Council delays decision on sales tax issue

The Rochester City Council today decided not to take action at this time on an extension or increase involving the local sales tax

to pay its share of DMC expenses.  The state has given the city authority to increase the tax by a quarter percent or extend it to raise money needed to meet its $128 million DMC requirement.  The Council was told by staff there is no immediate need to make that decision because the city has enough internal funds to meet expected expenses, at least into next year.  The money will eventually be repaid with interest, either through the sales tax or other sources.  Staff also told the Council it’s likely that at least some of the city’s obligation will be met through tax increment financing and other funds.  That would lower the amount of money needed to be raised through the sales tax.  The city will have a much better idea of its financial requirements over the next few years when the DMC master plan is adopted.  That is expected by the end of this year or early next year.