Putting it to a vote: Council approves ballot question for PACC upgrades, expansion
The Perham City Council moved the stakes forward last Wednesday evening in a special meeting at City Hall.
By approving a resolution calling for an election on a sales and use tax for the expansion and betterment of the Perham Area Community Center, the council took an important step toward improving the 29-year-old structure.
The official question to be submitted to the Nov. 6 ballot is:
"Shall the City of Perham, Minnesota (the "City"), be authorized to impose a sales and use tax of one-half of one percent to finance the expansion and betterment of the Perham Area Community Center located at 620 Third Avenue Southeast in the City?"
The council was told the sales and use tax would be in place for 20 years or until $5.2 million is raised. After repaying interest on the revenue bond the amount the city would have to apply to the PACC project would be $3.46 million.
"The Department of Revenue has said that based off of all our sales tax and sales tax history the city of Perham could generate about $260,000 (per year) with the half-cent sales tax." Smith said. "Because we'd do the project right away we could actually bond for that $3.46 million dollars."
Smith said the city can raise up to $5.2 million over the 20-year duration of the tax. Because of statutory requirements the city is limited to a maximum tax period of 25 years.
"If we raise that $5.2 million in 10 years then the tax is over," Smith said. "Based off the numbers and how much we could generate cash wise we figured $3.46 million toward the PACC was probably enough."
Smith said the PACC board is presently fine-tuning the project plan and he anticipates the board will make a presentation to the city council at their August meeting.
The call for a motion on the PACC resolution sparked some confusion on the council because it is related to the Hub project, which would renovate and repurpose the former Perham Senior High for use by non-profit organizations. Classes begin at a new senior high in September.
The State Legislature granted the city $6 million for the Hub project in May's bonding bill. To access the state bonding money, a matching amount of local dollars has to be raised.
City Manager Jon Smith made it clear Wednesday the sales and use tax revenue will only be used for the PACC project. At the same time, he acknowledged the possibility for misinterpretation.
"It's a little confusing, because when we lobbied for that $6 million from the state it had both projects as one project," Smith said on Thursday. "The $6 million bonding has language for both the Perham Area Community Center and the old high school. That's one piece of it. Because the PACC has some capital improvements that need to be done we figured let's just designate it (the sales tax) specifically for the PACC. That way, if nothing actually accumulates with the Hub, we can still go forward with the PACC projects because those need to be addressed."
Smith went on to say the Hub project is something the city is not ready to tackle yet.
Smith pointed out that one advantage of moving ahead with the Hub project would be being able to acquire the bonding money.
"If we were to move ahead with the state bonding dollars, we can still use that sales tax as a match to access those dollars," Smith said. "Locally, they are two separate projects, according to the state, they are one."
Smith said the PACC board has been working on the expansion and improvement plans for their facility, but at the same time, they have always been a piece of the overall Hub project.
"We both have a long ways to go with the sales tax, but we also have a long ways to go with trying to figure out how those bonding dollars are going to be utilized," Smith said.
In other business the board:
• Held a public hearing and then granted an on-sale and Sunday liquor license to Las Ranitas.
• Held a public hearing on two public nuisance properties.
• Approved a Sunday liquor license for LA Hotel Enterprises.
• Approved a temporary liquor license for the History, Arts and Cultural Association for an event Aug. 18-19 at Pioneer Village.
• Approved a Crazy Days Road Closure of First Avenue North between Main Street and the alley for Crazy Days, Aug. 3-4.
• Approved a request by the United Way of Otter Tail and Wadena Counties for the use of NP Park for their "Stuff the Bus" event.