Wayzata Council Rejects Local Option Sales Tax Priority

General Interest
Meeting Date: Wednesday, February 19, 2025
Story generated: Jul 2, 2025
Focus: City council rejection of local option sales tax in legislative priorities

The Wayzata City Council voted 3-2 Tuesday to reject adding a local option sales tax to the city's 2025 legislative priorities, maintaining focus solely on a food and beverage tax for potential revenue diversification.

Council members Alex Pish, Jeff McDonald and Jeff Senson opposed the broader sales tax, citing concerns about burdening residents and local businesses. The vote means the city will continue pursuing only food and beverage tax authorization from the state legislature, as approved in January.

Just because we can raise taxes doesn't mean that we should," said Council Member Pish, who pulled the item from the consent agenda for separate discussion. "I am philosophically opposed to this.

Mayor Dan Mullen and Council Member Parkhill supported including both options to maintain flexibility. Mullen argued that property taxes currently burden local businesses with $13-20 per square foot in rent costs, making sales tax a potentially less harmful alternative. "It is not sustainable to continue to pound on our property taxes," Mullen said.

The council also heard presentations from the Wayzata Lions Club and Ernest Aselton American Legion Post 118 about their charitable gambling operations. The Lions Club reported gross revenue of $4.8 million in 2024, contributing $63,000 to fire relief and $50,000 in community donations. The American Legion, in its first year of pull-tab operations, generated $382,000 in seven months and donated $66,500 locally, including $20,000 to the city for fire equipment.

This story was created by artificial intelligence (a large language model) based on the proceedings captured in the video below.

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Meeting Analysis

The Wayzata City Council held their February 18, 2025 meeting, featuring presentations from local charitable organizations and a significant debate over tax policy. The Lions Club and American Legion Post 118 presented updates on their charitable gambling operations and community contributions. The main controversy centered on whether to include a local option sales tax in the city's legislative priorities, which ultimately failed in a 3-2 vote.

Source Document
Focus: Original document text

e uh call the order welcome to the February 18th 2025 city council meeting I hereby call the meeting to order members of the public May attend the city council meeting in person or may watch it remotely by viewing the meetings on Channel 8 WC CV and at the city's website at weta.org WCTV public comment during the public forum Andor public hearing portions of the meeting may be provided in person at the meeting in advance or by logging into the teams call and raising your hand during the public hearing when your name is called in the meeting you will be seen and heard in our council chambers and the cable channel and online you will be asked to unmute and then you may begin your comment all public comments must be uh include your full name and address second item on the agenda is the Pledge of Allegiance if I could ask you to stand if you're able and follow along I pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God indivisible liberty and justice for all okay the next item on the agenda is roll call let the record reflect that all uh council members are present and I will note earlier this evening the council participated in a workshop and reviewed and discussed the following discussion of a draft of a neighborhood engagement initiative presentation uh by uh the leads of our boards and commissions annual reports and work plan inclusive of the energy and environment committee parks and trails Heritage preservation boards Housing and Redevelopment Authority and the Pana District committee and then the last item on our Workshop earlier tonight was discussion of the proposed local tax sales tax use an engagement plan uh with that uh we're going to approve the agenda so may I have a motion to approve the agenda as is or would anyone like to make changes I'll move to approve the agenda as is Mayor it's misbehaving anyone have have a second second that motion yeah any so we moved in second and do we have any further comments on on it okay all in favor say I I I okay the motion passes so the next item uh on our agenda is the approval of the consent agenda on the consent agenda tonight is approval of city council workshop and reg Mr Mayor yeah sorry I think public forums before oh did I miss one yeah thank you thanks for that correction uh the next item is the public Forum um do we have anybody online or cards for the public forum Mr Mayor we do not um other than the uh the special guests on the agenda okay so why don't we um do this just because of how this is going to go let's do consent agenda first and then we'll have our two presenters in the public forum and then we'll move on to our regular agenda so so well it does because we're going to do the consent agenda then we're going to have a public forum you're going to pull an item from the consent agenda and then we'll have it on new business so next item I'd like to take is approval the consent agenda on the consent agenda is approval the city council workshop and regular meeting minutes uh from the 28th of uh January approval of the check register approval of the municipal licenses receipt of the police activity report receipt of the building activity report authorization to solicit bids for the 25 mil in overlay and water main Loop project authorization to solicit bids for the 2025 bi sanitary sewer line project adoption of resolution 0425 ad accepting a donation from the Wisa Conservancy for the panaway project and approval of an amendment to the 2025 legislative priorities uh questions discussed so um take a motion for approving the consent agenda or uh amending it Mr Mayor I would like to pull item I approval of amendment to 2020 legislative priorities for a separate discussion and vote sure that would be fine so with the adjustment I would take a motion for the consent agenda having that item pulled to the new business uh partion of our meeting so moved second all in favor I I okay that masses um next I'd like to come back to public forum we have two people um or two individuals and representative of two entities for the public forum um as a reminder um when you come to the podium please state your name address and indicating if you're presenting to a group