Minnetonka council votes to seek legislative authority for half‑cent sales tax (Option A) to fund trails, fire stations, Marsh renovation and Opus park

The Minnetonka City Council voted 6–0 on Jan. 12 to adopt a resolution (Option A) authorizing staff to seek state legislative approval to let Minnetonka put a half‑cent local sales tax before city voters to fund a package of regional capital projects.

City Manager Mike Funk said the action does not impose a tax; it simply seeks the state’s permission to allow Minnetonka to ask its voters about a 0.5% sales tax that, by staff estimate, could raise about $6 million annually. Any sales tax would require voter approval through a referendum within two years of legislative authorization.

Option A lists five projects of regional significance: reconstruction of Fire Station 2 (Ridgedale district) and Fire Station 3 (Opus area), completion of high‑priority trail segments, a full renovation of the Marsh Health & Wellness Center (estimated $35 million), and development of a community park/open space in the Opus area. Staff estimated the package at roughly $116.1 million; Option B — a smaller Marsh scope — would have totaled about $97.6 million.

Funk and finance advisors told the council that a sales tax distributes costs between residents and the substantial number of nonresident visitors who shop and use Minnetonka facilities; the University of Minnesota Extension’s analysis suggests roughly 54% of a half‑cent sales tax would be paid by nonresidents. Staff also compared options with property‑tax funding, noting a property‑tax (levy) approach could require a roughly 9% levy increase to cover equivalent debt service for the example projects.

Public commenters were split: some small‑business owners opposed a new local sales tax because of added costs and administrative burdens; Marsh members and users urged investment in the facility’s repairs and program enhancements. Councilors debated tradeoffs — scale of improvements, effect on residents and businesses, and urgency for parks and public safety projects — before adopting Option A.

Adoption of the resolution sends the request to the state tax committees by the end of January; if the legislature grants authority (often as part of a tax bill), Minnetonka would then craft referendum language and schedule a vote (earliest feasible referendum could be November 2026; latest within two years). If voters approve, the council would adopt enabling ordinances and could issue bonds supported by the sales tax to finance the projects.