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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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9/16/2022
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In control:
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Finance
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On agenda:
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9/26/2022
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Final action:
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10/10/2022
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Title:
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RESOLUTION DISTRIBUTING THE ESTIMATED 2023 HOTEL-MOTEL AND FOOD AND BEVERAGE TOURISM TAXES.
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Title
RESOLUTION DISTRIBUTING THE ESTIMATED 2023 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 both 2019 and 2021 levels of approximately $12.4 million. 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
• 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 2023 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: |
$2,976,000 |
$1,138,300 |
$1,837,700 |
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1% Hotel/Motel Tax: |
$992,000 |
$725,600 |
$266,400 |
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1% Food & Beverage: |
$2,728,000 |
$2,728,000 |
$0 |
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Additional 2% Hotel/Motel: |
$1,860,000 |
$930,000 |
$930,000 |
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Additional .75% Food & |
$1,984,000 |
$0 |
$1,984,000 |
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Beverage: |
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Additional .5% Food & Bev & |
$1,860,000 |
$0 |
$1,860,000 |
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.5% Hotel/Motel |
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Tourism Tax Fund |
$937,100 |
$937,100 |
$0 |
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Unappropriated Fund Balance |
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Total: |
$13,337,100 |
$6,459,000 |
$6,878,100 |
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DECC- Amsoil Arena Debt Service |
$3,821,700 |
$0 |
$3,821,700 |
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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 |
$1,860,700 |
$0 |
$1,860,700 |
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MN Slip Bridge (final payment) |
$30,000 |
$0 |
$30,000 |
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Lakewalk Seawall Project |
$520,000 |
$0 |
$520,000 |
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DECC - Bayfront Park Management |
$73,500 |
$73,500 |
$0 |
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DECC - Blue Bridge Operations |
$46,700 |
$46,700 |
$0 |
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Tourism Events Support General Fund |
$1,234,800 |
$1,234,800 |
$0 |
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Tourism Marketing Position |
$111,700 |
$111,700 |
$0 |
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Greater Downtown Council/Duluth |
$230,000 |
$230,000 |
$0 |
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Downtown Waterfront District |
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Lake Superior Zoo |
$510,000 |
$510,000 |
$0 |
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Northern Lights Express |
$20,000 |
$20,000 |
$0 |
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Bellmont Partners |
$1,800,000 |
$1,800,000 |
$0 |
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Visit Duluth Event and Convention Sales |
$650,000 |
$650,000 |
$0 |
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Fourth Fest Fireworks |
$70,000 |
$70,000 |
$0 |
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Duluth Airport - Denver Flight |
$50,000 |
$50,000 |
$0 |
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Great Lakes Aquarium |
$340,000 |
$340,000 |
$0 |
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The Depot Foundation |
$220,000 |
$220,000 |
$0 |
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Duluth Sister Cities International |
$25,000 |
$25,000 |
$0 |
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Glensheen |
$35,000 |
$35,000 |
$0 |
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Duluth Children's Museum |
$50,000 |
$50,000 |
$0 |
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Hawk Ridge Bird Observatory |
$40,000 |
$40,000 |
$0 |
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North Shore Scenic Railroad |
$50,000 |
$50,000 |
$0 |
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City of Duluth Parks and Recreation |
$77,300 |
$77,300 |
$0 |
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Spirit Mountain Operations |
$440,000 |
$440,000 |
$0 |
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Zeitgeist Center for Arts and Community |
$25,000 |
$25,000 |
$0 |
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Kraus Anderson Bike Duluth Festival |
$10,000 |
$10,000 |
$0 |
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Gary New Duluth Skateboard park |
$40,000 |
$40,000 |
$0 |
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MN Land Trust |
$50,000 |
$50,000 |
$0 |
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Duluth Amateur Hockey Association |
$20,000 |
$20,000 |
$0 |
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Catalyst Content Festival |
$30,000 |
$30,000 |
$0 |
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FinnFest |
$25,000 |
$25,000 |
$0 |
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Main Street Lincoln Park - Ecolibrium 3 |
$25,000 |
$25,000 |
$0 |
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Duluth Public Arts Commission |
$50,000 |
$50,000 |
$0 |
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UMD NCAA Women's Hockey Frozen |
$30,000 |
$30,000 |
$0 |
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Four Championship |
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Operational Contingency |
$40,000 |
$40,000 |
$0 |
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Clean and Safe Team in the Lincoln Park Craft District |
$20,000 |
$20,000 |
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Lake Superior & Mississippi Railroad Company |
$20,000 |
$20,000 |
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Total |
$13,337,100 |
$6,459,000 |
$6,878,100 |
Statement of Purpose
STATEMENT OF PURPOSE: This resolution distributes the 2023 estimated tourism taxes as required by Minnesota State Statutes, City ordinance, or City policy. $12.4 million is budgeted to be collected in 2023, similar to the amounts collected in both 2019 and 2021. A comparison of 2022 approved allocations to 2023 proposed allocations is attached as Exhibit A.
For 2023, the City intends to use $937,100 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 fourth 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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