O'Fallon staff recommends 3/8‑cent economic development sales tax for April ballot; council directs ordinance drafting

City staff told the O'Fallon City Council on Dec. 18 that Missouri law allows municipalities to put an economic development sales tax before voters and recommended placing a 3/8‑cent tax on the April ballot to fund long‑term economic development projects. Patrick, the presenter, said the tax must be used for economic development activities and that at least 20% of revenue would be dedicated to long‑term projects such as land acquisition and infrastructure.

Patrick outlined the process and timing: "Council must authorize an ordinance by ordinance to add an economic development sales tax to the ballot" and the council needs to act by a January deadline to place the measure on the April ballot. He offered revenue examples: he estimated a quarter‑cent (0.25¢) would yield about $4.5 million annually and said a 3/8‑cent (0.375¢) would produce roughly $6.76 million; he also said at least 54% of retail sales in O'Fallon come from nonresidents, meaning residents would bear less than half of the tax burden.

Council members questioned governance and transparency. Mayor Hennessy and others asked whether the tax board would include school‑district representatives; Patrick said representatives from taxing districts and community members would be part of the economic development tax board. The city attorney reminded council that state law prevents the city from taking a position for or against a ballot measure; staff may provide only neutral, educational information.

Several council members said they preferred a sunset provision. The presenter acknowledged many cities use 10‑ or 20‑year sunsets to allow voters to reassess the tax. Asked how the city would inform voters, Patrick suggested a city web page and social media information rather than a paid campaign; the attorney reiterated the city may only provide neutral educational materials.

After questions and a brief discussion, Patrick asked for council direction to draft an ordinance. The council replied in the affirmative: "That direction is go," the mayor stated. Staff will bring a draft ordinance back for first reading in January for the council’s consideration.

What happens next: staff will draft ballot language and an ordinance for council consideration on the first January meeting. If the council adopts the ordinance by the statutory deadline, the measure can be placed on the April ballot for a simple‑majority vote.