenty-five years; or (2) when the City Council determines that $37,000,000, plus an amount sufficient to pay the costs related to issuing bonds and interest on the bonds has been received from the local sales and use tax imposed by this Ordinance to pay for all the capital and administrative costs directly related to completing the designated projects. Any funds remaining after payment of all such costs and retirement or redemption of the bonds shall be placed in the general fund of the city. The local sales and use tax imposed by this Ordinance may terminate at an earlier time if the City Council so determines by ordinance. Section 7. Agreement with the commissioner. The city may enter into an agreement with the commissioner regarding each party’s respective roles and responsibilities related to the imposition, administration, collection, enforcement, and termination of the local sales and use tax imposed by this Ordinance. Any such agreement shall not abrogate, alter, or otherwise conflict with the state sales and use tax laws and rules, this ordinance, or Minnesota Laws 2021, 1st Special Session, Chapter 14, Article 8, Section 15. Section 8. Summary publication. The following summary is approved by the City Council and shall be published in lieu of publishing the entire ordinance pursuant to Minnesota Statutes section 412.191: Pursuant to a voter-approved referendum, the city is authorized to and will impose a local sales and use tax of one-half of one (0.5) percent on retail sales made after April 1, 2023 to be used to fund certain designated projects related to the construction of a new Public Works facility and the expansion and remodel of the Police facility. 3  Section 9. This Ordinance shall be in full force and effect from and after its passage and publication. Voting For: Mayor Paul Reinke, Council Members Jake Ingebrigtson, Susan Olson, Colleen Swedberg, and Kevin Zabel Voting Against: None Passed by the City Council of the City of Oakdale, Minnesota, this 20th day of December 2022. ____________________________________ Paul Reinke, Mayor Attest: ____________________________________ Sara Ludwig, City Clerk 4  REQUEST FOR COUNCIL ACTION Meeting Date: December 20, 2022 Advisory Board/Commission ☐ Open Forum ☐ Requester: LP Award of Bid ☐ Other: ☐ CA Approval: CV Consensus Motions ☐ Public Hearing ☐ Department: ADMINISTRATOR’S REPORT ☒ Title: Authorize Publication of Ordinance No. 891 by Title and Summary BACKGROUND The City of Oakdale Council intends to adopt Ordinance No. 891, an ordinance enacting a local sales and use tax of one-half (0.5) percent on retail sales after April 1, 2023 at the December 20, 2022 Council meeting through separate Council action. The ordinance is pursuant to a voter-approved referendum. The ordinance states the City is authorized to and will impose a local sales and use tax of one-half of one (0.5) percent on retail sales made after April 1, 2023, to fund a new Public Works facility and the expansion and remodel of the Police facility. STAFF RECOMMENDATION Staff recommends that the City Council approve Resolution 2022-140, authorizing publication of Ordinance No. 891, by title and summary. CITY COUNCIL ACTION REQUESTED It is requested that the City Council waive reading and adopt Resolution 2022-140, approving the summary publication of Ordinance No. 891, by title and summary. Attachment Resolution 2022-140  CITY OF OAKDALE RESOLUTION NO. 2022-140 AUTHORIZING PUBLICATION OF ORDINANCE NO. 891 BY TITLE AND SUMMARY WHEREAS, the City Council of the City of Oakdale on December 20, 2022 adopted Ordinance No. 891, an ordinance enacting a local sales and use tax of one-half (0.5) percent on retail sales after April 1, 2023; and WHEREAS, Minnesota Statutes, section 412.191, subd. 4, allows publication by title and summary in the case of lengthy ordinances or those containing charts or maps; and WHEREAS, the City Council has determined that the following summary would clearly inform the public of the intent and effect of the ordinance. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Oakdale that the City Clerk shall cause the following summary of Ordinance No. 891 to be published in the official newspaper in lieu of the entire ordinance: PUBLIC NOTICE On December 20, 2022, the City Council of the City of Oakdale adopted Ordinance No. 891, an ordinance pursuant to a voter-approved referendum. The ordinance states the City is authorized to and will impose a local sales and use tax of one-half of one (0.5) percent on retail sales made after April 1, 2023, to fund a new Public Works facility and the expansion and remodel of the Police facility. NOW THEREFORE BE IT FURTHER RESOLVED by the City Council of the City of Oakdale that the City Clerk keep a copy of the ordinance in her office at city hall for public inspection and that she post a full copy of the ordinance on the City’s website and in a public place in city hall. Voting in Favor: Mayor Reinke, Council Members Ingebrigtson, Olson, Swedberg, and Zabel; Voting Against: None. Resolution duly seconded and passed this 20th day of December, 2022. ________________________________ Paul Reinke, Mayor Attest: ________________________________ Sara Ludwig, City Clerk