and if the item you wish to speak about is on the agenda fill out a form at the table for those who are watching on teams you can send a note to Cha staff if you want to uh talk about the one item on our agenda so to proceed with our public forum we're going to have an update from the wisett allons on charitable and gaming contributions throughout the city I'd just like to offer a couple comments about the Lions and then we can take it away so the Lions Club is actually the world's largest service Club organization with over 1.4 million members in approximately 46,000 clubs in more than 200 countries and areas around the world uh the local chapter was established here in wetta 1952 things that they focus on for our community are the pull tabs and proceeds from the pull tabs which I think we're going to talk about tonight numerous grants in support of Charities wisett a high school scholarships uh they have an eyeglass collection program with 19 sites in our community that pull in over a th glasses a year they have an annual waffle breakfast which I believe is coming up very soon on Saturday February 22nd I'm sure they'll be talking about that at St Bart's Church they are volunteers extraordinaire they they volunteer James J Hill day's iocp Feed My Starving Children semiannual 101 Highway cleanup American Diabetes bike tour tour to Tonka Salvation Army Bill ranging holiday nut cell uh organize the letters to Santa to light up the lake celebration um so with that I'll turn over to the city manager and then they'll introduce our speaker for tonight thank you Mr Mayor appreciate that uh helpful context because uh it's it's easy to forget all the great things the Lions uh do in this community and and Beyond uh so I'd like to call up um uh Tim Anderson and Nancy Nelson Macintosh of the Lions I asked uh both Tim Nancy and and then representatives from the legion to come tonight to um not only promote and give an update of all the great things they're doing for the community but also give an update on how the last year went this is the first full year after um charitable gambling pole tabs was approved in another location so getting an update from them and also an opportunity to share with the community all the great things that they're doing around the the area uh so with that I would ask uh Miss Nelson McIntosh Mr Anderson to come up and they've got a little bit of information to share with you tonight welcome are you sure all right so I'm H Nancy Nelson MacIntosh and my uh I'm the gambling manager for the wiet alliance my address you need it 1201 edland Place Minneapolis so I'm kind of an outsider although I've been intimately acquainted with WIA for a long time uh as my my dad was uh involved for many years so um I think I'll what I'd like to do if this is um okay Tim will talk about some of the donations and some of the things that we've uh places we've uh donated to and uh activities and I'll give you some of the financials um uh if and having said that we operate on a June 30th fiscal year uh end which so as I was parsing all the numbers trying to you know giving you a 20 24 number was a little um not challenging but it's just not the entire picture so if I can uh tell you a little bit about our um our current fiscal year which is 25 we just completed seven months and our total gross revenue was uh 26 uh 2, 96,4 46 our net receipts so that's the gross is gambling accounting is kind of different than normal humans do but um so they'll take the gross receipts subtract out the prizes and then our net receipts um which then go to expenses and things but it's uh uh 3 55,56 comp compare that to a year before the same seven months so I you tried to make it equal our total gross revenue um was a three or 2,378 351 so a nice increase and our net receipts were 33,35 to that whole uh prices redeemed is kind of a um it's an interesting um number and it changes from time to time uh or month to month I should say so our calendar year 20 2024 our revenue is 4,815 935 so it was a nice year um in terms of Revenue uh our fiscal year revenues for the last well for the year prior were uh a little over $4 million and the same for the year before but they've been increasing so it's really been a um I mean it's the trajectory is right in in our our estimation um the donations um so uh our estimated donations to wetta and so we have kind of I there are kind of three buckets there's the Fire Relief contribution there is the contribution we make through rent to the your general confers or whatever category you place that in and then I think then it's the broader Community which is a little bit more morphous but so uh our estimated um uh 20 our fiscal year 2025 was 63,000 for the Fire Relief we're estimating about 50,000 um and we just made one payment in the fourth quarter of this year of this past year uh in for $10,000 and and we try to make uh donations on a quarterly basis so for some organization then we can also keep track of where we are with um with our revenues Etc now our rent this past year was $21,000 so it's considerably higher than than it was and I'll show you so the year before um our total contributions uh for chable contributions were 125 250 the Fire Relief was 50,000 and the and our rent was 6,000 so one of the things that changed with eabs is that we um we didn't have a um Bonafide lease we had kind of a handshake lease with uh with the city uh and when with eabs we had have a formal lease which we executed and they have a formula and um of you know where you are with e tabs paper tabs or any other gambling um entity or um operations excuse me I've got a little bit of a sinus infection and um and so but that but that it maxes out at $1,750 a month so when when I talked to Jeff about the the contract um know we because we were looking at moving up from $500 a month to a th000 and then I said here's what's going to happen with eabs you'll max out just based on our Revenue so um uh so so that when I look at kind of the tangible Fire Relief the tangible City contribution and then we can talk about donations too just by way of um of uh comparison we the year before our total was 136 223 for the our our terrible contributions the Fire Relief receiv received 7,400 and the rent was 6,000 so it varies a little bit depending on our expenses and um and some other things you could certainly see on our tax return which are um which are public so um I I think I'm just going to leave it up to you Tim to sure come up with a or talk about the the actual donations but any quick questions or you want to hold them to later why don't we have the second