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Library and Park Closings

If you oppose the recent closings of Duluth branch libraries and parks, please take a moment to email your city councilors regarding the issue. Councilors Gardner, Anderson, and Gilbert are working on initiatives to mitigate the closings. Let them know of your support. While you're at it you might as well drop Donny a line as well to let him know you think libraries and parks are essential city services.

At Monday's City Council meeting, there will be a gathering of Duluth citizens speaking out about the closings. Feel free to join in that as well.

Monday August 25th
7:00pm Council Chambers
3rd Floor of City Hall


I don't think anyone supports the closings of libraries and parks. However, Don Ness' cuts to city services and departments are justified when seen in the context of the Duluth city deficit. Though, there are other city expenditures that are less needed (ie the annual tourism budget). It would be more productive to email the city council and Mayor Ness with viable alternatives to fixing the budget crisis -rather than simply 'say no' to whatever cut you don't approve of.

I have to agree with Moped Will -- everyone in Duluth seems willing to protest what they DON'T want closed/cut, but no one seems to have any feasible alternatives to simply going so far into debt that the city goes bankrupt and the state comes in and takes over.

I love libraries and parks. I also like knowing that taxes I pay providing living wages for city workers -- but something is going to have to give. There's a $6.5 million deficit that is only going to get bigger. I trust that Don Ness is trying to do his best here. But he's not getting any help from anyone in trying to solve this.

How soon we forget that there was someone in the Mayor's race who offered real budget solutions.

I think you can cut some $$ from Visit Duluth's budget, we can do with one less billboard on I-35, before you cut library services and parks & rec that serve locals. And this might be heresy, but I'd sell off the Minehaha window too. I'm an art lover, but libraries and parks & rec are more essential to me than the Minehaha window. I'm sure there's more pork in the budget we can cut before laying off $6/hr city employees.

One, I never said that people should just complain. I'm just urging they contact their city councilors and let them know whatever it is they think about the closings.

Two, yes I know that the budget needs to be fixed somewhere, but I think the libraries and parks are taking an unfair burden of the cut. What about the fire department? I think that a cut there would impact poor and rich equally and be more socially just.

Three, I don't know about you, but I'm willing to pay more taxes to pay for services such as these. Spread out among everyone--it's not that much. $6.5 million/86,000 is 75 bucks a person.

I, too, would gladly pay additional taxes. However, your $75 X 86,000 = $6.5 million doesn't really work because those under 18 and those who are rich don't pay taxes. There are plenty of $150,000/year people in this town, but they hate taxes, they hate government and probably hate babies and puppies, too.

There were phone numbers in the paper(Sat the 23) to call if you want to volunteer to help in the parks. Don't have the paper with me.

I looked through the paper and cannot find it now. I'm sure if you call parks and rec they can direct you.

If Duluth would let developers build the stuff they are building in Hermantown down here it would help a lot. Hermantown has nice schools and other facilities while all of us in Duluth have to waste gas driving up the hill. Why not build a huge mall by the lake and other stores down there? Duluth has the greatest resource sitting right under its nose, but doesn't utilize it.

As far as cuts go, in the past 2 weeks on my street a fire engine has accompanied ambulances when they have been called. In both cases there was no fire and the fire dept. guys just stood around. There were also several police cars, etc... One of the cases was an older man had a heart attack and lived on the second floor, I am not sure about the other.

The retired city workers are still making a living wage and getting better insurance than the rest of us. This is being done by firing the next generations of workers.

It is tiring to hear how Duluth wants to attract young people here when the only thing businesses offer are part-time jobs or layoffs every few years. Young people need to speak up and change things or our rights will be lost.

The city government reminds me of what happened after 9/11 when no one was on the same page. There needs to be consolidation of many different branches and services.

I just think about how much those library cost us tax payers to build and stock with books. Now that money is tossed to save money for one year. What will happen next year when we are double in the hole what we are now? What will Donny Ness cut next year? What will the schoolboard do when their referendum fails because people are pissed off from the Red Plan?

This is only the beginning.

Judy Gibbs (who I'm pretty sure works/worked for parks & rec) regularly coordinates volunteer park clean up and trail maintenance and the like. The volunteer opportunities are sometimes listed in the paper, and she sends out an e-mail newsletter, too. Judy's contact info is [email protected] or 218-391-0886

Here's some upcoming opportunities, C&Ped from the newsletter:

August 25-29 Congdon Park or MissionTrails I will be working in Congdon Park much of the week, finishing structures and doing some treadway repair, and out at Mission to work on the main trail. Please contact me if you are interested in helping out so i can plan accordingly. I know some of you like doing certain kinds of work...so, contact me and we will make a plan. Thanks

September 8&9 Marshall School Volunteer Day We will be working with tenth grade students from the Marshall School mostly on our trails, in the Rose Garden and at the Zoo. We are looking for folks who would want to help in various locations. Please contact me if you are willing to help out.

Saturday, October 18, 9-12pm - Tipping the Roses! Help out at the Rose Garden near Leif Erickson Park. NO experience with roses is needed, you'll be taught what you will need to know to help get the roses ready for winter 'hibernation.' Dress for the weather and bring plenty of fluids. Bring your favorite work gloves, and a fork or a spade if you have one. For more information or to register, contact Mary Tennis at 218-391-7630.

Mondays, 9-11 am, and Thursdays, 4-6 pm. Summer Pruning sessions in the Rose Garden!! Help out with the pruning of the Roses in the Leif Erickson Rose Garden. Regular sessions scheduled. NO EXPERIENCE is needed! Bring a pruning tool if you have one, but we'll have plenty. Dress for the weather and bring plenty of fluids. For more information or to register, contact Carol Borich at 218-254-2179.

Hello everyone,
We're looking for lots of new, energetic people to volunteer at the main overlook this September and October. Our volunteers are our 'front line' of education at Hawk Ridge, greeting and welcoming our visitors and helping our education staff behind the scenes to keep things running smoothly. Our volunteers need to be sincere, friendly people who will commit to a minimum of 24 volunteer hours between Sept 1 and Oct 31. You don't need to be a hawk identification expert, we'll teach you everything you need to know to be an effective volunteer. We've got 2 training sessions scheduled:
Session 1 (2 nights):
Wed, Aug 27, 6:30-9 pm at "the church" (4401 Glenwood Street)
Thu, Aug 28, 6:30-7:30 pm at Hawk Ridge, Main Overlook
Session 2 (1 afternoon):
Saturday, September 6, 3:00-6:30 pm at "the church"
These training sessions are very important, but if these dates are impossible for you to attend, please contact me to make alternate arrangements. Feel free to call or email me for more information. I hope you can join us!!
Thank you,
Julie OConnor
Volunteer Coordinator/Volunteer
Hawk Ridge Bird Observatory
Duluth, MN
Alternate Email: [email protected]

ANY DAY YOU WANT - we are seeking volunteers. Let me know if you would be interested in participating! Also, seeking volunteers to 'adopt' and walk ALL the city trails to report downed trees or other issues. We would have you walk YOUR favorite trail that you utilize regularly. Let me know!

