00-022-O
ORDINANCE NO. __________

AN ORDINANCE PERTAINING TO THE DULUTH PUBLIC FACILITIES AND PROGRAM FUND; DELETING REFERENCES TO FUND DISBURSEMENTS TO A NONPROFIT CORPORATION; AMENDING SECTION 10A-18, DULUTH CITY CODE, 1959, AS AMENDED.

BY COUNCILOR NESS:

The city of Duluth does ordain:

Section 1. That Section 10A-18 of the Duluth City Code, 1959, as amended, be amended to read as follows:
 

Sec. 10A-18. Duluth public facility and program fund established.

(a) There is hereby established a Duluth public facility and program fund (the fund). The fund is created pursuant to Minnesota Statutes, Section 349.213, Subdivision 1, to collect, administer and disburse five percent of the net profits derived from lawful gambling;

(b) The purpose of the Duluth public facility and program fund shall be to provide funds for the establishment, improvement and maintenance of public facilities and/or recreational, educational, environmental or other community related programs in Duluth. The fund will provide financial resources for a nonprofit charitable corporation whose sole purpose is the establishment, improvement and maintenance of public facilities and/or recreational, educational, environmental or other community related programs in Duluth;

(c) The fund shall be administered by the Duluth city auditor, upon advice from the parks and recreation commission as provided in this Section;

(d) No costs of administration shall be charged to the fund. All proceeds collected shall be disbursed under the provisions of this Section;

(e) Disbursement of funds. Proceeds in the fund shall be disbursed only to a nonprofit corporation having tax-exempt status under Section 501(c)(3) of the Internal Revenue Code and which meets the following criteria:

(1) The board of directors of the corporation shall consist of 15 persons, six of which represent a broad range of various organizations that operate lawful gambling in the city, two of which represent fraternal or veterans organizations that operate lawful gambling in the city, one of which represents Independent School District 709, one of which represents the city of Duluth and five of which represent the general public at large;

(2) The corporation must disperse all of its funds for the purpose of establishing, improving or maintaining publicly owned facilities located in the city of Duluth, or for establishing or maintaining recreational, educational, environmental or other community related programs in the city of Duluth;. All disbursements must constitute

(3) The corporation must disperse all of its funds for "lawful purposes" as defined in Minnesota Statutes, Section 349.12, Subdivision 25;.

(4) The corporation has as its primary purpose the establishment, improvement and maintenance of public facilities in Duluth or the establishment or maintenance of recreational, educational, environmental or other community related programs in Duluth;

(5) The corporation must not fund any facility that discriminates on the basis of race, color, creed or gender. No facility that discriminates on the basis of race, color, creed or gender shall be funded. The parks and recreation commission established in Article IX of Chapter 2 of this Code shall act as an advisory body to the city auditor with respect to priorities and amounts of funding for public facility and program projects.

Section 2. That this ordinance shall take effect and be in force 30 days from and after its passage and publication.

STATEMENT OF PURPOSE: The Public Facilities and Community Action Corporation is being dissolved because of concerns of the state auditor, state attorney general, and state legislature concerning the appropriateness and legality of corporations that are sponsored or controlled by cities. The purpose of this corporation was to accept and disburse to projects money in the Duluth public facility and program fund, which is derived from five percent of pull-tab revenues in the city of Duluth. This ordinance eliminates all references to the corporation in our present ordinance and provides that the parks and recreation commission shall be the advisory body on funding for projects and programs after the corporation is dissolved. State law (Minn. Stats. Section 349.213, Subd. 1) requires that the city administer this fund at no cost to the fund and that funding must be for lawful purposes as defined in Minn. Stats. Chapter 349.