01-0552R

RESOLUTION APPROPRIATING TOURISM TAX FUND BALANCE.

BY COUNCILOR HOGG:

        WHEREAS, there is an available fund balance in the tourism taxes fund of the city of Duluth; and

        WHEREAS, the city desires to assist the Spirit Mountain recreation area authority in stabilizing their finances.

        NOW, THEREFORE, BE IT RESOLVED, that $250,000 additional funds will be allocated to the Spirit Mountain recreation area authority for cash flow and fund stabilization in 2001 beyond the amount already accorded, this source coming from the unreserved, undesignated fund balance in the fund.

        BE IT FURTHER RESOLVED, that contributions to Spirit Mountain and the DECC be increased $12,300 and $4,600 respectively, to reflect the changes in cost allocation charges.



STATEMENT OF PURPOSE:  This resolution will authorize the city to transfer $250,000 from the tourism tax fund to the Spirit Mountain recreation area authority (SM) as an infusion of working capital.  Despite a record revenue year due to the higher snowfall, SM did not have a successful year financially due to ongoing increases in labor, health insurance, energy and capital maintenance.  The $250,000 will be a one time infusion that will help SM avoid a cash deficit leading into its ski season and season pass sales period.  The administration will be evaluating and monitoring SM's financial performance over the next year to determine if an annual subsidy from the tourism tax is warranted.  SM is specifically mentioned as an authorized recipient in all of the tourism tax ordinances and the $250,000 transfer will still leave the tourism tax fund with a ten percent undesignated fund balance reserve.