Citywide 20-year, 1% sales tax now in the hands of East Grand Forks residents

May 31—EAST GRAND FORKS — For East Grand Forks Parks and Recreation Superintendent Reid Huttunen, legislative approval to move forward with a

20-year, 1% sales tax increase

for improvements on city recreational facilities is an exciting step in the process.

"I'm excited that our citizens, who have shared a lot of input over the last couple of years about what they want to see in these projects, are finally getting a chance to be able to vote on it," Huttunen said.

The sales tax proposal was approved at the end of this year's legislative session as part of a larger tax finance and policy bill. Revenue will go toward improvements on the city's VFW Memorial Arena and Civic Center. With the OK from the Legislature, a citywide vote will occur in November 2024.

Discussions on the needed improvements for the facilities began around 2018. In 2020, the city sought approval for a

30-year, 2% sales tax

from the Legislature, but the COVID-19 pandemic placed a hold on local-option sales tax proposals through 2021.

Last year, a 20-year, 1.25% sales tax proposal was presented to legislators, but a decision wasn't reached before the

end of the session

.

Now, the 20-year, 1% sales tax is estimated to generate $22,440,004, of which an estimated $14,745,000 would be available for construction funding. If the sales tax is approved by voters and generates $14.7 million before 20 years, the tax would sunset.

The current sales tax rate in East Grand Forks is 7.125% — state tax makes up 6.875% of that, while 0.25% is a Polk County transit tax. If the 1% tax gets voter approval (thus increasing the tax rate to 8.125%), the total tax on a $10 purchase would be 81 cents, up from 71 cents.

Some of the proposed improvements on the facilities include replacing indoor air handling units, work on parking lots, replacing the refrigerant system in VFW Memorial Arena and ensuring the facilities are compliant with the Americans with Disabilities Act.

Assuming construction doesn't take place until 2025, of the $14.7 million, $6,745,000 would be slated to fund improvements at the Civic Center and $8 million would fund improvements at the VFW Memorial Arena.

Those numbers, however, are just early estimates.

"For now I would say that's about as good of a number as we're going to come up with," Huttunen said. "As we go through the next year and a half leading up to a vote, we certainly plan to continue to look at the project, the scope of the project and what the potential cost will be."

Money generated from the sales tax also won't cover some of the other proposed projects. Among them are improvements to the baseball complex at Itts Williams Park, including installation of new field lighting and poles and complete ball field construction. Additional improvements — including a building addition/lobby renovation in the Civic Center, along with additional lighting and plumbing improvements at the VFW Memorial Arena — also aren't covered within the estimated tax revenue.

During their

May 23 Work Session meeting

, City Council members considered requesting bonding bill support from the Legislature for those projects. If council members agree to move forward with a bonding bill request, the deadline is next month. The bonding bill would then receive a decision from the Legislature in 2024.

Fundraising, along with the potential for naming rights, also has been discussed.

Huttunen said the master plan also needs to be reevaluated to further determine project costs and see what projects may need to be eliminated, depending on funding.

"In the coming months, we'll start getting our building committee back together for some of these types of planning meetings and bringing more discussion to City Council, just to really fine-tune what our approach is going to be as we lead up to this vote," he said.

In 2024, Huttunen said, work will be rolled out to spread information and ensure residents are aware of the proposed projects and sales tax. One goal is ensuring everyone, including residents who may not use the facilities, are aware of the need for improvements.

East Grand Forks residents have decided on a citywide sales tax before. During a

mail-in special election in 2016

, voters approved a 1% citywide sales tax that brought in around $2.2 million to repay a loan the city took out to make improvements on the swimming pool at Sherlock Park.

Of the responses, 1,237 voted in favor of the sales tax and 523 voted in opposition. That sales tax ended in 2020.

While the 1% sales tax in 2016 also needed approval from the Legislature, the process at the time was reversed. Back then, residents voted first, before the proposal was presented to legislators.

"The community got behind that project in a great way. even with some grassroots fundraising to help support it even further," Huttunen said. "That's certainly my hope and my feeling as we lead up to this one. I know we've got a lot of really passionate residents about these projects. They're excited about the improvements that we'll see to our recreation facilities in really being able to make them be better equipped to serve our community in more ways than just ice boards, and making them more year-round type recreation facilities."