presentation then we'll open up the questions by by Council thank you uh my name is Tim Anderson I'm a long time resident of y z I live at 316 Ridge viw Drive been there since 1981 I've been a lion since approximately 2000 I've been president for probably four or five years now and probably about 10 years all together but anyway um our club is a small club we have about we had about 20 members up until about a half a year ago and luckily and through some hard work we uh um we have five new members so we're really excited about that and they're they're younger members CU we are an older Club so um there can be some challenging things for us to do physically that we used to do you know 20 years ago that we really can't do too much anymore but mayor Mullen did touch on some of our kind of boots on the ground volunteer things that we do we don't want to just be a club that sits back and says well we'll just you know have the revenue from our lawful gambling come in and we'll just donate it to several different charities what we try do we have a board meeting at the beginning of each month and our criteria is let's try and donate as much locally in the Yetta Plymouth area as we can so um pretty much every every year we get together and and uh sometimes we get requests for different donations that maybe we haven't the years before but um we do like to give to iocp wi Zetta parks and trails we've given to for when they did um some of the new um Park equipment down at the beach boardwalk senior housing um Apartments The Retreat chemical dependency facility um the hammer residences wetta education fund we give out four $11,000 scholarships to four different deserving students at the high school we do that in May um we have also give to the WIS Zetta crime prevention Coalition James day hild days Ridgedale YMCA Blue Water theater just across the street plus uh the wi Isetta Symphony Redeemer at Christian Academy wi Isetta historical society and St Bart's Catholic church and school and the Plymouth civic league which is you know help fund music in Plymouth that's what we do locally might be a couple things I missed but there's a several pages of things that we also give in the Twin Cities area and Beyond and I don't want to stand up here and go through all of them because there's a lot of them there's like five pages of them W so but we do give to can do canines you've heard of them I'm sure courage Kenny rehabilitation institute paraplegic program Damascus way which helps people that were incarcerated to come back into society and fit in with trying to find a job and that type of thing Feed My Starving Children we've been there several times um we've given them donations plus we've packed up food um free bikes for kids we've um helped out with that a couple of times hearing loss Association of America and the Twin Cities chapter home wordbound hope chest for breast cancer GI to juvenile diabetes research Leader Dogs you know I could go on and on um we we try and do as much that emphasizes sight loss um education on Diabetes hearring loss um that type of thing because that's kind of what the lions were founded on so that's what we try and focus on um we do also give to Second Harvest Heartland and feed my I mentioned Feed My Starving Children so um Special Olympics is another one that's near and dear to our heart and we help with vision screening when there's a um sometimes in Still Water there's a Special Olympics um function going on there and we help with vision testing for some of those folks that are um involved with uh Special Olympics so it's it's it's a lot of fun it's it's rewarding and it's just our hope that going forward our desire and we want to to uh continue being a part of the community and being part of service to the community and you know we're always we're always looking for new members so if anybody's ever interested in finding out more about us you can visit our website and uh hopefully we'll we'll be around for a while and this has worked out well and I think it'll work out for quite a few years to come great thank you for your service uh questions of our friends from the Lions by Council any questions question again thank you so much join I'm sorry oh yeah go ahead if you want to make a comment just oh you're asking if we want to join anybody would like to opt in yeah no and if anybody's interested in the waffle breakfast this maybe maybe isn't appropriate but it's at 8:30 to 11:30 at St bar and you don't have to have a ticket I do have some tickets on me but uh and it's Saturday February 22 we also use that money for community service and funding some of our project great vision screening free vision screening for kids great thank you again for your service and for the update tonight thank you okay next we're going to have a presentation from the Ernest aselton American Legion Post 118 um which was established and was that just after World War I um throughout its history it's been a community Gathering Place known uh for dances picnics parties I've had a few parties there actually for full disclosure the legion is active in our community today hosting class reunion as well as making donations to many organizations including Boy Scouts of America dare Toys for Tots Gillette Children's Foundation and many more I actually went to a fundraiser up there a few weeks ago for Hope kids and spent some time with Commander Jerry asrv and Club Manager David lunberg it's a great place it's open to the public and welcoming to the public for food and drink for there many events like taco Tuesday Bingo night meet raffle to name a few um I'm actually a member of the American Legion and I wanted to point this out because I didn't know this until a few weeks ago here's my little card um you can be a member of the American Legion even if you haven't served in the armed services so I I uh entered through the son of the American Legion um so past active duty military can become members and their descendants my 90-year-old Father Jim served in the Army Western Division of North American Air Defense command Artillery Brigade in Hanford Washington in the late 50s and so I joined on behalf of that I would like to recognize my colleague um Alex pish for his uh distinguished service in in our armed services and anyone else here that has served in the armed services and I'll turn it over to the uh city manager U to introduce our speaker thank you mayor well appreciate that uh yes I'd like to introduce Kirk zaruk he uh heads gambling at the legion this is their first year of heading uh charitable gambling with pull tabs so uh wanted to to um