10.2 SR 05-19-2025The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
City Council
Item Number
10.2
Meeting Date
May 19, 2025
Prepared By
Joe Stremcha, Business Services Director/Assistant
City Administrator
Item Description
Fire Dept. CIP
Reviewed by
Lori Stich
Mark Dickinson
Cal Portner
Tina Allard
Action Requested
Discuss the Fire Dept. Capital Improvement Plan.
Background/Discussion
The following are projects seeking funding in 2026 and 2027:
▪ $25,000,000 Fire Station One (Land in 2025, Building in 2027)
▪ $2,100,000 Aerial (2026)
▪ $1,000,000 Engine Two (2027)
▪ $1,750,000 Burn Building (2027)
The city will need to begin the bonding process within the next 6-12 months and the Council will need to
consider the best method to pay for these improvements.
The 2025 levy was $16,844,183, which means a 1% increase to the levy equals $168,441. The estimated annual
bond payment for a $30,000,000 project is $1,968,693 (based on a 25-year bond with 4.39% interest).
$1,968,693 divided by $168,441 equals 11.69. This represents roughly a 12% increase to the levy.
Alternatively, an additional 0.33% sales tax could generate sufficient revenues based on the .5% sales tax
revenue implemented to complete the Active Elk River projects.
Notable language under consideration by the state legislature regarding future uses of Local Option Sales
Taxes:
▪ Authorization allowed: "Law enforcement center" means a facility that serves multiple communities
and provides public safety functions, including a fire or police station and a facility that provides
emergency 911 and dispatch functions, training facilities, court security and support, emergency
operations, evidence and record retention, and other public safety services. Law enforcement center
does not include correctional facilities licensed under section 241.021.
Page 184 of 197
▪ Revenue sharing required. A political subdivision imposing a tax under this section is subject to the
revenue sharing requirements of section 297A.9903. The amount of tax that the commissioner must
retain under subdivision 16, clause (2), is equal to:
o 15 percent for a political subdivision whose tax is authorized and imposed under this section;
o 15 percent for a political subdivision that amends, extends, or otherwise modifies a tax that
was authorized and imposed by special law before July 1, 2025; or
o 20 percent for a political subdivision that is authorized by special law to impose a new tax after
July 1, 2025.
▪ Final distribution. The commissioner must divide each contributor's contribution share among all
qualified recipients in the contributor's city sharing pool or county sharing pool according to each
qualified recipient's distribution share. If a city sharing pool or county sharing pool has no qualified
recipients, then the contribution share for that sharing pool must be divided among all other city
sharing pools and county sharing pools, in proportion to the contribution share available in each.
▪ "City sharing pool" means all cities located within the same economic development region. For
purposes of this section, when a city is located within more than one economic development region it
is deemed to be located in the economic development region with the highest share of the city's
adjusted net tax capacity.
Financial Impact
Estimated $30,000,000 in 2027 CIP expenses.
Mission/Policy/Goal
Responsible for every dollar - good stewards. Ethical, efficient, and responsible.
Attachments
None
Page 185 of 197