News & Articles

Formal legislation for the new streets plan appeared on the city council’s agenda during the May 22 agenda session. Consisting of one resolution and one ordinance, the legislation was the product of two weeks of busy consultation between city councilors and city staff, and two years of study and community meetings before that. It continues to be a work in progress. Indeed, City Clerk Jeff Cox advised councilors that the legislation before them was actually superseded by a more recent version, which had been emailed to them.
The streets plan is supposed to go something like this. First, the city will create a new utility for street maintenance and reconstruction. The utility will be administered, along with the city’s other utilities, by Comfort Systems. Each year, the city administration will identify the street projects that it wants to do that year, and the dollar amount of the household fee that would be needed to raise enough money to do those projects. The city council will then decide whether to approve that fee, a different fee, or no fee at all. The administration would then adjust its project schedule accordingly. Chief Administrative Officer Dave Montgomery characterized this arrangement to councilors as an “annual reset.”
The council is currently considering a monthly household fee of $5, which would raise $2.7 million annually. The administration had initially wanted an $8.50 fee, but this proved problematic for too many councilors, and it was reduced.
Council discussion on the plan was long and often frustrating, not least because different people were looking at different versions of the legislation. Councilor Gardner expressed concern that an ordinance she had put on the agenda the week before was not there. In fact, it was nowhere. There was an ordinance on the agenda that was similar, regarding a sunset date for the city’s streetlight fee, but it was not the same ordinance as Councilor Gardner’s.
“When I looked on the agenda and it wasn’t there, I was quite taken aback,” said Gardner. “I know that administration did not want that discussion, and wanted to have the streetlight fee ordinance pulled, [but] I didn’t feel that I could do that on my own, without consulting other councilors […] The last time I looked, this is a council agenda. And if a councilor puts something forward, and it was going to be pulled, then that would be my responsibility, as a sponsor of the ordinance, to request that it be pulled.” Gardner took a breath. “How would this happen to our agenda?”
City Attorney Gunnar Johnson looked uncomfortable. Very uncomfortable. He hemmed and hawed, then admitted, “I don’t have an answer for you.”
“You don’t have an answer,” said Gardner. Her face was red. “I’m not sure where to go for an answer. I can’t figure out why somebody didn’t email me earlier and at least tell me that they didn’t have an answer, because then I wouldn’t have had to [bring it up] tonight at the meeting.”
“I…” said Attorney Johnson, but went no further.
Gardner looked at the city clerk. “Mr. Cox, can you help with this?”
Mr. Cox, displaying the self-preservation skills that came from decades on the job, shook his head and scrunched lower behind his computer monitor. He wasn’t getting into this one.
“Let me…let me go back,” said Attorney Johnson. “It’s been a very busy activity with this whole process. I do not believe that those resolutions, or those ordinances and resolutions, were ever put on the agenda, and so…”
Not the right answer. Councilor Gardner drew herself up. ”Yes, they were filed. Yes, Mr. Johnson, they were filed to be put on the agenda. We did that on a timely basis last week.”
The city attorney smartened up. “Let me look into that, and I will get back to you.”
The meeting went on, but Gardner and Johnson and several other councilors continued to refer to the missing ordinance throughout the meeting. It was a bothersome issue. The whole thing may have been an honest mistake, but the fact that it was an ordinance the administration didn’t want put the situation in a bad light. You didn’t see the administration’s ordinances disappearing.
But to pull an unwanted ordinance without the sponsor’s consent would be a serious transgression. Nobody wants to believe that anybody would do something like that intentionally.
The Ness administration is anxious to get the streets plan passed, so the city can start working on street projects for the year. But the plan is complex and changing. In the few days since the agenda meeting, another new resolution relating to the streets plan has already appeared on the scene. The whole package is a big (and growing) piece of legalese that substantially alters city policy. The fee with the annual reset feature is a totally new way of funding street maintenance.
The plan will get a first reading during the city council’s May 27 meeting.