invite him to not only tell how the year has gone but also provide more details about all the great stuff they do in our community as well K zaruk 1310 hold rdge terce um and I've been here since 1984 and I love the way you introduce that you don't have to do much it's very good um so we got gambling as far as pull tabs okayed here last year how about this time and we started on March 5th and to give you an idea how it's gone uh and again Nancy mentioned the the fiscal year it's from July to the following June and our fiscal year for the wisett legion is May well it' be June through May so when we received uh the okay to have poll tabs our 24 12month period our gross revenue was $372,000 now we go to the the Year we're at right now the seven months we have 382,000 that's 7 months so in not much more than half the time we've made more money gross and those numbers are goofy because that 382 000 we have 58,000 Reserve where we had no Reserve before so we're making now about triple what we were before uh so the like Nancy was saying the numbers are goofy the taxes are goofy so I said well let's make this simple and I uh I took the last three months and I'll tell you what we did gross I'll tell you what we did in net and what we did is average a month now we're doing 200 $21,000 a month gross we're netting 37,2 60 bucks now that net gets taxed and then your expenses come out so we're doing a heck a lot more than we did before and we we donated in 80 or um 23 which would be midway 23 through 24 we donated $558,500 and we had a five-star rating and we were the sixth best donating for expenses we're at 78.5% was donated so we're doing really well back then but now with these we can do we did 66,500 by the end of this last year in the 7th month period we did more than we did the year before and we still $100,000 in the bank we gave the state or the the city $20,000 in January so that pretty much was for the first partial year we had so the overview is we're doing really well what was the purpose of the 20,000 what did we use it for to theity fire fire equipment essentially okay great yeah we just uh we going to give give money to the city and and like hey good good neighbors and we just want to make sure everyone's doing well as far as where we donate the money the local and National that is really low overhead management is who we donated to our major is to the veterans though so our veterans we are donating a little more than half to the veterans and now we have some money there that we can actually take cuz we have till May to figure out where we want to really concentrate our donations because we already donated more this year than we did last year so that's going very well um just trying to cover the questions on here um as far as the locally we have baseball the uh Legion Baseball Plymouth wi Isetta baseball we give them money um crime relief Association or the crime relief we definitely give money to and there's quite a few different ones like you had mentioned earlier and I know we just I just got a call today from the guy that heads up the state Legion softball wants to get me involved or our club involved with uh donating to the Wi Zetta Plymouth fastp softball and I said you give my number we'll be more than happy to do it so I guess overall we're very pleased I hope the city's pleased the Lions we have always appreciated you and I I think it's done good for both of us I really do uh the one thing that's interesting and I of our gambling of that 37,000 a month or so that we are getting net 177,000 of that's electronic gambling on our end it's probably changed on your end and the um AR Bingo program which I think is as good as any one around uh we're still at about 22 to 23% of our overall and then we do have the meat raffling stuff and that's why we had about 25% between what we used to do so I thank everyone for letting us have the opportunity and uh we're going to donate as much we can locally and to uh foundations that don't have huge administrative cost that's what that's what we're looking at thank you any questions uh by Council of our friends at the legion go ahead this isn't really a question it's more of a comment or observation kind of straddling both of the two organizations I think one of the concerns we had when we were debating this was that there would be some cannibalization between the two uh real concern probably more for you because you didn't have anything yet but from listening to both it looks like not only did it not cannibalize it seems like it reinforced each other uh that's a tremendous result that you just talked about and I'm pleasantly surprised about that and the bottom line is I think the community has benefited from that so thank you for that well thank you for the opportunity any other comments no just again uh thank you to the Lions and the lead for your extraordinary community support and for managing charitable gambling in a way that benefits both the city of wi and other local charities so thank you very much um so City maners do we have anyone on teams that wanted to comment in this section Mr Mayor we do not okay next um is new agenda items does anyone have any new agenda items to bring up anyone okay so now we're going to go to our new business there was no new business but we did pull an item so now we're going to have a presentation and discussion of what was formally approval of the amendment to the 2025 legislative priorities um and so we are going to now have a presentation and discussion about that Mr Mayor thank you happy to answer any questions that council member plish or anybody else has off the bat um I don't have a presentation prepared for this but um just to summarize uh I think I'd be happy to provide a summary of this this agenda item um ultimately the amendment to the 2025 legislative priorities was put on this agenda because um in the first meeting in January uh we approve the original legislative priorities for this coming year at a subsequent Workshop uh in late January uh the council discussed additional information that we receiv received just based on how the legislative session was going from our lobbyist and we felt that in order to give the city the best opportunity to pursue to additional sales taxes to to benefit the the community uh from the legislature that we not only advocate for the opportunity to utilize food and beverage but also local option sales tax as well which is a broader sales tax all of this is you know to meet our overall objective to diversify Revenue to offset uh property taxes on to our our residents um and and pursuing both of those