Duluth City Council Meeting and Finance Committee – November 25, 2024
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Duluth City Council Meeting and Finance Committee – November 25, 2024
The Duluth City Council held its regular meeting on Monday, November 25, 2024, at 7:00 PM in the Council Chamber. Prior to the full council session, the Finance Committee (chaired by Councilor Forsman) received presentations on the Anger Park Golf Course operations and the city’s 2025–2029 Capital Improvement Plan (CIP) and Capital Equipment Plan. The full council then considered a consent agenda, several resolutions, and two second‑reading ordinances related to cannabis regulations. Key public comments addressed the Damiano emergency shelter project, the Duluth Production Incentive Program, park signage, and concerns about project urgency.
Consent Calendar
- Resolutions 24-0911R through 24-0914R – Authorization of four taxable Grant Anticipation Revenue Notes totaling $2,561,481, $1,597,285, $1,639,354, and $1,938,000.
- Resolution 24-0884R – Approval of a 2025 Minnesota Currency Exchange License to The Title Loan Company, Inc.
- Resolution 24-0896R – Authorization to purchase desktop/laptop computers from Insight Public Sector for $175,203.65.
- Resolution 24-0917R – Authorization to purchase five years of Cisco Cloud Calling from CDW Government, Inc., total $380,257.20 ($76,051.44 annually).
- Resolution 24-0907R – Approval of a new civil service classification of Library Safety Coordinator.
- Resolution 24-0908R – Approval of amendments to specifications for Construction Services Combination Inspector.
- Resolution 24-0939R – Approval of collective bargaining agreement between City and Supervisory Association for 2025–2027.
- Resolution 24-0926R – Confirmation of Ben Van Tassel as Director of Planning & Economic Development.
- Resolution 24-0891R – Agreement with Minnesota DEED – State Services for the Blind at Duluth CareerForce Center (March 1, 2024 – June 30, 2026).
- Resolution 24-0895R – Development agreement with Studio Café LLC for redevelopment of 22 W 1st Street, $140,000.
- Resolution 24-0904R – Approval of DEDA Resolution 24D-48 for the Duluth Production Incentive Program (visual media production) and agreement with Upper Midwest Film Office.
- Resolution 24-0909R – Approval of DEDA Resolution 24D-52 for maintenance dredging at Harbor Plaza (DECC) with Wren Works LLC, $860,612.75.
- Resolution 24-0920R – Second amendment to funding agreement with Churches United in Ministry.
- Resolution 24-0905R – Authorization to apply for a Cleanup Grant from DEED for Duluth Paper Mill expansion.
- Resolution 24-0888R – Three‑year agreement with Frontier Energy, Inc. for conservation improvement program (not to exceed $240,000).
- Resolution 24-0903R – Acceptance of $428,366 from Minnesota Department of Commerce Benchmarking Grant Program for energy data reporting upgrades.
- Resolution 24-0910R – Award of contract to JMF Construction Inc. for Hillside Culvert Repairs – Buckingham Creek, $495,971.32.
- Resolution 24-0866R – Acceptance of $27,913.40 reimbursement from Minnesota Department of Public Safety for ballistic vests.
- Resolution 24-0902R – Authorization to apply to MPCA Community Resiliency Grant for $500,000 for energy‑efficient equipment at Morgan Park Community Center.
- Resolution 24-0906R – Amendment to contract with Hess, Roise and Company Ltd. for Section 106 compliance for Waabizheshikana project, increase of $15,605 (new total $52,285).
- Resolution 24-0916R – First amendment to use agreement with Northwoods League, Inc. and RPK Baseball, LLC regarding Wade Stadium.
All consent items were approved unanimously (8‑0) on a motion by Councilor Kennedy, seconded by Councilor Durwachter.
Public Comments & Testimony
- South Career (Executive Director, Damiano Center) – Expressed gratitude for council’s vote at the prior meeting and urged support for Resolution 24-0921R, calling the $1 million allocation “an investment in people” and honoring the dignity of those experiencing homelessness. Highlighted the Damiano Center’s 43‑year history of meeting community needs.
- Sherry Marshak (Executive Director, Upper Midwest Film Office) – Thanked the council for supporting the Duluth Production Incentive Program. Reported that since 2022 the program has injected over $2.3 million of outside spending, including 6,800+ hotel rooms, and has stimulated local employment. Stressed the program’s 25% rebate on local expenditures as risk‑free for the city and a proven driver of economic growth.
- Kevin Free (Duluth resident) – Complained about “private property” signs posted at a park near 27th Avenue West (adjacent to Lincoln Park). Asserted the signs are on city property and threatened legal action to have them removed.
- Lauren Martel (623 East 7th Street) – Began by thanking the council for their service, then criticized the urgency surrounding the Incline Village project at the former Central High School site. Cited a Duluth Monitor article noting no construction activity six months past the projected start. Accused the project sponsor (same company behind the Red Plan) of using manufactured urgency to bypass public input, and stated that the Red Plan’s costs escalated from $296 million to $317 million. Urged the council to avoid “ramming” big projects through without proper public process.
