City Council to discuss DMC sales tax issue

The Rochester City Council may soon make a decision on how it will pay the city’s required DMC contribution.

The city needs to come up with $128 million to pay for DMC-related infrastructure costs. The legislature gave the Council authority to extend the current half-cent sales tax or increase it by a quarter percent. The Council has been told by staff that an increase in the tax would lower overall borrowing costs. The Olmsted County Board implemented a quarter percent sales tax on January 1st. Up to $3 million per year from that tax will be given to the city for transportation projects. The county can use the rest for its own transportation needs.
The Council has also been told the city may have to tap the $20 million DMC fund that was authorized by the 2012 sales tax extension to pay the cost of the initial DMC Corporation (DMCC)  budget, which is around $8 million. Staff is concerned the first budget may not count as a contribution towards the city's DMC requirement because it’s not linked to any projects. The city is responsible for the DMCC's expenses.
Meanwhile, the city and Mayo Clinic continue work on finalizing the articles of incorporation for the DMCC. There is still disagreement on how the funding will be controlled.  City Council members have said they want to have the final say over all expenditures.

The Council is scheduled to discuss the DMC tax issue at its committee meeting Monday afternoon.