Avenues will give us greater flexibility as we move down the road right now there is a moratorium on all sales taxes so nothing's going to happen until the legislature decides to lift that moratorium which will not likely happen until at least May so um we can still pursue this we can still get ready if they do lift it but we won't have any action from the legislative side until May or June and then um ultimately a resolution would need to be approved with more detail kind of highlighting what the city's really advocating for you know specifically um so happy to answer any questions this is just an amended legislative priority sheet that the council should put their stamp on it so I just have a couple other uh context comments and then we'll turn it over to council member pish who wanted to have a discussion about this but again it was on our agenda and approved uh at the first meeting of the year uh we subsequently received feedback not only from our lobbyist but from Senator Johnson and representative aam that the legislature uh was having trouble uh determining their path forward on whether or not they were going to allow food and beverage or a local area sales tax so both are not allowed at this point so the advice from our lobbyist and from Senator Johnson and representative acum was to uh there's no way to move forward currently um so the options that might happen at the capital is they'll change the existing legislation they'll go back to what was on the books previously and lift the moratorium or they may remain on hold and so the feedback we received was we'd be in a better position to advocate for both food and beverage and a local area sales tax we discussed that in Workshop um at our first meeting in February uh and had a discussion and discernment process that agreed to move forward it was then put on the agenda tonight um and now we're going to have a conversation about it at the meeting and so so with that I'll turn it over to council member pish thank you Mr Mayor so predating this Council we we actually debated this quite extensively uh last year and one of the things that we considered was it's not a local area sales tax it's a local option sales tax there's a distinction there um we've we decided at that time that we did not want to do a local option sales tax that we would go with a uh a food and beverage sales tax because fewer of the Yetta residents would be impacted by that versus the other where many more uh Yetta residents would be impacted I wanted to pull this because number one to talk about the history of this but what we're doing here is we're authorizing Focus for our lobbyists which would do good things for us but I am opposed to the local option sales tax I am opposed to it in theory if it came back to us as an option I would be opposed to it at that time uh I'm not in favor of raising taxes on our residents to the extent that this would do it so almost doesn't matter to me whether we get this or not I would be opposed to it if it came back to us uh so I wanted to pull this to put it on record that I oppose this I'm not opposed to any other other legislative priorities but this particular one in here I am opposed to so I'm going to V vote against this unless we can pull it and go forward with just the food and uh beverage tax happy to take other comments yeah sure thank you council member fles would anyone else like to make comments on on this as it is in our uh packet to move forward with this if you don't mind uh Mr Mayor I would too uh similarly to council member pish I too support the food and beverage sales tax over the local option sales tax to me it's a burden more so on our residents but also I think would impact some of the local businesses and I'm very concerned about the community's um desire to have a thriving commercial core so without enough information on how it would impact residents and local businesses I to do not support a local option sales tax and we'll vote against it okay comments from others council member Park yeah I'd like to say that this having this as a legisl legislative agenda item it only means that it gives us options that we can U choose whether we want to in the future to have a local area um local option sales tax or a food and beverage tax or none of it but we just need to make sure that we're ahead of the game by communicating well in advance when this comes around and you know this the state gets their act together and decides that we do have choices here we need to be prepared and be able to react to them so that's what we're doing now is saying go for it let's see what we can get and then um once we determine that we'll be ahead of the game by having already having having had Communications with our businesses with our constituents and I think that's a really important step so that we're not caught uh on our heels again okay other comments um yeah I don't I know we talked about this a couple weeks ago um it came up quick and um we made the decisions we did to move it uh ahead with these priorities um as I thought about it more though I I'm I'm in agreement with the priorities we've we we've outlined here but um I think I think the food and beverage tax tax is much more consistent with what we've um the conversations we've had in the community about making sure that uh taxes that we enact new taxes we enact um do the best job we can about having visitors pay for those services and um I think the fact that it offers more flexibility um it doesn't require a referendum um at this point I'm comfortable supporting this if we would exclude the local sales tax or the local option okay so I have a couple comments um so much like council member Park Hill this is nothing more than just preserving our flexibility and I think for context um our local businesses are burdened heavily by property taxes if you talk to our uh retailers they pay a significant amount of their rent in tax whether you're a restaurant whether you're Walgreens whether you're whoever and it's not sustainable um to continue to pound property tax which directly takes profit out of those businesses and I have personally spoken to at least 15 local business owners since we began this journey in January not one of them um after they heard what we planned on spending the money on public safety and Parks um resisted it they're not crazy about it they they you know a tax is a tax a half percent on a $100 ticket is is. 50 um so it Gins up potentially um between $4 and $800,000 depending if it's food and beverage or local option sales tax and to be really clear we have no option right now to proceed with