Title
RESOLUTION DISTRIBUTING THE ESTIMATED 2020 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 the tourism tax collections will be $12 million for 2020. A significant amount of these collections - more than 60% - 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
• Spirit Mountain Tax Abatement Bonds (Grand Avenue Chalet & Improvements) - $7,055,000
• Minnesota Slip Bridge Interfund Loan - $2,200,000
• Promotion and Publicity 3% Hotel/Motel Tax Mandate
WHEREAS, the allocations for City funding to the General Fund and Parks are focused on the costs of providing services for events and tourist-focused activities which include but are not limited to: Lakewalk, Enger Tower, Rose Garden, Public Safety staffing and road closures for special events.
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 2020 hotel-motel and food and beverage tourism taxes, as estimated, be distributed in the following manner:
Statement of Purpose
STATEMENT OF PURPOSE: This resolution distributes the 2020 estimated tourism taxes as required by Minnesota State Statutes, City ordinance, or City policy. No growth in 2020 tax collections was factored in determining the allocations above. A comparison of 2019 approved allocations to 2020 proposed allocations is attached as Exhibit A.
For 2019 and 2020, the City instituted an application process for tourism tax allocations. 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 process was implemented with the intent to provide greater accountability, and transparency to a significant source of public funding. The City intends to continue this process with the hope that additional tourism experiences will be a part of the tourism tax portfolio for 2021.
The tourism tax allocations include a requirement of all tourism tax funded entities to participate in two Community Day events for public access for their services. Visit Duluth will help coordinate these events, and it will allow the local Duluth community, who also invests into tourism tax through food and beverage funding, to have the opportunity to benefit from that investment. Additionally, we are asking Visit Duluth to coordinate a broader City Pass for tourism outlets - both those that receive funding and those that do not. We believe that these two changes help bring the Duluth community into better understanding of the value of tourism to our economy, provide affordable community fun at some of the best assets Duluth has to offer, and that our community will then be able to, in turn, provide personal promotion and endorsement of these experiences to visitors they encounter.