Discussion Items
Finance Committee Presentations (Pre‑Council Session)
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Anger Park Golf Course – Jessica Peterson (Parks & Recreation Manager)
- Provided an update on 2024 operations: a 50% revenue increase from the new driving range machine; the year‑end loss reduced from a budgeted $276,000 to approximately $54,000 (including $108,000 in capital equipment).
- The irrigation project was completed ahead of budget, with a new pump house and smart system. Buckingham Creek was daylighted, improving fish habitat.
- Disc golf baskets (18 from Anger, 9 from LSC) will be removed from the course and stored; relocated elsewhere in the park system (likely east side).
- 2025 plans: new logo, programming to attract new golfers, design funds for a replacement clubhouse, and 18‑hole operation until Memorial Day, then 27 holes.
- Responded to questions about winter use (open but not tracked; Lester Park is tracked), and the 27‑hole configuration rationale (accommodates leagues, nine‑hole players, and tee‑time efficiency).
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Capital Improvement Plan & Equipment – Jen Carlson (Director of Finance & Budget Manager Jessica Casper and Fleet Manager Bill Barissa)
- 2025 total capital improvements: nearly $160 million (streets, bridges, utilities, parks, facilities). Over five years, $370 million will be invested.
- Rolling stock: created a sustainable funding plan using modest levy increases and a $4.5 million general fund transfer. Eliminated 33 units, reduced equipment backlog by 13%, and cut the value of units needing replacement by $4 million.
- Facilities: City Hall HVAC replacement completed ($14.4 million, $12 million ARPA). Facility Condition Index (FCI) improved 43%. Deferred maintenance backlog remains at $50 million; consolidated maintenance facility will reduce it to $44 million.
- Parks capital: park fund capped at $2.88 million annually, requiring $2 million per year to address shortfalls. A destination playground costs more than the entire 2027 capital budget. Many amenities (e.g., Congdon Bridge, parking lots) are at risk without new funding.
- Spirit Mountain capital reinvestment: $26 million project (50% state bonding, 25% city bonding, 25% Spirit Mountain revenues) expected to go to construction in 2025.
Council Discussion on Tourism Marketing RFP
Administrator Montgomery explained the RFP process for tourism marketing services, stating it was legally required under city code and Minnesota statutes. The review committee (chaired by Tom Werner, Airport Authority) included community partners and staff with no conflicts. Scoring: local Duluth firms received up to 10 points, regional Minnesota firms 5 points (10% of total weight). The highest‑weighted factor (40%) was the proposed plan and budget allocation. The city intends to reconstitute Visit Duluth as the destination marketing organization by late 2025. Councilors asked about local staffing commitments and potential conflicts (e.g., a firm serving multiple communities). Montgomery indicated those details would be provided before the final vote at the next meeting.
Resolution 24-0921R – Damiano Emergency Shelter Development Agreement
Councilor Nephew moved approval of a $1 million grant ($500,000 city, $500,000 DEDA) to Damiano of Duluth, Inc. for an emergency shelter facility. Councilors expressed strong bipartisan support, noting the partnership with St. Louis County (which contributed $1.4 million) as essential. The shelter will be used by CHUM in 2025 and eventually for other wraparound services (respite, etc.). The resolution passed 8‑0.
First Reading of Ordinances
- Ordinance 24-060‑O – Authorizing issuance of $8,116,359 General Obligation Water Utility Revenue Note for water utility improvements.
- Ordinance 24-055‑O – Amending Section 48‑28 and adding Section 48‑28.1 (replacement). Both ordinances received first reading and were advanced by voice vote.
Second Reading of Ordinances (Cannabis Regulations)
- Ordinance 24-057‑O – Amending zoning code to allow adult‑use cannabis businesses (permitted uses, definitions). Adopted 8‑0.
- Ordinance 24-056‑O – Adding Chapter 8A to regulate cannabis businesses and amending Chapter 12 for violations. Councilor Mayo inquired whether the section on public use would supersede earlier park‑specific restrictions; City Attorney Lair clarified it mimics alcohol regulations and only pertains to licensed events (e.g., Bayfront Park). The ordinance passed 8‑0.
Key Outcomes
- Consent Calendar – Approved unanimously (8‑0).
- Resolution 24-0921R (Damiano Shelter) – Adopted 8‑0, committing $1 million ($500,000 city, $500,000 DEDA) for an emergency shelter facility.
- First Reading Ordinances (24-060‑O, 24-055‑O) – Advanced to second reading.
- Second Reading Ordinances (24-057‑O, 24-056‑O) – Adopted 8‑0, establishing cannabis zoning regulations and business licensing.
