Council directs staff to end temporary 6¢ sales tax on June 30 if projected collections meet ballot amount

City staff and councilors debated when to end a voter-approved temporary 6¢ sales tax that is dedicated to specific ballot projects. Speaker 7 summarized the program history: voters approved the 6¢ tax in November 2024 with projects totaling $18.2 million (reduced from an original $35 million plan). Collections began in April 2025; based on current collection patterns, staff projected the required funding would be collected by June 30, 2026 (about 15 months), although taxes collected in June may not reach the city until August.

"We do expect to receive the entire amount of this tax by 06/30/2026," Speaker 7 said, and explained the Department of Revenue requires sales tax changes to be scheduled to take effect at the start of a fiscal quarter, which creates timing constraints for any change to the tax. Staff presented two options: notify the Department of Revenue to end collection effective June 30 (risk that final checks arrive later and city may discover a shortfall) or delay the end date to Sept. 30 to ensure full collections but potentially overcollect for three months.

Councilors weighed honoring the voters' expectation for a temporary tax against the practical risk of shortfalls and construction cost increases. Speaker 8 (legal/finance) told the council that excess collections would not revert to the general fund but must be spent on the approved ballot projects or applied to project maintenance; there is no statutory obligation to return over-collections to taxpayers. "Our recollection is it can be used as a perpetual care fund for that project for future maintenance," Speaker 8 said.

After discussion and confirmation that at least some projects have guaranteed maximum price contracts, the council signaled support for ending the tax on June 30 to align with the voter commitment and to avoid creating a perception that the temporary levy had become permanent. Speaker 1 asked for confirmation and multiple speakers agreed to a June 30 end date, with Speaker 7 noting the city must notify the Department of Revenue within the statutory timeframe (60 days before the quarter) to meet that date.

Next steps: staff will notify the Department of Revenue per statutory deadlines and monitor final collections through June; if projected shortfalls appear, staff will return to the council with options for covering those shortfalls or adjusting project allocations.