Andy O.- developers aren't being stopped by the city. Show me a project that did not go through because of the city. Hermantown has its share of problems, too, BTW.

I see many of you say you would gladly pay more in taxes to keep the libraries and parks. To which, I have to ask,

why don't you?

Instead of organizing useless protests (does anyone listen anymore) and worthless letter writing campaigns (circular file), why not start a money drive for the library? Walk around your neighborhood and collect donations. Aluminum can drives. Bake sales. Book sales. Or simply walk up to Donny and hand him your voluntary taxes.

Claire, you could ask that famous writer-friend of yours to donate some of his/her riches to support the library. BTW is it possible to name drop if you don't actually drop a name?

It seems like cities are offering these huge tax breaks and bending over backward to get businesses to come there, from my perspective it doesn't seem like Duluth is doing the same. The number one city for jobs in the entire country is in Plymouth, MN according to a major news source. I have held many jobs in that city over the years and agree that it is great for attracting businesses. They are right next to Maple Grove that has a million restrictions (Can't park a car in your own driveway, no signs taller than about 20 feet in the air, strict pollution controls, etc... So all the yuppies and stores are in Maple Grove and Plymouth is where everyone works. Plymouth was a huge open field 30 years ago and now is where a majority of the jobs in Minnesota are located... Plymouth sucks to live in and has nothing beautiful to look at.

Duluth also faces the issues of geography, but if you look down by the docks there is a lot of old industry that could be replaced by commercial stores that would utilize the lake better.

There is one pier that is piled with garbage, and other areas that sit empty. I suppose St. Paul got around these issues using emminent domain, which I am firmly against, but there is all that tax free land by Garfield sitting there. Most people don't even know Duluth has a mall and all those stores up there.

I would love to imagine a mall area right on the lake getting money flowing into the city. An area like Navy Pier in Chicago would be nice as well. Even having certain areas dedicated to activities like nightlife would help out... Although I do see this happenning more and more. You could go to Carmody's, Fitgers, Sir Ben's, and a few other bars within walking distance. Or Grandmas, Grandmas, Grandmas in Canal Park... Saint Cloud does an awesome job at making the bars a fun place to go. Winnona is the same way... Even in Downtwon Mpls. most of the bars run are situated within a few block radius. I hate that everything in Duluth is so spread out depending on what you want to do. It would be cool if Superior Street was the place for nightlife, and almost is moving in that direction. Canal Park could be for hotels and to trap tourists, and then we could have the expanded DECC are for shopping and larger events, like around other areas and stadiums.

This town could almost support an NHL franchise too, it could be like the Green Bay of hockey?

Just some random thoughts to be taken with a grain of salt.

They were going to put a mall down by the lake but it was stopped. They were also going to bring in a old navy ship a couple of times. One time the gov offered to pay for everything. It was stopped. I really wanted the USS Newport News but it was stopped. I remember the people filling the council chamber opposed to any warship in Duluth. They probably filled the council chambers opposed to the mall too. Sales tax revenue is now down in the city. go figure

How about if the library starts charging for some of its "extra" services? For example, everyone gets 1/2 hour of computer time per week on their library card and if someone wants more than that, they pay extra. Or allow 5 interlibrary loan requests per year and charge for any more than that. Chances are, the people using the most services are able to pay for them in some capacity. I personally have sent two letters to the library seeking volunteer activities because I am a library science graduate student. I did not even receive a response. How many other volunteers have they turned down? I think the library should be doing more to promote itself and to utilize the talents of community residents.

The mall deal went south when it was revealed that the developer didn't have enough $$$ to pull off his end of the bargain (plus he couldn't get an "anchor" store to sign up). It was also suspected by many in town that Mayor Doty had an under-the-table deal in which we would have personally gained benefit. The whole thing smelled fishy. Too bad there hadn't been that much research and investigation into some of the financially lame projects we DID end up with. The boat was a different matter. The majority of Duluth's citizens opposed it and their elected representatives honored that choice. As I recall, it was far from free. In order to be seaworthy enough to tow here it needed $1 million plus in repairs. Additional funds would have been needed to bring it up to a standard of safety that would allow tourists to actually board it- that's not restoration, that's minimum safety. The city's government isn't stopping development from happening. It just doesn't have the best batting average when it comes to the success of the projects it has put money into. (NWA base, GLA, Soft Center, etc.)

I don't think the majority of Duluth citzens opposed the ship. Just the loudest. I remember watching the people come to the microphone one by one at the city council meeting and saying how they opposed the idea. While watching I noticed not all the people were even from Duluth. To me it was just the usual noisemakers getting their way. Another reason Duluth is in the shape it is in today. Funny how Doty could get the fish tank, soft center, cirrus, etc., etc., but someone smelled a fish when it came to a mall. In the end I don't much give a shit one way or the other any more. I'll watch as another generation drink and drug themselves to death. Read their obits and say what a waste but perhaps if they had found a good job. Nothing much changes around here just the faces.

If there is good long-term planning it saves tons in the long run. The mall was built up the hill and look at the money spent on 53... Then look at the mess it is to get there from anywhere on the East side of town. With the DECC expansion they should build all that stuff down there.

I was also thinking, why not offer some companies who have land the city could re-develop land in other places of the city? Like the land Central sits on, or Piedmont. Then the jobs would be in the neighborhoods and save money in driving.

I just got back from Chicago and was amazed at how beautiful it is along the waterfront. Duluth should use them as and example.

Lets burn down Duluth. Push the rubble into the lake and start over.

I think a good way to clear some air in city hall is to sell off the golf courses. Lester and Enger have been neglected and the city just doesnt have the $$$ to make them look nice again. Why not sell them to the highest bidder who has the $$$ to turn them around. We have potential for 2 AMAZING state courses with views of the lake. Why not let someone who could focus all of their time on the course alone take over? Lester and Enger don't have a great profitability history and I think it is something the city doesn't need to worry about. Make the courses a lot nicer and tourists will come a runnin'. Golfing tourists tend to have a little money and don't mind nights out on the town after a round. Take the profits from the sale of the courses and sink it back into where the cuts were made. If we did that and got Dumb ass Pawlenty to cover his end of the deal, Duluth could come out on top!

Library website now lists the following service cuts:

* Home Delivery Service has been suspended
* The Main Library's Computer Lab will be closed, and only four computers with Internet access for the general public will be available. There will be 3 computers with 30-minute turns and 1 with 15-minute turns. Same-day reservations may be made by calling 730-4200.
* Storytimes at the branch libraries have been canceled
* Youth Services will no longer be preparing collections of materials for teachers
* The Teen Read Month (October) and the Family Winter Reading programs have been canceled for this year
* Interlibrary loan request limits have been lowered from 15 to 8 requests active at the same time
* The iFilm series has been suspended.

Hmm, Anarchy is right. The ship was stopped due to CAVES, Citizens Against Virtually Everything. A small but very vocal group in Duluth. However, their power has eroded.