- South Career and Sherry Marshak – Recognized for their advocacy; council thanked them for their contributions.
- Capital Equipment Replacement Plan – Finance committee accepted the sustainable funding strategy; staff will bring bonding resolutions to the December council meeting.
- Tourism RFP – Further details on local staffing and creative resource commitments will be provided before the next meeting; final action pending.
- Parks Capital Shortfall – Council noted the $2 million annual gap and the need for future funding solutions; no immediate action taken.
- Upcoming Business – Council previewed the water revenue note and the need for additional information at the next agenda session.
Meeting Transcript
All right, we'll start in one more minute. So if golf wants to take uh the lectern and start getting ready, we'll we'll settle in. Do you know if someone that works in the industry can serve on a committee? I have somebody to serve on QC, but she works for um SEL. Get going. We've got a busy night. Now this is a finance committee meeting. Typically, Councilor Forzman would be taking uh the lead on this one. He will be stepping in here shortly, so we'll go ahead and start without him and then we'll do a little switch when he gets here. So with that, go ahead and uh you can begin when you're ready. Okay, great. Thank you, Councillor Randorf and Counselors. Good evening. Uh I'm Jessica Peterson, I'm the parks and recreation manager at the city. And amongst my other duties as assigned, I'm also the city's liaison to our golf program. Uh so tonight I'll be talking to you about our golf fund at Anger Park Golf Course, and that will include some twenty twenty-five operating budget um proposal, a twenty-four set of project updates, and some additional look-ahead items. Starting in twenty fifteen, which was the first year that our golf programs were operated by a third party. Um at that time in twenty fifteen until twenty nineteen, reminder that we were operating two twenty-seven whole golf courses. One is that we began an equipment replacement and auction cycle with some of our old equipment enabled in order to procure some new equipment to take care of the course more efficiently. In addition, 24 had an early opening season, though we didn't get much of a winter, that bode well for a golf course in April for early dry season conditions, and we had a very strong October as well with the mild weather. Additionally, a new driving range machine that was installed in 2023 makes using the driving range more convenient, and we're seeing that firsthand with our golfers where we had a 50% increase in revenue this year thanks to that machine. So this is just another 10-year look back on our revenue versus expenses for Duluth Golf, but it also includes the number of rounds on the bottom there. And even with both courses fully operational from 2015 to 2019, our total rounds of golf had declined almost 37%. While the pandemic did offer short-term increases, followed by a plateau and an irrigation project, we're optimistic that we're going to see an upward trend in rounds at anger. So as I mentioned, the approved 2024 budget projected a 276,000 loss thanks to better than expected numbers of rounds, quick irrigation and installation, and efforts by our to manage expenses. That loss was greatly decreased, and we're looking to end the year around $54,000 at a loss. Included in that $54, however, is $108,000 in capital equipment. And again, that capital equipment allows us to maintain the course more efficiently, and we're receiving it only while offloading some of our old unusable equipment via auction each year. And allows us to restrict $178,000, $178,500, which is needed to uh revenue, which is needed revenue for a bond expenses. So while we would have projected a net income of $205,299, we're gonna hold that $178.5 in restriction and still see a net income next year of just under $27,000. And that is still on a semi-reduced course inventory next year, whereby we expect to open the course with 18 holes operational, but we still have some construction work to complete, and we're hoping to do that by Memorial Day of 2025, which would then open all 27 holes once again. But we do expect to start the year with just 18. So I've got a couple of irrigation projects for you. Normally in our golf presentation, you get some numbers and I move on, but there's a little bit too much great stuff happening up there to not talk about it this evening. So as we look ahead to 2025, I'm going to share a couple of the updates for you from Anger Park Golf Course. And these are both project updates and operating updates. On the project side of things, our irrigation project has gone very well despite heavy rain last year in 2023 September, when our new irrigation pond was being excavated, which is the photo on the left, and again a wet spring in 2024. All 27 holes of irrigation were completed this year and they were ahead of budget. We expect that portion of that of the project to come in further under budget, but we are working on change orders to re-add in the remaining irrigation lines that run across Skyline Drive and connect to the driving range and practice area. When we do that, we will have achieved a complete system renewal, concurrent with an extensive natural resources component in that the irrigation ponds are no longer tied to Buckingham Creek, which is a designated trout stream. The creek will be fully daylighted and no longer culverted nor passing through the ponds, and our fish habitat will be greatly improved. In the photo on the left, you see the excavation of the new irrigation pond. It is filled with water in September of 2023, which told us great news, our pond will hold water. Not so great news, we're not done excavating it. So one of our project uh workarounds was that we actually had to pump the water out of the pond after we started digging it. And the photo on the right is an example of the process that it takes to install a new irrigation system. This is trenching for main lines. For the smaller, thinner lines on the course, we could simply draw some of those through under underground even. And that is really what powers the entire system. It's a smart system with uh digital controls and uh remote monitoring opportunities.
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