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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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11/15/2024
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In control:
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Finance
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On agenda:
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12/9/2024
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Final action:
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12/9/2024
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Enactment date:
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Enactment #:
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Title:
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RESOLUTION DISTRIBUTING THE ESTIMATED 2025 HOTEL-MOTEL AND FOOD AND BEVERAGE TOURISM TAXES.
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Attachments:
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1. Exhibit A
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Title
RESOLUTION DISTRIBUTING THE ESTIMATED 2025 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 2025. 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 - $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, 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 2025 hotel-motel and food and beverage tourism taxes, as estimated, be distributed in the following manner:
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Total |
Promotional & |
Capital |
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Operational |
Support & |
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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 |
$1,163,600 |
$507,400 |
$656,200 |
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1% Food & Beverage |
$2,988,400 |
$2,988,400 |
$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 & .5% Hotel/Motel |
$2,018,600 |
$0 |
$2,018,600 |
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Tourism Tax Fund Unappropriated Fund Balance |
$1,136,100 |
$536,100 |
$600,000 |
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Total: |
$15,136,100 |
$6,415,800 |
$8,720,300 |
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DECC- Amsoil Arena Debt Service |
$4,388,800 |
$0 |
$4,388,800 |
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Spirit Mountain Bond - Chalet |
$500,000 |
$0 |
$500,000 |
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Spirit Mountain Adventure Park Lease |
$24,300 |
$0 |
$24,300 |
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St Louis River Corridor Debt Service |
$2,012,700 |
$0 |
$2,012,700 |
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Lake Front Restoration Project |
$550,000 |
$0 |
$550,000 |
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Aerial Lift Bridge - Debt Service |
$339,800 |
$0 |
$339,800 |
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Harbor Plaza - Debt Service |
$104,700 |
$0 |
$104,700 |
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Aerial Lift Bridge - Capital Contribution |
$800,000 |
$0 |
$800,000 |
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Bayfront Operations |
$85,000 |
$85,000 |
$0 |
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DECC - Blue Bridge Operations |
$50,800 |
$50,800 |
$0 |
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Depot Foundation/St. Louis County Depot |
$150,000 |
$150,000 |
$0 |
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Duluth Amateur Hockey Association |
$75,000 |
$75,000 |
$0 |
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Duluth Children’s Museum |
$20,000 |
$20,000 |
$0 |
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Duluth Parks and Recreation |
$175,500 |
$175,500 |
$0 |
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Duluth Sister Cities International |
$25,000 |
$25,000 |
$0 |
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Finn Fest |
$25,000 |
$25,000 |
$0 |
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Fourth Fest Fireworks |
$72,100 |
$72,100 |
$0 |
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Glensheen |
$30,000 |
$30,000 |
$0 |
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Great Lakes Aquarium |
$310,000 |
$310,000 |
$0 |
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Greater Downtown Council dba Downtown Duluth |
$301,000 |
$301,000 |
$0 |
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Hawk Ridge Bird Observatory |
$40,000 |
$40,000 |
$0 |
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Lake Superior & Mississippi Railroad |
$25,000 |
$25,000 |
$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 Project - Rail Alliance |
$18,600 |
$18,600 |
$0 |
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Park Point Art Fair/Park Point Community Club |
$10,000 |
$10,000 |
$0 |
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Spirit Mountain Operations |
$400,000 |
$400,000 |
$0 |
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Tourism Events Support General Fund |
$1,482,800 |
$1,482,800 |
$0 |
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Tourism Marketing Firm |
$1,800,000 |
$1,800,000 |
$0 |
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UMD NSIC Outdoor Track and Field Championships |
$25,000 |
$25,000 |
$0 |
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UMD WCHA Tournament Championship |
$10,000 |
$10,000 |
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Upper Midwest Film Office |
$25,000 |
$25,000 |
$0 |
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Visit Duluth Event and Convention Sales |
$650,000 |
$650,000 |
$0 |
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Operational Contingency |
$30,000 |
$30,000 |
$0 |
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Total |
$15,136,100 |
$6,415,800 |
$8,720,300 |
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Statement of Purpose
STATEMENT OF PURPOSE: This resolution distributes the 2025 estimated tourism taxes as required by Minnesota State Statutes, City ordinance, or City policy. $14 million is budgeted to be collected in 2025. A comparison of 2024 approved allocations to 2025 proposed allocations is attached as Exhibit A.
For 2025, the City intends to use $1,136,100 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 sixth 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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