I know from visiting with a couple of City Councilors that they do not vote for issues based on how many emails, phone calls or letters they get. They vote based on their philosophy.

Sad reality is this, Duluth has changed. Many of the most vocal critics of that change here are those that can not handle loss of control over situations. Many alternative solutions offered here are not realistic at all, for example, selling the GLA-there is a slight problem with the title holder.

Interesting how impassioned people are though, but again, the times in Duluth have already changed and you either jump on board with the changes, or drown in your tears, but the days of the CAVE are over.

The Des Moines was stopped because it was monolithic and ugly, it would have cluttered up the harbor, it had no earthly connection with Duluth, and many war Veterans opposed its being here.

It's so easy to fall back on stereotypes like "CAVE" people - as I recall, that was a Doty 'witticism' - Seriously, is that the best you can do?

"The power of accurate observation is commonly called cynicism by those who haven't got it." George Bernard Shaw

GFTNC = Hilarious!

I agree the Des was ugly. I wanted to see the Newport News as it was the first one that people tried to bring here. Now the Newport News did have something local to it as I did spend one drunken night aboard with my friend from Wi. Also to me it was a beauty. The many war veterans you speak of were the usual few. They do not speak for most veterans. I'll bet old Andy and the wife were there. I always say hi to Andy when I see him. Great guy. If anyone has a right to speak out it is a veteran.

Thanks for posting that info from the library website, eco eco. Very sad.

Part of me wonders, though--would it be possible to set up some volunteer networks to pick up some of those projects? I mean, obviously for some of those services listed above, you'd need a trained librarian/staff person to field them--but for something like home deliveries, I wonder if they could put together a "Meals on Wheels"-style project? Even if it were more limited in scope than whatever they had before, maybe it'd fill in some of the gaps for the time being.

And for something like storytime--you wouldn't necessarily need a librarian to tackle that, would you? I know some of the women who lead those over here by Ashland are retired teachers & such...

I know getting volunteers isn't going to fix everything, but well, it sounds like there's a lot of supportive community spirit welling up toward the libraries/parks right now, so maybe in some ways it'd be an ideal time to get the ball rolling...

AFSCME and DFD unions have robbed the citizens of this community of the services such as the library.

The Duluth Fire Dept. is the most expensive fire dept. per capita in the state of minnesota. Duluth is the #1 most expensive unfunded City in the entire US. These are dubious distinctions all because of these greedy unions.

Year's of poor management an ungodly benefits have driven Duluth to where it is. Very soon, a Federal Judge in St. Paul, that no one has ever heard of, will make all of the decisions for the City of Duluth.

It would serve the unions in Duluth well to review the Northwest Airlines bankruptcy rulings. The unions were stripped of everything. Years of insatiable greed have driven us to the brink.

The legacy left by Kemp, Netland and Roadfeldt will be that they were the 21st Century Robber Barrons. Tell me, what will the unions do when their wages, job positions and benefits are stripped from them by a Federal Judge and all of those politicians they claim to have in their back pocket on the council can do nothing for them.

Finally, Bravo to Jay Fosle for standing up to the greedy bastards last night in the council chambers. Telling them he would not be intimidated by their phone calls, emails and signs in council chambers.

The day of the union in Duluth is over. Alan, Ken and Eric, practice the phrase "Yes sir, your honor!"

May 7 (Bloomberg) -- Vallejo, California, officials voted to file for bankruptcy because the San Francisco suburb isn't able pay its bills after costs for police and firefighters soared and the housing market's slide cut into tax revenue.

The city council's unanimous decision last night will make Vallejo the largest California city to file for bankruptcy and the first in the state to seek protection from creditors because it ran out of money to pay for basic services. The decision came after it failed to win salary concessions from labor unions.

The city of 117,000 is facing ballooning labor costs and declining housing-related tax revenue that have left it with a $16 million deficit forecast for the year starting in July. In bankruptcy, creditors will be kept at bay while officials devise a plan to balance the books. City services would still operate.

``Nobody wants bankruptcy, but there doesn't appear to be a whole lot of options left,'' said city councilwoman Joanne Schivley. ``We are going to be out of money by June 30. It's all a numbers game now.''

Cities and towns rarely go bankrupt. Since 1937 there have been 543 municipal bankruptcies, two-thirds of which were small tax districts established to sell municipal bonds for projects, according to James Spiotto, a municipal bankruptcy specialist at Chapman and Cutler LLP in Chicago.

The last California city to file was Desert Hot Springs, a town of 20,000 north of Palm Springs that was hit with a legal judgment it couldn't afford. Orange County filed in 1994 amid bad bets on derivatives.

Cost Squeeze

Vallejo's plight stems from rising pay for police and firefighters under current labor contracts, including minimum staffing requirements, which have caused overtime compensation to increase. The problems were compounded by plunging home values, declining retail sales, and a slowdown in new housing development that cut $5 million from the city's revenue projections between June and February. The closure of the local Wal-Mart store also pinched the city's sales tax receipts.

Police and firefighting salaries, pension and overtime consume almost 80 percent of Vallejo's $89 million general fund budget. Cities in California on average spend about 60 percent of their budgets on firefighter and police salaries, according to the League of California Cities.

City and labor union officials have been meeting since January to revise the existing contracts. The unions have balked at pay cuts. By filing for bankruptcy, Vallejo is asking a judge to step in and force salary concessions from the labor unions.

Judge's Decision

Once Vallejo files its petition, a federal bankruptcy judge must decide whether the city is actually insolvent. If so, the case can proceed. If the judge rules Vallejo isn't legally broke, the case would be dismissed, said the city's bankruptcy attorney Marc Levinson of Orrick, Herrington & Sutcliffe.

The fiscal strains afflicting Vallejo are reverberating across the U.S., as a housing slump and slowing economy curb revenue for states and local governments. Even so, no other California city, including those bordering Vallejo, has been pushed into insolvency because their revenue wasn't enough to pay day-to-day expenses.

Vallejo may be a unique case, given that no municipalities in areas such as Riverside County that have been hardest hit by the housing market rout are known to be considering bankruptcy, said Standard & Poor's analyst David Hitchcock.


Some residents are angry at city officials.

``It's a sad day when the officials we elected to lead this city just throw up their hands,'' resident Kenneth Shoemaker told the board prior to the vote.

U.S. state sales-tax collections fell in the first quarter for the first time in six years, according to a study by the Nelson A. Rockefeller Institute of Government in Albany, New York.

California Governor Arnold Schwarzenegger's office predicted the state's budget deficit may reach $20 billion, more than twice the size of previous estimates and enough to account for nearly one-fifth of the budget. States overall expect to have at least $26 billion less than they need to pay bills in the next budget year, according to an April report by the National Conference of State Legislatures.

S&P today lowered the ratings on Vallejo's certificates of participation, a type of bond backed by its share of the state's vehicle license fees, to B from A, given the uncertainty of how the revenue source would be dealt with under bankruptcy, the rating company said in a statement. It also lowered the rating on Vallejo Public Financing Authority's bonds to B from A-.

