10-19-11 EDC Packet - Laserfiche WebLink

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Financial Analysis The ability of the Minnesota Vikings to meet its funding commitment has not been evaluated and is considered beyond the scope of this review. Funding sources for the state's anticipated contribution have yet to be identified, and will require legislative review and approval. To pay for its share of project costs, Ramsey County would issue $350 million in tax-exempt revenue bonds. The bond issue would be supported by the combined net revenue from two tax. sources: a half percent local sales and use tax and a $20 excise tax on vehicle sales collected in the county. An analysis of current market conditions suggests revenue from the sales and use tax and the vehicle excise tax would be sufficient to support a bond issue of the a.m.ou.nt that the county proposes. The May 2011 agreement between Ramsey County and the Vikings reduces the project cost by $15 million based on proceeds from the sale of Metrodome property and .MSFC reserves. State law governs the disposition of sales proceeds of such property and reserves, and further analysis would be needed to determine the marketability and costs involved in decommissioning the Metrodome. Use of these funds is subject to further negotiation. For stadium operations, the Vikings would be the responsible party through a lease agreement with the Stadium Authority. Ramsey County would contribute $1.5 million annually to pay incremental costs of civic, noncommercial public events. This amount is subject to an inflationary index but the amount is not to exceed the increase in net sales tax proceeds each year. The Vikings would contribute $150,000 annually for operations of a Stadium Authority, subject to an inflationary index, Ramsey County would have no funding responsibility for the authority. The impact of the proposed half percent sales tax collected in Ramsey County would be to increase the tax rate on retail sales in the City of Saint Paul to 8.125 percent, making it the highest tax: rate in the seven-county metro area. The sales tax rate on retail sales in suburban Ramsey County cities would increase to 7.625 percent, eclipsed only by the City of Minneapolis, at 7.775 percent. It is not clear if a half-percent change in tax rate would significantly affect consumer spending habits or business retention and development. It may. however, compromise other public interests by limiting the county's and region's ability to finance other local or re- gional projects. An analysis of current market, conclitions stigge,!sts revenue front tile sales and use tax and the vehicle excise tax would be sufficient IC) support U bond :issue of the arriotint I Iliul the eourity proposes TFie li•pa.0.., of t•.f.:‘, p•oposecl half percent sales t.ix collected in. R.a.insey (.1'..ounty would be to increase the tax rate o.n retail sales in the C' v of Satrit Pa.1.11 to 8.125 'percent. r.naldria it the highesi tax rate in the [,-(..,:nren-cc.).1.1nty metro a.rea..