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Potential sales tax increase on the horizon

A possible sales tax increase on tourism items in Prescott was discussed at the Feb. 26 Prescott Common Council meeting.

Prescott City Administrator Jayne Brand said the potential sales tax increase would be one-half a percent increase on tourism items such as gas, liquor and restaurant bills. She said raising the sales tax would require legislative approval.

"Communities which have over 40 percent of tourism-related businesses can implement this sales tax without having to [have] legislative approval," Brand said. "Because we don't have 40 percent tourism-related businesses we would need the legislative approval."

While this would impact residents and tourists alike, Brand said the reason for this would be to help pay for Prescott's infrastructure.

"The use of this tax can be for infrastructure such as water, sewer, streets and could be used to purchase fire and police vehicles," Brand said. "Would it affect the residents? Yes, but on a $100 restaurant tab it would be $0.05. Where it is going to help is tourists will be helping for our infrastructure."

Legislative approval is one of the first steps for the proposed sales tax increase, but Brand said even if the legislature approves it, it would have to go through the Common Council and community before it could be approved.

"Once the legislative approval is completed then the Council would have to adopt resolutions to move forward with the tax and then it would go to a referendum of the community," Brand said.

The Common Council also approved a bid from Fitzgerald Excavating for the replacement of a water pressure reducing valve on Kinnickinnic Street. When this was budgeted last year, the expected cost of the project was about $25,000; however, the bids came in higher than that.

"Today's lowest bid on the water department's pressure reducing valve for Kinnickinnic Street came in at $65,280 plus engineering costs of $6,970 for a total of $72,250," Prescott Finance Director Vanessa Norby said in a letter to the Prescott Common Council.

There were multiple reasons for the increase in the expected cost of the valve replacement, Brand said.

"The Public Works Department was able to replace [a pressure reducing valve] we had in another part of the city and the cost came in at about $25,000," Brand said. "They thought they would be able to replace this one also but it was decided it should be moved out of the middle of the Kinnickinnic Street hill so traffic would not need to be shut down whenever they needed to work with it so it is being moved to the side of the street rather than the middle."

Brand said they will also be changing the valve size.

"It was also decided this should be the time they increase the size from a 6-inch to 8-inch valve so this also added costs," Brand said.

These two factors and also who is able to do the replacement, Brand said, probably led to the increased cost.

"I believe these are the reasons the bids came in higher and also at budget time it was still thought our Public Works Department could do a great share of the work," Brand said.