`Difficult Day'

Orange County in Southern California filed the biggest municipal bankruptcy in U.S. history in December 1994 after former Treasurer Robert Citron's wrong-way bet on interest-rate derivatives lost $1.6 billion. The county of 3 million people is the third-most populous in California after Los Angeles and San Diego Counties.

``It's a sad and difficult day in Vallejo,'' said Orange County Treasurer Chriss Street. ``Now, it's time to stop the blame game and time to start the management game. People need to start understanding that there's a pot of money and it can only go so far. The city is going to need learn to live with different expectations.''

Vallejo, on the San Francisco Bay, was home to the West Coast's first shipyard, and residents say its economy never recovered after it was shuttered in 1996 as the U.S. military closed facilities after the end of the Cold War.

Hard Hit

The area has since been one of the hardest hit in Northern California by the housing market slump. Home prices in Solano County, where the town resides, dropped 19 percent in January from the year before, according to DataQuick Information Systems, a firm which tracks real-estate markets in the state.

There are currently 1,214 ``real estate owned'' homes in Vallejo, meaning that the homeowners have been foreclosed and their lenders now own the houses, according to Irvine, California-based RealtyTrac, which sells data on foreclosures. Another 1,014 properties are in the foreclosure process, and 464 houses are scheduled to be auctioned.

By The Record
August 24, 2008 6:00 AM
Vallejo, which three months ago became the largest California city to declare bankruptcy, is facing a new problem: an exodus of experienced police officers.

A shortage of qualified police candidates statewide makes moving elsewhere fairly easy. Cities throughout the state actively recruit from other departments, a pattern that has triggered a round-robin salary and benefits war among the jurisdictions.

It also is buckling municipal budgets already suffering through a steep economic downturn that has cut deeply into revenue.

Stockton, for example, gets the bulk of its general fund revenue from two sources: sales and property taxes. The downturn has taken a toll on both so much so that the city is scrambling to patch a deficit of at least $10 million.

In Vallejo, a city less than half the size of Stockton, the budget problems are even greater. It's facing a $16 million shortfall.

City officials blame their financial problems on the downturn, but also on increasing costs for police and firefighters.

Vallejo officers understandably chaff at that. Among the 25 who'veleft the city and 18 others who've applied for jobs elsewhere are those who grew irritated with being blamed for the budget problems.

The fact that more than 40 officers have left or are trying to get out of the department of 120 officers shows how deep their resentment has grown, how concerned they are about the city's financial future, and how vigorously they are being recruited by other cities.

Still, something has to give, and that's why Vallejo is in court trying to get out from under its labor contracts.

Vallejo is being watched by other cities, including Stockton where a deficit looms and the city and police union are at loggerheads over the size of a raise the officers say they have coming.

Last week, council members met behind closed doors presumably to decide how to react to a demand by police that a 2005 memorandum of understanding be honored. It calls for a 15 percent raise; the city has budgeted a 9.5 percent raise, a raise that would be considered most generous by anyone in the private sector. Especially these days.

Just as in Vallejo, something has to give in Stockton. The taxpayers, it would seem, have given enough.

By TERENCE CHEA Associated Press Writer
Article Launched: 08/17/2008 11:32:21 AM PDT

VALLEJO, Calif.—Three months after it became the largest California city to declare bankruptcy, this San Francisco suburb is facing an exodus of police officers as residents grow anxious about a surge in robberies and other crimes.
Vallejo, a scrappy city of 120,000, filed for Chapter 9 bankruptcy protection in May, blaming its fiscal woes on shrinking tax revenue and escalating costs for police and firefighters.
Now a growing number of officers are helping to reduce the city's payroll expenses—by leaving the police department. About 25 of its 150 officers have retired or left for other law enforcement agencies over the past year, and at least 18 more are in the process of applying for jobs elsewhere in Northern California, where cops are in high demand, according to Lt. Richard Nichelman, a department spokesman.
Some officers say they're worried about their personal finances, burnt out from working overtime and tired of being blamed for the city's budget problems. Meanwhile, other police departments are eager to hire them.
After five years in Vallejo, Joshua Coleman quit in June to join the Napa Police Department, where he said he's getting paid more to work in a city with less crime and more stable finances.
"When they decided they were going to go to bankruptcy, I said that's it. I don't want to stick around to find out what bankruptcy is like," said Coleman, 25, who is a new father. "What's going to happen to my family if I

take a pay cut or I get laid off? How long would I be able to make it?"
Vallejo, which faces a $16 million budget shortfall in its current fiscal year, is seeking to renegotiate labor contracts, which city officials say are unaffordable. A federal bankruptcy judge in Sacramento is expected to decide later this month whether the city meets the criteria for Chapter 9 bankruptcy.
Experts say other American cities and counties could be forced into bankruptcy as the economic downturn wreaks havoc on their budgets. Many municipalities are also saddled with labor contracts they can't afford and are watching to see if Vallejo can get out of those agreements through bankruptcy.
Alabama's Jefferson County could be headed for the biggest municipal bankruptcy in U.S. history. Facing a $3.2 billion debt from corruption-ridden sewer project, commissioners decided Thursday to allow residents to vote on a nonbinding referendum in November on whether to file for bankruptcy.
Vallejo traditionally has hired experienced officers from other cities, but many of them are now being aggressively recruited by other Northern California agencies.
Tim Nichols, 35, joined the Vallejo Police Department about three years ago after nine years as an officer in San Francisco. But he left in June to accept a job with the Elk Grove Police Department in the Sacramento area where he lives with his family.
"I definitely wanted to stay ... but as the head of a household, I can't just think about my future, I have to consider my family's as well," Nichols said. "I was concerned it was no longer going to be feasible to work there, that I couldn't stay solvent as a person with a family."
The department has had to dismantle its narcotics unit, take officers out of schools and reduce the number of street patrols. Police now focus on violent crimes, but have less time to investigate burglaries, identity theft, vandalism and other "quality of life issues," Nichelman said.
Meanwhile, robberies over the past six months have been up by about 20 percent from last year, though homicides remain about the same, he said. Police are worried that would-be criminals know there are less officers in Vallejo, making it a more attractive target.
"We can only spread ourselves so thin," said Nichelman. "We just don't have the resources. The bad guys are smart enough to know it makes it far more fertile ground for them."
Councilwoman Stephanie Gomes accused the police officers union of "trying to create chaos in the community to frighten people," noting that crime is up in other Bay Area cities, in part because people become more desperate when the economy slows.
Gomes, a member of the council that voted unanimously for bankruptcy, said the city would be able to offer competitive pay to police officers once it restructures its finances.
"Right now our pay and benefits are too high, and we simply can't afford them," she said. "The Vallejo Police Department will be able to offer very good benefits and salary in the future. Will it be at the Lexus level? No, but it will still be very competitive."
Some residents say they're increasingly worried about their safety with fewer cops to respond to emergencies and patrol the streets.
Elisabeth Smith, 49, who has lived in Vallejo her whole life, said her barber shop was broken into three times this past spring, suffering about $3,000 in losses from damage and stolen cash.
Smith, who previously had little problem with crime during 22 years running the business, said she was disappointed that the officer who responded to the third break-in in April did little more than write up a police report.
"They didn't do anything for me—nothing, not even a follow-up. If this would have happened in the past, they would have done all that," Smith said. "People don't call the police anymore unless it has to do with violence or somebody's injured because there's nothing they can do."
Gaggan and Kiran Sooch, who own a gas station in Vallejo, said their house was burglarized late last year, and they know several other families whose homes have been robbed recently. As far as they know, no one has been arrested for the break-ins.
They've also noticed it takes longer for police to respond to calls. They said it took 45 minutes for an officer to arrive last month when they called for help with panhandlers who had harassed customers and laughed at their threats to call police.
"They were very confident they could get away with it," Gaggan Sooch, 36, said. "If more officers leave, more people are going to get encouraged to do more of these kinds of things."
Councilwoman Joanne Schivley said she's concerned about officers leaving Vallejo, but still believes the city had no choice but to declare bankruptcy.
"You can't call people into work if you can't pay them," she said. "We were about to run out of money."