Duluth scores big

Duluth scored big in the state bonding session, landing multimillion-dollar grants for Spirit Mountain, the NorShor Theatre, and Wade Stadium. Adding to the joy of civic leaders, the state Legislature agreed to allow Duluth to restore two tourism taxes that had sunset in 2012: a half-percent tax on restaurant meals and bar tabs, and a half-percent tax on hotel rooms. The two taxes are commonly referred to as “the half-and-half tax,” which makes sense, and sometimes as “the 50-50 tax,” which doesn’t.
The reinstated half-and-half tax was the idea of Mayor Don Ness, who wants to raise $18 million over fifteen years for projects in the western part of town. When I asked the mayor, via email, which specific projects would be funded, he named three existing attractions—Spirit Mountain, the zoo and Wade Stadium—whose combined needs would consume about $6 million. Of the remaining $12 million, the mayor wrote, “We don’t want to rush into this….We will spend the next ten months working with stakeholders, city councilors, area residents, user-groups, etc. – to develop a list of projects that could be constructed in 2015.”
The mayor hopes to use the $18 million to leverage money from other sources to ultimately make as much as $30 million in improvements. He mentioned several general possibilities, including “increased and improved river access,” “increased and improved trail systems,” and “investment in city parks along Grand Avenue.”
“The vast majority of what we plan to build,” wrote the mayor, “will be free and available to use by either visitors or residents….Having enhanced parks, trails, and river access will be a significant selling point to attract new home buyers to the area.”
The half-and-half tax is scheduled to sunset in fifteen years or when $18 million has been raised, whichever comes first.  The mayor said that since estimates of tourism tax receipts are conservative, he expected the tax to sunset “well before the fifteen years is up.”
All of this new construction and project-building, of course, will add to the city’s infrastructure and maintenance costs—and, as always, if the tourism taxes don’t cover the bond payments, the city is still obligated to make them. Historically, the tourism taxes have done an excellent job of keeping up with their bond payments. But the possibility is always there that the trend will reverse, or at least pause.
If we have too many projects that depend on tourism tax funding, even one or two slow years in the tourism industry could hurt the city’s bottom line, as money would have to be taken from the general fund to make the bond payments.
That’s the disclaimer, the possible downside. It’s something that should be mentioned with every tourism tax project, like the warning on a pack of Kools.
For now, the city council must vote to approve the half-and-half tax—which they certainly will do, without a doubt. They seem very excited about it, as do many in the community.

The Spirit Mountain water line

In the case of Spirit Mountain, the half-and-half tax proceeds will be used to issue $2.1 million in bonds, which will be combined with the $3.4 million in bonds granted by the state, to construct a new water line from the St. Louis River to the ski hill. The water line, which has been proposed for many years, will allow Spirit Mountain to use “raw” river water for snowmaking rather than treated city water, which is expensive.
If all the bonds come through in a timely manner, and the project is bid promptly, and construction begins soon, the water line will be contributing savings to Spirit Mountain’s budget beginning in fiscal year 2017. In that year, according to a five-year budget forecast prepared by Spirit Mountain’s finance committee, the ski hill’s water costs are predicted to drop from $819,000 to $688,000—a savings of $131,000. In the following year, 2018, water costs are supposed to drop another $140,000, all the way down to $548,000.
The forecast stops there, but let us hope the savings continue. The city has issued $9.3 million in bonds for Spirit Mountain projects in the last five years, and the water line will add another $2.1 million to the total. Payments will continue to come due on these bonds at least until 2032. The extra money from the water line, if it materializes, will certainly come in handy.

Buffet banana begets brisket brouhaha

When Arby’s aired their world-record-breaking 13-hour smoked brisket television commercial in Duluth on May 24, a small group of people gathered in the boardroom at Fitger’s Inn to officially watch and record the event. As the brisket smoked and dripped onscreen, one representative from the Guinness Book of World Records, two members of the ad agency responsible for the spot, and a handful of temporary employees working in shifts made sure that proper world-record-breaking protocol was observed.
Duluthian Richard Thomas, one of the temps, had the 10 p.m. – 2 a.m. shift. He compared watching the brisket commercial to watching paint dry or grass grow, but he was interested to find out from the Guinness rep that something Thomas had seen on an episode of “South Park” was true: The Guinness company actually did receive about 1,000 calls a month from people wanting to register the world’s largest bowel movement. And so the hours slipped easily by.
At one point, a brief panic gripped the room when the television screen turned to static. It was soon determined that Thomas, while loading up on complimentary snacks, had inadvertently set a banana on the remote control and changed the channel. Acting quickly, the team removed the banana and changed the channel back. So all was well, and the world record was achieved without a hitch.
The official log of the event, which will be archived by Guinness along with other supporting materials, has an entry, preserved for posterity, that says, “Banana was eaten.”  Whether Mr. Thomas will be considered for future brisket-watching work remains unclear.

.“John Ramos has observed and written on Duluth politics since 1998.”