Before the city of Duluth can begin collecting a half-percent sales tax to fund street repairs, the City Council will need to pass a resolution detailing exactly where those tax dollars can be spent.

On Monday, councilors are expected to pass a comprehensive 64-page resolution that would give city staff great latitude to use those tax proceeds to fix any and all 452 miles of road and 85 bridges in the community.

But the $7 million per year the half-percent sales tax is expected to generate will fall far short of addressing the city’s total needs, as it estimates $1.4 billion would be required to reconstruct Duluth’s existing road and bridge infrastructure.

The city will need to prioritize the work over the next several years, said Noah Schuchman, Duluth’s chief administrative officer.

“I believe our staff will be sitting down to determine what the best strategy is. But it’s important to remember that we’re not going to get this money all in a pile. So, we will be very thoughtful about how we spend it, what the right way to start is, and we look forward to doing more communication around that once we nail that down,” he said.

Unlike a previous 2017 plan that provided a snapshot of the city’s immediate needs, Schuchman described the plan in the current resolution as a window into the cumulative costs of improving the city’s streets and bridges over the next 25 years.

“We did the math based on the assumption that during that time, you would potentially need to reconstruct all city streets. That is obviously a higher number that’s not likely to happen in that time, but we wanted to have a better understanding of what that cost would be. It’s not an indicator of the total dollar amount that would be collected. It is an understanding of what we think the total potential need is,” he said.

Although 2nd District Councilor Joel Sipress said he typically refrains from advocating for repairs to a certain street over others, at Thursday night’s agenda session, he made the case for Norton Road, saying it “is quite possibly the single worst street in the 2nd District.”

“It’s constantly falling apart. We’re constantly repairing it, and I hear from residents there on a regular basis. It’s a mess,” Sipress said.

Even if the council passes the street resolution Monday as expected, the city’s finance department anticipates it likely won’t see any proceeds from the new sales tax surcharge until sometime in October.

While the city will be able to exercise its discretion in how the street funds are distributed to different projects, it is obligated by the terms of recently passed state legislation to invest at least $1 million for each of the next 10 years in streets and infrastructure serving the downtown medical district. Those funds will be considered a local match for $98 million in state funds that will go to support additional public infrastructure in the area, where Essentia Health and St. Luke’s have announced plans to invest a combined $1 billion in new facilities over the next several years.

Schuchman characterized the financial arrangement with the state as a “huge win” for the city and the medical district.

“My understanding is that typically cities are expected to provide almost a one-to-one match. But in this case, we’re spending $10 million over 10 years to get nearly $100 million back. I don’t know who wouldn’t take that deal,” he said.