Realizing this might be even worse his them than a lesser labor agreement -- bankruptcy has the potential to cause suspension of all union agreements with the city -- Vallejo union bosses at the last moment before the official filing offered to take $10.6 million per year worth of pay cuts for two years, with police and firefighters offering a 6.5 percent giveback of pay and benefits and other employees proposing a 3 percent reduction, plus foregoing two years worth of 10 percent raises.

Of course, the entire Vallejo crisis would never have happened if the public employee unions had not been so aggressive in their negotiating over the previous few years.

Some public employee unions have actually learned from all this, even if Rialto's did not. In San Diego, the Municipal Employees Assn. offered a plan for cutting its own pension benefits by $25.4 million per year, seeking to avert a tougher plan proposed by Mayor Jerry Sanders.

But other unions and retiree groups have learned nothing. Retired employees of the Fresno Unified school district, for one, are suing their ex-employer for partially reneging on a 30-year-old pledge to provide health benefits for life. Since 2005, the district has forced retirees to pay for some of their benefits.

Feeling betrayed, retirees who years ago were recruited to the district in part with the pledge of perpetual free benefits, sued and the outcome is not yet determined.

That lawsuit and the Rialto agreement fly in the face of today's reality. With home foreclosures causing reductions in real estate values and property taxes, plus a nascent recession spurring drops in sales tax revenues, cities, counties and school districts don't have as much money as they once did.

Unions that don't face this reality risk municipal bankruptcies and loss of many of their hard-fought gains.

All of which means it is high time for public employee unions to accept, as San Diego's plainly have, the truth of the old saying that half a loaf is better than none.

Thomas D. Elias is a syndicated columnist on California issues.

These worms make taxpayers squirm
Despite troubling results of excessive pension increases for government workers, local Orange County officials haven't learned to put taxpayers above the unions

Steven Greenhut
Sr. editorial writer and columnist
The Orange County Register
[email protected]
Comments 1 | Recommend 2
An old friend of mine taught me this saying: "Even the worm learns." He cited some obscure scientific study showing that if one pokes a worm with a stick every time it moves in a certain direction, the wriggling creature eventually will choose a different direction. The point (made all the more enjoyable as he told it in his thick West Virginia drawl): Worms are among the dumbest creatures on Earth, yet even they will change their behavior in response to some painful outcome if one is patient enough. If worms can learn from their mistakes, there's no reason that even the dimmest human beings can't also eventually learn important lessons.
My friend is a kind soul with enduring faith in humanity, so I admire his optimism. But he never had the displeasure of writing about local and state government, so he never considered a possible exception to his rule: politicians. This organism has a similar spinal structure to a worm (no skeleton, so they can bend with little effort) but often seems impervious to learning any meaningful lessons.
For instance, the United States is facing massive financial problems caused by the granting of unsustainable pension and medical benefits to government workers and dependents. Most people are familiar with the problems of Social Security and Medicare. A 2004 USA Today article captured the problem succinctly: "The long-term economic health of the United States is threatened by $53 trillion in government debts and liabilities that start to come due in four years when baby boomers begin to retire." Those four years are up, by the way.
The Bay Area city of Vallejo has been in the news lately for declaring bankruptcy and perhaps facing a state takeover after city officials gave government unions – especially police and fire unions – CEO-level pay and benefit packages that have consumed more than three-quarters of the city's $80 million general-fund budget and have led to massive shortfalls. As Governing magazine reported in July, "Other troubled municipalities – particularly those in California – are watching Vallejo to see if bankruptcy is a viable approach to freeing the city from what Vallejo officials see as burdensome employee contracts." In the private sector, excessive benefits paid to union employees are threatening the continued existence of such iconic corporations as General Motors and Ford.
So what are local city officials doing in the face of this daunting evidence that pension-spiking is unsustainable? Spiking pensions, of course, and putting their taxpayers at risk of a Vallejo-like scenario. They've learned nothing. The offenders in recent days include Santa Ana council members, who Monday gave final approval to a plan to increase city worker pensions to a "2.7 at 55" formula. That means that city workers can retire at age 55 with as much as 81 percent of their final year's pay (2.7 percent times the final year's salary times the number of years worked) after 30 years on the job. Those who are about to retire get the new enhancement, anyway, thanks to the retroactive portion. (This is the old law enforcement formula. Now, police and firefighters can retire with 90 percent or more of their pay at age 50.)
This new benefit increase, granted with little debate, will impose enormous new taxpayer-backed liabilities on residents of a city that's already incapable of even meeting its most basic responsibilities.
Orange County Supervisor John Moorlach, one of the few nonwormlike politicians willing to stand up to union demands, had this to say in a recent e-mail about Santa Ana's plan: "What is infuriating to me is that some cities can't even afford to fix the potholes in their streets. How can they afford to take on additional pension liabilities? In the near future, when a city council votes to put a 'pothole tax' on their ballot, don't you buy it; it will really be a 'pension enhancement/wealth transfer tax.'"
Fullerton also is involved in a pension-spiking scheme for its employees. Officials there are angry that one councilmember, Shawn Nelson, blew the whistle on the behind-closed-doors plan to spike pensions retroactively by 25 percent. As these things usually go, everyone is in on the deal (council members, staff who "represent" the city and the union) and then a deal that is fully negotiated in closed session is quietly placed on the public meeting agenda. There's rarely time for opposition to grow, given how stealthily this is typically done. Then, before you know it, the employees walk away with taxpayer loot.
Because officials are quietly trying to approve these pension enhancements, we've yet to hear any argument for why they are doing this. Beyond Nelson, none of the council members even admit this is being discussed! The union members I've heard from echo the same old argument: We deserve it because we work hard, and others are getting more than we get. This just shows the depth of the entitlement mentality within the isolated world of government.
Writing about the Fullerton deal, the Long Beach Press-Telegram captured the nature of these rigged negotiations: "'Negotiating' is a ridiculous term for what's going on, which is raw self-dealing. Everybody involved benefits, from the elected politicians who expect help at election time, to city 'negotiators' who, of course, will get the 25 percent increase, too."
By the way, the publicity surrounding the deal didn't shame City Council members into backing away from their proposal, but moved them Tuesday night to lecture Nelson about proper protocols surrounding the discussion of closed-door sessions. Again, these folks learn nothing.
But there's no excuse for not knowing about the huge problems that local governments are facing because of deluxe pension promises. Pension issues have remained in the news in Orange County, in particular, given that the county's pension plans are woefully underfunded – by a meager 73 percent, with a stunning $2.9 billion in pension debts over time.
In 2004, the Board of Supervisors voted 3-2 to retroactively spike pensions for most county employees – granting them a guaranteed retirement of 81 percent of their final year's pay at age 55 after 30 years of work. While most private-sector employees must rely on the performance of the stock market and their 401-k plans, county employees have a guarantee from taxpayers, regardless of how poorly the economy performs. In 2001, then-Supervisors Jim Silva and Todd Spitzer (both now in the Assembly) led the charge for a retroactive pension spike for deputies – something that has added about $400 million to the county's unfunded liabilities. This is a bipartisan game, with even Republican politicians still defending unconscionable pension votes.
Last month, after board Chairman Moorlach introduced a measure to place on the November ballot an initiative requiring voter approval of any pension increases, another supervisor argued that it was about 10 years too late. Yes, the measure was late, considering what happened in '01 and '04, but the Fullerton and Santa Ana deals prove that it's never too late to take control of the situation given how slow politicians can be to listen to taxpayers when they are under the sway of a powerful special-interest group.
Fullerton and Santa Ana council members are worse than worms, but at least the current Board of Supervisors has learned something in its 5-0 approval of that ballot measure. The county measure doesn't apply to O.C. cities, but it's a great blueprint for what's needed in every municipality in this county. In liberal San Francisco, where such a measure has long been in place, the pension plan is well funded at 107 percent.
Here's a lesson for all of us: Politicians will never put you above their union allies, so we need to take such decision-making out of the hands of these spineless and unteachable creatures.
Contact the writer: [email protected] or 714-796-7823

