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Type:
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Resolution
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Status:
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Passed
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File created:
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8/31/2023
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In control:
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Finance
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On agenda:
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9/11/2023
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Final action:
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9/25/2023
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Title:
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RESOLUTION DISTRIBUTING THE ESTIMATED 2024 HOTEL-MOTEL AND FOOD AND BEVERAGE TOURISM TAXES.
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Title
RESOLUTION DISTRIBUTING THE ESTIMATED 2024 HOTEL-MOTEL AND FOOD AND BEVERAGE TOURISM TAXES.
Body
CITY PROPOSAL:
WHEREAS, Tourism taxes are collected on specific purchases and are used to fund legislatively allowable expenses mandated by Minnesota laws and City ordinance.
WHEREAS, it is expected that tourism tax collections will amount to approximately $14 million in 2024. A significant amount of these collections- more than 50%- are set aside through specific authorizing legislation that tied bonding projects to tourism or through previously stated and mandated commitments. These are:
DECC Improvement Refunding Bonds (AMSOIL Arena) - $33,440,000
Tourism Tax Revenue Bonds (St Louis River Corridor) - $18,000,000
Parks-Based Public Athletic Facilities - $36,000,000
Spirit Mountain Tax Abatement Bonds (Grand Avenue Chalet & Improvements) - $7,055,000
Lake Front Restoration Bonds Phase I - $2,000,000
Lake Front Restoration Bonds Phase II - $3,500,000
Promotion and Publicity 3% Hotel/Motel Tax Mandate
WHEREAS, the allocations for City funding to the General Fund and Parks Fund are focused on the costs of providing services for events and tourist-focused activities. The general fund supports: providing officers for special events, bike patrol in Canal Park, officers to patrol and respond to calls in tourist areas, fire department staff for special events along with traffic control, permitting, risk analysis, and other public safety resources, maintaining the transportation network including plowing, sanding, patching, and sweeping streets used by both residents and tourists, operating and maintaining our bridges particularly the MN Slip Bridge and the Aerial Lift Bridge, providing a senior economic developer position to focus on tourism, and all of the collecting, accounting, reporting, and administration of the tourism taxes. The General Fund and Parks Fund maintain parks and facilities used by tourists including, but not limited to, the Lakewalk, Enger Tower, and the Rose Garden.
WHEREAS, the remainder can be spent in ways that align with legislative intent in support of our tourism economy. These funds cannot be unilaterally applied to other non-tourism organizational needs of the City.
RESOLVED, that the 2024 hotel-motel and food and beverage tourism taxes, as estimated, be distributed in the following manner:
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Promotional & |
Capital |
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Operational |
Support & |
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Total |
Support |
Debt Service |
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3% Hotel/Motel Tax |
$3,490,700 |
$1,335,200 |
$2,155,500 |
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1% Hotel/Motel Tax |
$1,190,000 |
$640,000 |
$550,000 |
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1% Food & Beverage |
$2,986,200 |
$2,986,200 |
$0 |
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Additional 2% Hotel/Motel |
$2,097,400 |
$1,048,700 |
$1,048,700 |
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Additional .75% Food & Beverage |
$2,241,300 |
$0 |
$2,241,300 |
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Additional .5% Food & Beverage |
$1,994,400 |
$0 |
$1,994,400 |
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& .5% Hotel/Motel |
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Tourism Tax Fund Unappropriated |
$900,000 |
$717,900 |
$182,100 |
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Fund Balance |
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Total: |
$14,900,000 |
$6,728,000 |
$8,172,000 |
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DECC- Amsoil Arena Debt Service |
$4,331,900 |
$0 |
$4,331,900 |
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Spirit Mountain Bond - Chalet |
$500,000 |
$0 |
$500,000 |
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Spirit Mountain Adventure Park Lease |
$145,700 |
$0 |
$145,700 |
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St Louis River Corridor Debt Service |
$1,994,400 |
$0 |
$1,994,400 |
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Lake Front Restoration Project |
$550,000 |
$0 |
$550,000 |
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Bellmont Partners |
$1,800,000 |
$1,800,000 |
$0 |
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City of Duluth Parks and Recreation |
$76,000 |
$76,000 |
$0 |
