|
|
Type:
|
Resolution
|
Status:
|
Agenda Ready
|
|
File created:
|
10/7/2025
|
In control:
|
Finance
|
|
On agenda:
|
10/14/2025
|
Final action:
|
|
|
Enactment date:
|
|
Enactment #:
|
|
|
Title:
|
RESOLUTION DISTRIBUTING THE ESTIMATED 2026 HOTEL-MOTEL AND FOOD AND BEVERAGE TOURISM TAXES.
|
|
Attachments:
|
1. Cover Memo, 2. Exhibit A
|
Title
RESOLUTION DISTRIBUTING THE ESTIMATED 2026 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 $14.28 million in 2026. A significant amount of these collections- more than 50%- are set aside through specific authorizing legislation that tie 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 - $1,995,000
Lake Front Restoration Bonds Phase II - $3,085,000
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, the collecting, accounting, reporting, and administration of the tourism taxes, and the maintaining of 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 2026 hotel-motel and food and beverage tourism taxes, as estimated, be distributed in the following manner:
|
|
|
Promotional & |
Capital |
|
|
|
Operational |
Support & |
|
|
Total |
Support |
Debt Service |
|
|
|
|
|
|
3% Hotel/Motel Tax |
$3,560,500 |
$1,361,900 |
$2,198,600 |
|
1% Hotel/Motel Tax |
$1,186,800 |
$320,600 |
$866,200 |
|
1% Food & Beverage |
$3,048,200 |
$3,048,200 |
$0 |
|
Additional 2% Hotel/Motel |
$2,139,400 |
$1,069,700 |
$1,069,700 |
|
Additional .75% Food & Beverage |
$2,286,200 |
$0 |
$2,286,200 |
|
Additional .5% Food & Beverage & .5% Hotel/Motel |
$2,058,900 |
$0 |
$2,058,900 |
|
Tourism Tax Fund Unappropriated Fund Balance |
$1,048,300 |
$808,300 |
$240,000 |
|
Total: |
$15,328,300 |
$6,608,700 |
$8,719,600 |
|
|
|
|
|
|
DECC- Amsoil Arena Debt Service |
$4,476,600 |
$0 |
$4,476,600 |
|
Spirit Mountain Bond - Chalet |
$500,000 |
$0 |
$500,000 |
|
Spirit Mountain - Debt Service for State Funding Match |
$400,000 |
$0 |
$400,000 |
|
St Louis River Corridor/Athletic Facilities Debt Service |
$2,053,000 |
$0 |
$2,053,000 |
|
Lake Front Restoration Project |
$550,000 |
$0 |
$550,000 |
|
Cruise Ship Baggage Facility |
$500,000 |
$0 |
$500,000 |
|
Tourism Asset Maintenance & Preservation |
$240,000 |
|
$240,000 |
|
Bayfront Operations |
$87,600 |
$87,600 |
$0 |
|
DECC - Blue Bridge Operations |
$52,000 |
$52,000 |
$0 |
|
Duluth Parks and Recreation |
$150,000 |
$150,000 |
$0 |
|
Fourth Fest Fireworks |
$100,000 |
$100,000 |
$0 |
|
Great Lakes Aquarium |
$310,000 |
$310,000 |
$0 |
|
Greater Downtown Council dba Downtown Duluth |
$280,000 |
$280,000 |
$0 |
|
Lake Superior Zoo |
$510,000 |
$510,000 |
$0 |
|
Northern Lights Express Project - Rail Alliance |
$18,600 |
$18,600 |
$0 |
|
Spirit Mountain Operations |
$400,000 |
$400,000 |
$0 |
|
Tourism Events Support General Fund |
$1,512,500 |
$1,512,500 |
$0 |
|
Tourism Marketing Firm |
$1,800,000 |
$1,800,000 |
$0 |
|
Visit Duluth Discretionary Allocation |
$695,000 |
$695,000 |
$0 |
|
Visit Duluth Event and Convention Sales |
$663,000 |
$663,000 |
$0 |
|
Operational Contingency |
$30,000 |
$30,000 |
$0 |
|
Total |
$15,328,300 |
$6,608,700 |
$8,719,600 |
Statement of Purpose
STATEMENT OF PURPOSE: This resolution distributes the 2026 estimated tourism taxes as required by Minnesota State Statutes, City ordinance, or City policy. $14.28 million is budgeted to be collected in 2026. A comparison of 2025 approved allocations to 2026 proposed allocations is attached as Exhibit A.
For 2026, the City intends to use $1,048,300 of unappropriated fund balance from the tourism tax fund.
This is the first year for Visit Duluth to decide the allocation of the discretionary tourism tax funds.
|