Fading opportunities

Long before its bankruptcy filing, Vallejo had been an economic haven and a thriving bedroom community known as the City of Opportunity.

Through the 1980s, thousands of commuters were enticed by the town's affordable homes, the fresh bay breezes, the nearby wine country of Napa Valley. A Six Flags theme park and the naval shipyard, which built hundreds of warships and nuclear submarines since the 19th century, anchored the local economy.

But after the shipyard closed 10 years ago, the economy sputtered and, some say, never fully recovered.

Then the mortgage crisis struck last year. The weak housing market throttled Vallejo's revenue growth to 3%, while labor costs for the city's police officers and firemen rose 11%.

Vallejo has cut 87 jobs and slashed funding for parks, a library, a senior citizens' center and other public services. City and labor leaders agreed this year to temporarily roll back union salaries 6%, but it wasn't enough to hold off the bankruptcy filing.

Meanwhile, the housing crisis seems to worsen in some regions.

According to RealtyTrac, an online foreclosure research firm, foreclosures in California have doubled to 381,000 this year compared with the same period in 2007. In Vallejo, foreclosures rose 61% to 2,900 in the first six months of this year, compared with the same time in 2007.

Carol Hardy, interim executive director of Vallejo Neighborhood Housing Services, says that phone calls from financially strapped homeowners in Vallejo have poured in by the hundreds recently.

Many have received foreclosure warnings from lenders, or they're having trouble making higher mortgage payments when their adjustable interest rates rise.

"They were refinancing their homes like ATMs," Hardy says. "They weren't thinking two steps ahead, to what happens when their loan readjusts."

While residents wrestle with possible foreclosure, the city and its unions — the Vallejo Police Officers Association, the International Association of Fire Fighters and the International Brotherhood of Electrical Workers — gird for legal battle this week.

In court papers, the unions contend that Vallejo is not bankrupt, that it still is paying bondholders and that it had $136 million in cash when it filed for bankruptcy. The filing, the unions allege, is a ploy to force the unions to renegotiate their contracts.

Harvey M. Rose Associates, a San Francisco accounting firm hired by the unions, states in a court filing that Vallejo could balance its budget and build a surplus of millions of dollars by slashing costs, selling city land and increasing fees and assessments.

Unlike similar nearby towns, such as Richmond, that boast more diverse and thriving economies, Vallejo did not rejuvenate its economy and tax base enough to ward off financial woes, says Dean Gloster, an attorney at Farella Braun & Martel, who represents the unions.

"The truth is that Vallejo has been in serious financial trouble for over a decade," he says. "It's a very poorly managed city."

Vallejo officials say in court filings that the mortgage meltdown and high labor salaries and benefits, rising to $79 million in the current fiscal year, have forced the city to file for bankruptcy. The city, they argue, cannot balance its budget unless the unions make concessions.

Marc Levinson, a lawyer at Orrick Herrington & Sutcliffe, who represents Vallejo, denies that the city is sitting on $136 million in cash and assets, or that Vallejo "deliberately manufactured bankruptcy to break its labor contracts." He contends that the Rose report is flawed.

Says Levinson, "The city can't afford to pay the contracts. The city has cut to the bone. There is nowhere else to go."

A tough fight ahead

If similar bankruptcy cases are any indication, the unions face a tough legal fight, according to Bruce Bennett, an attorney at Hennigan Bennett & Dorman, who worked on the Orange County bankruptcy and is not involved in Vallejo's case.

"There were extensive negotiations prior to the case," says Bennett, who read the key bankruptcy filings, "and it does not appear the city has misrepresented its actual, current financial condition."

Beyond the filing, Vallejo's economy — mostly retailing, business services and manufacturing — could get a boost from development projects and a $300 million cancer research center planned by Touro Universityon Mare Island.

Back on Tennessee Street, the quiet main road from the highway to Mare Island, contractor Golovich waves at friends and business people driving by. The economy, he believes, will start rumbling soon.

"This street is going to be booming again, I'm certain of it," he says. "You can see the traffic picking up now."

City employees report news Web site blocked

Staff unable to access timesheraldonline.com
By JESSICA A. YORK/Times-Herald staff writer
Article Launched: 08/26/2008 06:46:54 AM PDT

Vallejo city employees were blocked from accessing at least one news Web site Monday in an effort to cut down on "political blogging," said City Manager Joseph Tanner.
Tanner said the move was to prevent city employees from posting public comments on what he described as political sites, leaving the details of that directive to the city Internet technology department's staff. For much of Monday, the entire Times-Herald Web site was inaccessible, city employees confirmed.

The move comes just days after Tanner ordered on-duty employees to funnel reporters through a city spokesperson concerning the city's continuing Chapter 9 bankruptcy case.