anything so today we can't even do a food and beverage tax and so um I don't see any reason to limit ourselves to have options to explore at the capital second part of what we learned from the last few years is when we didn't robustly Engage The Business community and they didn't understand it they got upset and they contacted their lobbyists and began to block us at the capital so part of this plan when we approved it in January was to have robust Community engagement to walk it out and discuss in detail every option with with the local business Community explain why we were going to pursue both options so that we could walk through either door if it was presented to us so I would uh support uh as presented uh what what we adjusted based on our state house representative our Senate uh representative and our lobbyist that this puts us in the best position furthermore um if you look at our operating expens over the last four years um they've been up by close to $2 million um and so we're spending more we're jamming more on our residents we're jamming more on our local businesses in property tax which is 70% of our our take to our general fund so uh under the Strategic plan approved years ago and affirmed again we said we were going to pursue alternative Revenue sources and this fits very nicely in it and I don't see the point and I actually don't agree in any way that it somehow is better for the residents to have only food and beverage I understand that the sales tax data that was presented to us had ranges of numbers estimating the number of local people that went to restaurants versus stores to me that's a moot point at a half percent we are not talking about a meaningful number to the ticket and it is unsustainable we talk again and again and again about how we want retail here how we want to make retail successful what can we do to make retail successful what we can do is reduce the burden of property tax and Achieve that Revenue in a different way and the last comment I'll make is we don't have a sustainable funding source for Public Safety in in our Capital plan to uh either rehabilitate or build a new police station in the future in a long ball we don't have an ongoing funding source for our park and Trails program if we move forward uh later this year with spending over $2 million on clage Park we completely drain the entire Parks fund and we don't have a sustainable funding source for Parks so if you elevate the conversation up a level to say why are we exploring it the drivers are being wholly dependent on property for commercial and residential is not sustainable number two we don't have a ongoing funding source we'd have to raise the levy to do a police station we'd have to raise the levy potentially to fund our Parks better so this is just an option and I would strongly support at least advocating for it and choosing to walk through the door if it's presented to us so I want to go on record saying uh supportive of this and we don't have the ability to move forward the food and beverage tax so we can talk about these hypotheticals that food and beverage is preferred we can't do food and beverage today of any way so that's why I'm supportive of doing it and so I guess I would offer any other questions or comments of staff and I think we'll then have a discussion on how we might approach this well I'd like to weigh in again just because we can do this doesn't mean we should and just because we can raise taxes doesn't mean that we should and I am philosophically opposed to this um I would offer a motion that we pass this forward without that piece because just like the argument that I made about cannabis where I voted against every opportunity spending money the city's money on a study to say what it would mean to the city to get in the business of cannabis I personally didn't care how much it said we shouldn't be in the business so I voted against all the money we spent there because no matter what they came up with I would vote against it as did every one of your colleagues the council overrode me on that and eventually we did toss it out okay this was debated in quite extensively last year um a hundred times more than we have this year okay we we talked about this in great detail and at that time the council was opposed to this idea I'm opposed to it tonight and based what I've heard of my colleagues tonight I think we have a three to vote three to2 vote against this one particular piece so Mr Mayor I would like to make a motion that we pass this legislative priority without that one piece and have just the rest of it so that would be my motion okay before we move forward to a motion I think we have to provide some more context exactly what we're passing because the second part of that I just want to clarify is that we have an engagement plan so depending on how how we decide um on whether or not um a local option is included or not the second part of what's in our packet and I just want to clarify um that we have an engagement plan and so no matter what we decide to pursue and we we'll have your vote and and we'll go through it the second part of it is are we okay with the engagement plan so I just want to make sure that we discuss that first and then we can have a motion about the package together and and then you can make that motion are you okay with that yeah but I'll make the point that the engagement plan doesn't change one iota with this right exactly the same so again so it's it's a mood Point well I guess since we're having this discussion in public I just want go on record is saying no matter where we land we're going to engage the local business Community we have a very specific plan by month on how to do that and that's all I wanted to clarify and make sure it was known and our stated use is even if it's just food and beverage is police and Parks so I just want to make sure that's on the record uh are we all okay with that in in the total package and then let's go through a vote on it so any comments on engagement and purpose well I think the engagement plan was in our Workshop packet and not in this packet what is now because we pulled it no uh Mr mayor council member McDonald the engagement plan wasn't an official part of the agenda item on the consent agenda for what we're talking about it's Incorporated in whatever direction we pursue will follow the engagement plan that we discussed tonight earlier this evening and um manager doll could you remind us what uh we were going to like when we passed or when we approved our legislative priorities for the food and beverage what we stated those funds would