Minnetonka — At a Dec. study session, Minnetonka City staff and consultants presented a long-term asset plan and asked the City Council whether it wants staff to pursue legislative authorization to place a local-option sales tax question before voters.

City Manager Mike Funk outlined the asset categories at issue — trails, community and recreation facilities, the Marsh, and several satellite fire stations — and framed the discussion around funding options including grants, user fees, existing franchise fees and a potential local sales tax. “We do have a trail plan… that cost in today’s value is $100,000,000,” Funk said while reviewing capital priorities and possible sequencing.

Finance Director Darren Nelson summarized a University of Minnesota Extension study and staff estimates. Using the older study data, Nelson said a half-cent local-option sales tax could generate about $6,000,000 a year and that, in staff’s back-of-envelope modeling, that annual revenue could support roughly $75 million in bonded projects depending on term and interest rates. Nelson told the council the study found about “54% of the sales tax generated in the city is from nonresidents” and noted the earlier data suggested that a half-cent tax would equate to about “$41.11 per year” for the average resident based on 2021 figures.

Staff presented cost ranges for major projects: Marsh facility options ranging from about $15 million (deferred-maintenance option) to $32 million (mid-range) up to about $41 million for an expanded-build alternative; four satellite fire stations estimated at about $12.5 million each (staff proposed prioritizing two rebuilds — Stations 2 and 5 — at roughly $25 million total while remodeling other stations in the short term); and an Opus-area parks placeholder of $30 million. Staff also noted existing franchise-fee revenue of about $2,000,000 per year that currently helps support trails and suggested earmarking roughly $1,000,000 of projected sales-tax receipts annually for trails to accelerate projects.

Consultants from Goff Public reviewed the legislative context and explained that state statute generally limits a special local-option ballot question to a list of five projects and that cities must demonstrate “regional significance” for certain projects when presenting an authorizing bill. Goff Public advised the council that two potential paths exist: (a) pursue a special authorizing bill in the Legislature (which would allow an earlier referendum timeline if passed) or (b) rely on proposed reform legislation that could create a Department of Revenue review process and push a referendum timeline later (possibly into 2027) but would remove the need to secure legislative authorization.

Council debate centered on priorities. Multiple council members said the fire-station upgrades should be prioritized, while several members argued trails are a public-safety and school-route priority and favored adding trail funding. Marsh options drew varying views: some members preferred the deferred-maintenance approach while others said a mid-range investment could deliver rental and program revenue that improves operations. Several council members stressed that asking staff to pursue legislative authorization would not bind the council to put a measure on the ballot; it would allow staff to return with detailed numbers, a proposed resolution and outreach plans.

Staff returned repeatedly to timing: even in aggressive scenarios, construction completion for major projects is several years away. Funk said that if the council pursued a legislative authorization in 2026, the earliest a referendum could be held would be November 2026; under alternate Department of Revenue paths or if legislative timing slips, the vote could be delayed to later election cycles and construction would likely not complete before 2029 in the fastest scenario.

What’s next: staff said it will update the University of Minnesota sales-tax numbers, refine Marsh cost options and return to council in January with more specific project-dollar recommendations and a draft resolution if the council wishes to proceed to the next step.