"They can't blog on your site or the VIB (Vallejo is Burning) site, I'm an equal opportunity blocker," Tanner told the Times-Herald on Monday.

But at least two city employees who asked that their names not be published, said that while they were denied access to the Times-Herald site, they could access the VIB site on Monday.

Tanner said he instituted the block after Chief Information Officer Gonzalo Gonzalez told him that employees were "blogging" on city time and with city computers.

Tanner was referring to Web sites that allow readers to post written comments, such as at the end of Times-Herald articles or on the privately run site Vallejo is Burning.

The Times-Herald reader comment sections have experienced more than 1,000 postings concerning bankruptcy in the past week alone, said Times-Herald Editor Ted Vollmer.



many of those messages were from city employees is unknown since most of those sending messages don't identify themselves by name, Vollmer said. There also is no way for the Times-Herald to determine which city employees posted comments on the more than 3,000 comment threads created since January, he added.
When told that employees had reported that the VIB site had not been blocked, Tanner said he believed that city employees had been denied access to both the Times-Herald and the VIB site. He said he did not recall when he issued the directive to block access.

Gonzalez, meanwhile, declined to comment Monday without approval from his superior, Finance Director Rob Stout. Stout did not return multiple calls to his office.

Mayor Osby Davis said the newspaper site was blocked, but that the restrictions soon would be reduced to only the comments section of Web sites.

"I understand that that is going to change," Davis said. "The intent was to block access to the blogs. Not only the Times-Herald, but the political blogs and VIB. ... They will not be able to go into any blogs on any site, is my understanding is what the city is trying to do. "

Tanner added though he left it up to Gonzalez's discretion as to which sites should be blocked, he expected that political sites ranging from the national presidential race down through local politics should be included.

"If it's a political blog, you should not be blogging on city equipment on city time," Tanner said. "That should be a policy lasting forever. It's not even bankruptcy-related. It should have been a policy a long time ago."

JoAnn West, hired to speak for the city on bankruptcy matters, said the move was in keeping with city policy.

"The city has a policy that employees are not supposed to do personal business or use the Web, the Internet, for personal business," West said. "There are numerous Web sites that are blocked for that reason.

Additional Web sites were blocked, I don't know if was today or if it was Friday," West said. "I don't know when that happened, that includes blogs that employees have been accessing on duty."

• E-mail Jessica A. York at [email protected] or call 553-6834.

This isn't meant to be mean spirited, but why can't people who want to keep the libraries open and say they are willing to pay more taxes simply cut a check to the city right now? Sorry, but I am not willing to pay any more taxes and I have two small children who use the libraries. Is that not a viable solution instead of taking housing money away from low income people? Put your money where your mouth is. You'll have tyo guesstimate the percentage of people willing to pay more taxes to base what you would actually pay. That might be difficult.

Sadly, I think it is over for Duluth, Bankruptcy is just a few short months off. The healthcare liability at $300 million, plus the budget deficits are just too much in the liability column.

Duluth should bie the bullet, file Chaper 9 and start fresh. Having a judge come in and run the show for awhile I am sure would be a great relief for the Admin. and the Union. It will take all of the politics out of this fiasco.

I hear now there's talk of volunteers staffing libraries. How about we cut funding to Visit Duluth and have volunteers help design billboards and write press releases touting Duluth's attractions? It makes more sense than having volunteers staff libraries AND people could pick up some great skills this way. We could save a lot of money we give to fund that bloated organization too!

This really is not the time for on the job training of volunteers to staff Visit Duluth. There are people there with many years of professional experience that execute their jobs very well.

The very notion that the gist of their jobs is designing billboards is insulting at best. I would invite anyone here to start from scratch and go land a convention group.

As Brian Daugherty pointed out the other night at the council meeting, the Citizens of Duluth are the largest beneficiaries of the tourism tax and VisitDuluth. The profit margin of the owners of tourist oriented businesses is smaller than that of which the City receives.

It would be greatly appreciated if the arm-chair quaterbacks could perhaps not chime in with their "expert" knowledge when they actually have none or very little.

You lose a great deal of credibility when you make comments about billboards and on the job training for volunteers.

Reinert was so right when he told me that many people have such little information and are poorly educated about the depth of the issues at stake.

Often it is much better to listen than to speak.

Yeah. How dare us citizens of Duluth NOT bow down to VisitDuluth and collectively say "thank you sir for the benefits you have provided us".

Sorry...but a group of volunteer citizens could very well help bring the tourists up here just as much as they could run libraries (and...quite possibly...put out fires). We just need some citizens to get off their asses and do it.

And with that, I am imposing a ban on myself from posting here on the PDD for a few days. I'm even starting to get sick of seeing my shit on here. Try to hold the applause down everyone.

Hell Danny, take a couple weeks off. You've earned it, big guy. Get those misshapen genitals looked at. Hey, y'know you could never come back and we'd be a richer, better informed community for your absence. Vaya con dios hombre.

Dear Diary --

You have your opinion about Visit Duluth. I have mine based on, yes indeedy, my "expert" knowledge. And, believe you me, I've written some kick ass press releases in my day. Haven't designed any billboards though. Probably easier than shelving books at the library, that Dewey system can be pretty damn confusing.

Seriously, Dear Diary, you missed my point. Having volunteers staff the libraries is just as ludicrous as having volunteers touting Duluth's charms for Visit Duluth. Actually, it's even more ludicrous, if you want my honest opinion.

From a purely logical standpoint, one needs to ask which thing can best assist in Duluth's financial stability. Libraries or tourism? The two are apples and oranges, with each bringing something of value ot Duluth. BUT, which one, if cut, would hurt Duluth's finances?

And remember, messing with the Visit Duluth contract opens up a new can of worms. That sends the message that Duluth can break contracts as need be. I remember Fedora saing that this could mean the contract with AFSCME could be broken too. Is THAT an option?

I strongly feel that the libraries and parks & rec should not bear the brunt of this budget deficit. How about spreading the pain a little more, so we're not totally shortchanging local residents, while kowtowing to the tourist industry? Libraries or tourism. . . .I don't see it as either/or. We need to think of *both* in this city. Don't we want to maintain our high quality of life, don't we want to live in a city that retains young people, because there's stuff for them here? Or do we want to live in a city that's all about tourists, that'll look like some 3rd World city, where you walk three blocks away from glittering and glamorous tourist districts and see filthy parks and public areas, strewn with trash, and youth loitering around, b/c there's nowhere for them to go, nothing for them to do? We're *all* in this together, Scribbler, or we should be, and everything should be put out there on the table in an effort to solve this crisis in away that doesn't shortchange locals, but also doesn't decimate efforts to entice tourists to Duluth. *That's* what I'm sayin'.

Tim K.
Spirit Mt. Development project was just one project killed by the City of Duluth. Why do you think it is business goes to Hermantown, the view?


Visit Duluth debunks bloggers facts on tourism in Duluth:

Terry Mattson: Don’t be fooled — tourism taxes are not subsidies
Terry Mattson Budgeteer News
Published Thursday, August 28, 2008
Terry Mattson is the President and CEO of Visit Duluth.

