The Park Rapids City Council discussed the possibility of a city sales and use tax in a workshop Tuesday, Oct. 12.

City Administrator Angel Weasner distributed copies of the Minnesota Statute controlling local sales taxes, as well as a reminder from the League of Minnesota Cities about the steps in the process of establishing a local sales tax.

The current statute allows cities to impose a local sales tax only to fund capital projects that have a “clear regional benefit.”

According to the LMC’s reminder, the city must adopt a resolution proposing the tax and submit it to the taxes committees of both houses of the Legislature by Jan. 31.

The reminder also cites the opinion of House committee chair Rep. Paul Marquart (DFL-Dilworth) that “regional benefit” only applies to “above the ground” projects – not streets or utilities. Last year, the reminder says, 20 cities requested sales tax authority from the state, but none of the requests were granted.

Newsletter signup for email alerts

Council members agreed not to be constrained by Marquart’s interpretation.

Mayor Ryan Leckner said the city’s finance committee felt a sales tax was the only way to fund needed street projects while keeping residents’ taxes down. “We do believe this is regionally significant,” he added, “because of the type of city that we have, where we bring so many more people in in the summer and our costs go up. So our thought is just to give it a shot.”

Council member Erika Randall said local legislator, Sen. Paul Utke, would likely support the city’s request.

Council member Tom Conway asked whether the city could use the sales tax to fund above-ground projects and apply the savings toward street projects. Weasner said she hasn’t come up with any ideas like that.

“Maybe you could do a community center,” Leckner said, “and it would pay for it, but in the long run, we’re paying people to operate it; we’re paying to heat it; so, it’s gonna cost the citizens.”

Randall asked about putting park improvement projects in the proposal, but Leckner said the city’s park projects probably wouldn’t be enough.

Asked about American Rescue Plan funds, Weasner said the city is putting this year’s allocation toward its new financial system and the infrastructure for a workforce housing neighborhood. Next year’s allocation, she said, could go toward the Fair Avenue project.

“I say to go for it,” said Randall.

Leckner confirmed with Weasner that the tax proposal could target a plan for road projects over a period of time, such as 20 years.

Weasner said she will work on the resolution and try to have it available for council action by December and will communicate with local legislators about it.

Tobacco ordinance

Weasner also reported the city needs to approve a “Tobacco 21” ordinance, since the state raised the legal age for the sale of tobacco to 21.

“We need to have a city code that is compliant with that,” she said, adding that the police department wants an ordinance regarding drug paraphernalia.

Noting that developing these ordinances will require legal work and expense, Weasner said she wanted to verify that it had the council’s support.

Police Chief Jeff Appel explained that a lot of Minnesota cities are adopting these ordinances to close gaps in state law – for example, prohibiting the sale of clean drug paraphernalia, such as glass pipes and smoking devices that are clearly designed for ingesting controlled substances.

“There is no statute that covers that right now,” he said, though he noted there are laws against possession of drug paraphernalia that holds residue of controlled substances.

Appel said ordinances of this type, adopted by Moorhead and Dilworth, have withstood legal challenges. “Basically, cities are making a stand that they don’t welcome this type of sale in their community,” he said.

He ran these ordinances by County Attorney Jonathan Frieden, and Appel said Frieden told him he would support a similar ordinance.

Appel said Hubbard County recently updated its tobacco ordinance to prohibit both sale and possession of tobacco under age 21. He called this a stopgap, noting that while Minnesota increased the legal age to buy tobacco to 21, it eliminated the possession statute.

“We could have a 15-year-old in school with tobacco, and we can’t charge them with anything,” he said.

Appel said the ordinances would send “a message to all the youth of Park Rapids, and the city of Park Rapids, that we don’t want this kind of thing in the city.”

Randall admitted that she struggles with the concept of citing people over age 18 for smoking. Leckner and Conway also questioned whether the possession ordinance needed to go all the way up to age 21.

“I really do question citing a 20-year-old for possessing cigarettes,” said Randall.

Conway seconded the sentiment, saying he wasn’t going to card potato plant employees smoking in the designated area.

“Our focus is in the schools,” Appel said, acknowledging that an ordinance prohibiting possession under age 18 would help in that area.

Council members voiced general agreement for Weasner to move forward with developing the ordinance, with legal review by the city attorney before it comes before the council for action.