be used towards in January or last year even just generally they'd be used for both operations and capital costs of both um uh parks and Public Safety yeah I I just wanted to make sure too in in theory you know um the I think I should look at operations and I it was my understanding that it went towards streets roads streets as well yeah that sort of thing right there y yeah I mean to clear what happened last year is irrelevant to this conversation what is relevant to this conversation is what we passed in January so yes we can talk about it for context but we're not walking back something that wasn't on the agenda for what we approved in January I just wanted to clarify what the money for a food and beverage sales tax would go to words before I voted on it perfect do you have that clarification yes okay perfect M Mr M I just going to mention because the of the original approval back early January it approved the legislative priorities that we've all talked about um and not the local option sales tax so if that's the direction that the council ultimately goes we don't have to change anything because that's already approved I would say the only the motion appropriate tonight would be to uh uh consider the updated or the amended legislative priorities and seeing if that passes or not so if I may ask so just to be clear if we vote this down tonight as it is we still have the legislative priorities that include everything except this one thing and we don't have to approve that separately because we already did that correct correct okay very good that's fine so I think any further questions or comments uh well just to further clarify what I think I heard uh the engagement plan uh I'm in favor of the engagement plan if staff needs to modify that in any way um based on the vote tonight I think um you would I mean you would it would be appropriate um and then use of funds um for parks and Public Safety and operations um as we've as we've talked about identified uh my understanding is we would use it for any any or all of those yes there's more flexibility with food and beverage the the amount total generated is less but there's more flexibility okay so the only variable we're talking about is in the discussion is if we um approve um both for the uh the local option and the beverage and sales or just one or the other correct okay well not one or the other just food and beverage just food and beverage right and just one last clarification just one for the record to be clear the legislature could not a allow us to do food and beverage the the the legislature could go back and radically adjust how food and beverage is done the legislature could completely re-engineer the local area sales tax so just want to make sure that we're clear with the public I know we're clear up here what we're saying is the only thing that we'll walk through the door on is if the legislature restores the previous food beverage tax or changes the rules for the food and beverage tax and then that's what we're asking for so just that's for clarification great so I guess oh go ahead Jeff so in about a month we're going to have a conversation about the needs for a new public safety building what that's what I I haven't seen the need for that um I feel like it's premature to shoot this down because before we know if we need that building or not and if we know we need that building and we have the discussion then we don't have to vote on doing a tax now this just gives us the option to be able to do it if we deem it necessary I am not excited about a local options sales tax I am not excited about tax at all but it may be a means to an end that we need so I don't understand why we're shooting ourselves in the foot by getting rid of this option and I realize Alex doesn't want to tax at all but we may need to pay for a new public safety building I don't have all the facts but I just feel like why not include this and if we want to stop this legislation at some point we certainly can if we want to if we deem that we don't need a public safety building we don't want to rehab the one that the the public the police department that we have you know um but something needs to be done on that side apparently and this is one of the ways to do it is to have a local option sales tax that is approved by the entire Community with a referendum and and the money would directly go to XY and z and I don't see why we're taking that option away from each other council member parkel may I just offer you a a flip side reasoning is there's a couple things but one is we don't know what our needs are yet so to me it feels inappropriate to ask for something before you know you even need it and risking people's livelihoods on in a business feels like a big risk you know the mayor mentioned what is 5% of $100 half a percent half a pardon me thank you half a percent of $100 well you can't survive in wi Zetta with $100 tickets that's uh a comparison I think is isn't right on the scale cuz $100 as why we can't have coffee shops and why Zetta it's because we need to generate a certain amount of Revenue we need to sell Big Ticket items in order to pay the rent and have this thriving commercial core on Lake Street and if you can't sell those big ticket items because your customers are going to say I can do it online or over here and avoid that sales tax so I think this isn't thought out enough I don't know what the needs are and I don't know what the risks are to the business and that's why I'm not going to vote for any any other comments I'll weit into since the subject of a public safety facility came up which isn't part of our agenda tonight but since it came up uh the numbers that we saw during the workshop were so large I won't say what they were but to have a new facility was so so in incredibly large that even if we had the sales tax it would only make a small small dent in it that wouldn't be the solution to it in any case we'd have to come up with some other financing so to me that's irrelevant in this discussion um I'm going to withdraw my motion that I tried to make because it's a moot point if we vote this down then essentially it reverts back to the same thing I was trying to accomplish in the first place which is to advance our agenda as we had uh voted in before the only difference here is the local option sales tax which I'm opposed and apparently two of my colleagues here are opposed to as well so I will withdraw that motion we can just vote on the uh agenda item as it is yep so I have one last comment so if you look at what um commercial pays in their rent for property tax in this