Before we go any further on the subject of the tourism tax, everyone needs to first understand it is not a subsidy to any hotels or restaurants. Hotel and restaurant owners voluntarily collect and pay this tax — above and beyond mandatory taxes — specifically for citywide economic development and the common good. By design, any voluntary, specially designated tax or fee has to go toward a specific, intended purpose. The tourism tax is not general-fund money, nor is it a subsidy.
In Duluth, the tourism tax is anything but a sacred cow.

Duluth has its own very unique set of tourism tax rules. When held up to industry standards, Duluth’s tourism tax structure has evolved into something very peculiar compared to its spirit and intent. Hoteliers and restaurateurs are concerned too much money is already going places they never dreamed. More transfers are a dangerous precedent.

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Terry Mattson Complete Archive
Terry Mattson Archive Large portions of these taxes already offset general fund expenses incurred by city departments in supporting un-prescribed tourism-related activities and improvements.
Many say Duluth city government has too liberal a definition as to what is tourism-related compared to the attorney general. The city administration even admits it is pushing the envelope when it comes to general-fund transfers.

All of this means that hotels and restaurants are sharing the pain of the city’s budget crisis. Yet, some councilors and special interests want even more of the money, which is supposed to be used to reach millions of consumers with a cohesive Duluth brand.

The model of self-taxation is one of efficiency. By pooling monies and skillfully operating a professional destination marketing organization — Visit Duluth — the destination’s marketing efforts are stronger and more effective than anything several hundreds of businesses could accomplish on their own.

$1.2 million already going to general fund

It’s time to correct the rhetoric and look at the tourism tax.

Under state law, municipalities can retain 5 percent of the first 3 percent of hotel-owner imposed lodging taxes. The 5 percent retainer represents a fee for setting up and administering the collection.

Under that state statute, city hall is entitled to transfer $78,500 to its general fund in 2008. Assuming the 5 percent administrative retainer was applied across the board to Duluth’s series of tourism taxes totaling $5.9 million of anticipated 2008 revenue, the transfer would be $295,000.

This year, Duluth city government will transfer approximately $1.2 million of tourism tax to its general fund. That’s a difference of $905,000.

Under state law, 95 percent of all proceeds from hotel owner-imposed (local option) lodging tax collections must be used to fund the local convention and visitors bureau for the specific definition of marketing and promoting the area as a tourism or convention area.

If we focus on the first 3 percent of lodging taxes (Duluth actually has a total of 6.5 percent hotel owner-imposed tax), Visit Duluth, the city’s convention and visitors’ bureau, would be guaranteed $1,491,500 based on 2008 anticipated revenue. Yet the city council and administration are once again grappling over Visit Duluth’s contract, which is actually $59,300 shy of the minimum guaranteed under state statute.

There’s more to consider.

Under a contract modified for loose interpretation while based on our unorthodox city formula, Visit Duluth receives 33.25 percent of the 3 percent hotel/motel tax enacted in 1969, 33.25 percent of the 1 percent food/beverage tax enacted in 1977 and, finally, 33.25 percent of the 1 percent hotel/motel tax enacted in 1980.

Where do the rest of the taxes go?

Several wonderful Duluth amenities receive the lion’s share of Duluth’s tourism tax revenues to cover operating expenses and debt service.

It should be noted these amenities are enjoyed as much, if not more, by locals than the non-residents attracted by Visit Duluth. Without the tourism tax, Duluthians would not have the DECC, Spirit Mountain, Great Lakes Aquarium and Lakewalk, to name a few. We are lucky to have these amenities, which also bring exponentially more revenues to town than they ever cost to build.

These public enhancements have been financed through additional tourism taxes, a common way of doing business everywhere. However, when other communities add tax increases for capital expansion, they typically earmark portions of the new taxes for the convention and visitors bureau to meet the obvious additional marketing needs.

While some folks believe that happened in Duluth because Visit Duluth receives a small portion of many of these taxes, simple math reveals the budget is not funded at a minimum level, let alone keeping pace with the destination’s capacity (which has doubled).

Unlike in “Field of Dreams,” there are no mystical visitors who magically appear just because we built “it.”

Focus on generating more revenue

In the United States on average, local convention and visitors bureaus receive 55 percent of all lodging taxes collected. Based on that, Visit Duluth’s 2008 funding would be nearly $400,000 more than what is currently dedicated. That would buy you a lot of tall ships and more convention sales business, which would lead to more tax revenues.

Furthermore, Duluth is a tourism town with an economy driven by visitor dollars. By industry standards, promotional investment should be above, not below, average.

Given the circumstances, it’s hard for the industry to justify a cut. But apparently since Visit Duluth has been doing so much with so little for so long, some might think it can do everything with nothing.

Experts disagree. The Knight Foundation writes, “Visit Duluth can claim remarkable accomplishments of being the driving force behind the growth of tourism revenues. Theses results are even more surprising when considering the disadvantages Visit Duluth operates in regards to its budget.

“There are several areas of concern related to budget that should be addressed by the Duluth city government and the tourism industry. The amount is not guaranteed on an on-going basis, reflecting a lack of commitment to tourism. The budget from tax revenues is unquestionably inadequate for Duluth to aggressively compete and successfully grow in the competitive world of tourism.”

Don’t be fooled

Don’t let anyone fool you into thinking hotels and restaurants don’t individually also pay their own way to promote themselves. Don’t let anyone fool you into thinking tourism doesn’t benefit each and every citizen, whether they are in the hospitality business or not. Don’t let anyone fool you into thinking tourism tax is a subsidy.

Tourism keeps Duluth alive. Cutting tourism risks sending the entire local economy spiraling downward with even less revenue to fund the core city services we are all fighting to maintain and grow. In fact, the city’s No. 1 source of locally generated revenues is the 1 percent sales tax. It is a bigger revenue generator than property taxes.

The tourism industry clearly pays its own way plus a whole lot more. Cutting tourism is completely counterintuitive, while an increased investment would actually be a solid way for the city to work its way out of its financial mess, boosting revenues, boosting services and creating more jobs for everyone.

Terry Mattson is the president and CEO of Visit Duluth. Contact him at 722-4011 or [email protected]

As was pointed out in the VisitDuluth article posted previously, the City already takes more from the local opion tax than they are legally entitled too. To state that VisitDuluth should be sacrificed so Labor can keep their jobs in Duluth is ridiculous at best and shows a lack of understanding of the basic economics that drive his City.

I am not in favor of any sacrifice to tourism so Labor can keep jobs and suck Duluth dry. Like it or not, VisitDuluth'd efforts MAKE the City money, not take away from it. Labor is squarely to blame for the plight of Duluth. We have the most expensive fire department in the state of minnesota. City employee healthcare costs exceed what the City collects in property taxes, for gods sake, that is messed up.

Reform measures are long overdue in this city. Labor no longer runs duluth. If you want libraries and parks, start cutting at the Duluth Fire Dept. a $15 million budget-please give me a break.

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