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City of Duluth Parks and Recreation - |
$120,600 |
$120,600 |
$0 |
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Capital |
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DECC - Bayfront Park Management |
$77,900 |
$77,900 |
$0 |
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DECC - Blue Bridge Operations |
$49,700 |
$49,700 |
$0 |
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Depot Foundation/St. Louis County Depot |
$240,000 |
$240,000 |
$0 |
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Downtown Duluth (Special Service |
$236,000 |
$236,000 |
$0 |
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District) |
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Duluth Amateur Hockey Association |
$30,000 |
$30,000 |
$0 |
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Duluth Art Institute Association |
$30,000 |
$30,000 |
$0 |
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Duluth Children's Museum |
$50,000 |
$50,000 |
$0 |
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Duluth Playhouse-Skywalk Security |
$10,000 |
$10,000 |
$0 |
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Duluth Public Arts Commission |
$25,000 |
$25,000 |
$0 |
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Duluth Sister Cities International |
$25,000 |
$25,000 |
$0 |
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Duluth Street Art Initiative |
$20,000 |
$20,000 |
$0 |
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Enger Irrigation |
$500,000 |
$0 |
$500,000 |
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FinnFest USA Events |
$25,000 |
$25,000 |
$0 |
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Fourth Fest Fireworks |
$70,000 |
$70,000 |
$0 |
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Gary New Duluth Development Alliance |
$40,000 |
$40,000 |
$0 |
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Glensheen |
$30,000 |
$30,000 |
$0 |
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Great Lakes Aquarium |
$350,000 |
$350,000 |
$0 |
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Harbortown Rotary Bike Duluth Festival |
$10,000 |
$10,000 |
$0 |
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Hawk Ridge Bird Observatory |
$40,000 |
$40,000 |
$0 |
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Independent Television Festival, Inc. |
$20,000 |
$20,000 |
$0 |
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Lake Superior & Mississippi Railroad |
$20,000 |
$20,000 |
$0 |
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Lake Superior Zoo |
$510,000 |
$510,000 |
$0 |
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Lincoln Park Business Group |
$20,000 |
$20,000 |
$0 |
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North Shore Scenic Railroad |
$50,000 |
$50,000 |
$0 |
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Northern Lights Express |
$20,700 |
$20,700 |
$0 |
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Park Point Art Fair/Park Point |
$10,000 |
$10,000 |
$0 |
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Community Club |
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Parking Ramp Security Improvements |
$30,000 |
$30,000 |
$0 |
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Parks Capital - Golf |
$150,000 |
$0 |
$150,000 |
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Abatement Bond backing |
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Spirit Mountain Operations |
$440,000 |
$440,000 |
$0 |
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The Cyclists of Gitchee Gumee Shores |
$15,000 |
$15,000 |
$0 |
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The Minnesota Land Trust |
$50,000 |
$50,000 |
$0 |
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Tourism Events Support General Fund |
$1,315,100 |
$1,315,100 |
$0 |
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Tourism Marketing Position |
$123,000 |
$123,000 |
$0 |
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Upper Midwest Film Office |
$35,000 |
$35,000 |
$0 |
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Visit Duluth Event and Convention Sales |
$650,000 |
$650,000 |
$0 |
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Zeitgeist Center for Arts and Community |
$20,000 |
$20,000 |
$0 |
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Operational Contingency |
$44,000 |
$44,000 |
$0 |
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Total |
$14,900,000 |
$6,728,000 |
$8,172,000 |
Statement of Purpose
STATEMENT OF PURPOSE: This resolution distributes the 2024 estimated tourism taxes as required by Minnesota State Statutes, City ordinance, or City policy. $14 million is budgeted to be collected in 2024. A comparison of 2023 approved allocations to 2024 proposed allocations is attached as Exhibit A.
For 2024, the City intends to use $900,000 of unappropriated fund balance from the tourism tax fund.
As has been done in previous years, the City continued its annual electronic application process. All applicants were asked to apply for funds, submit budgets, answer a series of questions and report on previous tourism tax funding levels and uses. This is the fifth year this process has been used and it was implemented with the intent to provide greater accountability, transparency, and process to a significant source of public funding
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