town it ranges from anywhere from 13 to past $20 per square foot which is more detrimental to the p&l of a business than any half% at $100 $500 $1,000 $10,000 and this previous administration raised our operating budget by $2 million raised the levy on average more than 10% the last four years so this body voted to raise taxes and put burden on our residents and our businesses in the form of property tax connected to the levy I'm with Council M perkl I understand you want to have the vote but I think it merits a robust debate in public to understand why some of us are for it and why some of us are against this um it is not sustainable in my view to continue to pound on our our our property taxes the sole way it impacts the cost of it you want to know why there's no coffee shop no coffee shop can pay the tax that's embedded in a rent to operate here why do we have struggle to get uh occupancy when retail the number one lever is the tax burden as part of rent and if you if you want to study that go look at what you pay in tax in Downtown Minneapolis it's half or a third of what you take here and carry so yes I understand you want to push this Alex and we will do that but it merits a complete context and understanding it's not just about what we talked about every resident in this city is suffering from extremely high property taxes and every time we increase the levy we increase the burden on the commercial and residential district and it's not sustainable and so with that we'll then uh proceed and decide what we're going to vote on and and move on in in the spirit of a good conversation um in another perspective how you A store owner or retail owner to have that conversation with a customer right in front of you and try to explain that you're moving the burden onto you the customer so that I can have lower rent and maybe charged it it's just they're it's a little too nuanced I think and even if you're making the rents technically lower or your that's your your goal is to make the rents you're still going to make the price higher and that's what the customer is going to see and that's what the customer is going to avoid sure just last comment I operate a business in Excel here where they have a half percent sales tax they've had it for the last each of the last five years that I've operated in exceler I have never once had a comment from a guest I've never seen it in a survey I've never seen it anywhere at a half percent what is your average ticket my average ticket ticket is $64 exactly yeah so when average restaurant ticket is 100 so I mean again we've had the conversation we will continue to have the conversation in our community engagement and then now I would suggest that we do as uh council member pish suggested and I think I want to restate what I think you said you're you're withdrawing your first motion that we did a lot of discussion on and you're saying that we would like to just uh put it to a vote and if the vote holds as no we would just fall back to position from January I just want to make sure that I understand and that your intent is properly properly uh stated that's correct and that essentially accomplishes what my first motion was in in the first place okay so any further questions or comments okay just just so we understand if we vote this down then don't we need to take another vote maybe without the local option sales Tech to init to approve these this legislative agenda uh council member s and do not because those have already been approved so this is really just adding oh because this added it if we don't approve it it goes back to where it was exactly okay got it uh I just David any comments no mayor I just say procedurally you could ask for a motion to approve the amendment to the 2025 legislative priorities and if that motion is seconded and it fails on the vote we would fall back on that January 2025 version which just didn't have the amendment okay are we okay with that Alex are you okay with that okay so let's go ahead and we would entertain a motion uh council member pish or or anyone else that would like to make the motion well I'd like to make a motion to pass this um legislative priority number I letter I um to add the local option sales tax to our um legislative priorities we have a a move do we have a second I'll second it further discussion so then let's just do a roll call vote since we've had very robust conversation on this so again what we're voting on is saying that as was pulled from the consent agenda to the main agenda the the motion in seconded is to approve an amended uh legislative priorities so that's the motion on the table it's been moved and seconded further conversation let's do a roll call vote if you could call the vote uh manager do uh council member perill I council member plish nay council member McDonald nay council member senson nay I Mullen okay so that does not pass so we just fall back to to January and we will walk forward with our community engagement plan as as suggested um and and was in our Workshop packet and thank you everyone for for your robust debate I'm glad that we had that debate I think it was very helpful Alex uh to have it in public so thank you for pulling it okay um next I think we have city manager support report yeah uh real briefly Mr Mayor and councel uh two things want to note uh next week on Tuesday February 25th uh it'll be our state of the city's address with Mr Mayor uh mayor Mullen uh from 4:30 to 6:00 pm uh kind of networking uh Refreshments 4:30 to 5 presentation 5ish to 5:30 then Q&A uh until 6 so we encourage everybody to come everybody's welcome uh it'll be short sweet and a lot of good camaraderie come see your neighbors uh and learn everything uh that we've accomplished and what what we're working on for the next year and I sure hope that uh some council members are able to join as well so uh so we have that to look forward to next week and then on March 10th which is a Monday uh uh mayor Mullen will be continuing his um mun meetups from 7: to 9:00 p.m. at the mun um sounds like for the first one we have a pretty good uh reception so uh everybody's welcome um and um see you there okay that's all I have Mr Mayor okay is there anything else that uh Council would like to ask of city manager okay with that I would accept a motion to uh close the meeting so moved I'll second any further concussion discussion all right all in favor say I I okay thank you e

This story was created by artificial intelligence (a large language model) based on the proceedings captured in the video below.

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