Well, I just got back from a vacation with my family.
We took a trip to south Texas, where the weather was 100 degrees and humid. Our air conditioning died in Dallas, which made things interesting. On the way back, our whole van died in Guthrie, Oklahoma. We callously abandoned it, like outlaws abandoning a played-out horse, and bought a new one. Each person I met in Guthrie—the tow truck guy, the sales guy, the finance guy—informed me that Guthrie had once been the capital of Oklahoma, until some thieves stole the state seal in the middle of the night and carried it off to Oklahoma City.
Was that how state capitals were decided—in a game where whoever had the state seal last got to be the capital? I wasn’t sure, but I kept my questions to myself. And when the finance guy said enthusiastically, “We need someone like you in Guthrie!” upon finding out that I was a muckraking reporter, I didn’t tell him, “No, you don’t.” I wanted nothing more than to get out of Guthrie, Oklahoma, as fast as was humanly possible, and the best way to accomplish that was to remain pleasant and agreeable to all.
Anyway, what with all the excitement, I’ve delayed writing this week’s column for a little too long. My plan is to make use of some stray notes I have lying around the office.

DEDA’s magazine story
On May 28, 2014, Director of Business Development Chris Eng informed commissioners of the Duluth Economic Development Authority (DEDA) that a 16-page magazine story about Duluth would soon “be in front of 5.2 million captive audience readers”—on Delta Air Lines flights worldwide. DEDA had paid $10,000 for a half-page ad in the June issue of Delta Sky magazine, which was running a special section (though not a cover story) on Minnesota.
The article in which DEDA’s ad appears is entitled “Duluth: A City Ascendant.” It begins on page 124 of the 200-page magazine.
“Duluth is one of the Midwest’s most fascinating and attractive cities,” reporter Gene Rebeck begins happily, eyes wide with wonder. As he digs deeper, he discovers that Duluth is “much more than a beloved tourist destination” featuring craft beer and a swell mayor. It also has aviation, health care, engineering, education and generous business subsidies! Rebeck goes on to inform us that, because Duluth has hilly terrain, nearby water and a bridge, “Locals half-jokingly refer to the city as the ‘San Francisco of the Vikings.’”
Personally, I’ve never heard a local say that, but I doubt many of the article’s 5.2 million cramped, disheveled readers will mind if a dab of fiction is mixed in with the reporting. Colorful local details, even invented ones, make the pictures of Lake Superior seem all the prettier.
Will DEDA’s $10,000 investment in this story improve Duluth’s economy? Nobody knows. Questions like that are unanswerable. But it became clear to me, reading the article, that one very clear beneficiary of Duluth’s new optimism is Delta Air Lines.
Besides DEDA, others who bought ads in the magazine include Enbridge Energy, the College of St. Scholastica, UMD, Essentia Health, ALLETE, the Edge Waterpark and other players in the local economy. Even the city bought a quarter-page ad (“Make us your next destination!”). In all, eight and a half of the story’s 16 pages are ads. If DEDA’s rate of $10,000 for a half-page ad is representative, Delta Air Lines was paid $170,000 to produce one small story about Duluth.

Mayor: Half-and-half taxes will NOT be used to bail out Spirit Mountain
A few weeks ago in this column, I raised the thought that the two new half-percent tourism taxes proposed to fund projects in West Duluth might at some point be used to bail out Spirit Mountain instead. In the last two years, Spirit Mountain’s line of credit from the city has more than tripled, from $350,000 in 2012 to $1.2 million today. If the city ever decided to relieve Spirit Mountain of this debt, there aren’t many places the money could come from.
At a June 12 meeting held at Spirit Mountain’s Grand Avenue chalet to discuss the future of the St. Louis River corridor, I posed the question to Mayor Don Ness: Might the new half-and-half taxes be used to bail out Spirit Mountain? His answer, emphatically, was no.
“No, we’re not going to use it for operational shortfalls,” he said. “No, we’re not going to use it for any operations.” The money raised by the half-and-half taxes, he explained, could only be used for capital projects. Thus, the city would use $2.1 million to build a water line from the St. Louis River to Spirit Mountain, hoping that the improvement would lead to water savings for the ski hill, but the city was forbidden, by law, from using any of the money for operations.
When it comes to financial policy, of course, any pronouncements about what public money can or cannot be used for “by law” should be treated with skepticism.  When political expediency demands it, the law can change rapidly. The recent history of Duluth is full of instances where money lawfully earmarked for one purpose lawfully went elsewhere.
Spirit Mountain kicked off its master plan with just such a maneuver in 2009. At that time, searching for ways to finance its new alpine coaster, Spirit Mountain asked the city to allow it to use $225,000 that was earmarked for repair and replacement projects. The city council voted to change the law and the money flowed off to its new destiny. It’s that easy!
For now, the mayor has said very clearly that the new half-and-half taxes will not be used to bail out Spirit Mountain.

More traffic accidents = more money?
The city’s largest single source of revenue for the general fund—generating more income than sales taxes, property taxes or fees—is local government aid (LGA) from the state. In 2014, Duluth will receive about $29 million in LGA. At a budget discussion held on June 2, 2014, Chief Finance Officer Peg Spehar explained to city councilors that the state allocated LGA to various cities using a “complex formula” involving many factors. As an example, Spehar mentioned that one factor the state looked at was the number of car accidents that occurred in a city each year.
 Councilors erupted with laughter. It did seem bizarre.
“Really? Oh, jeez,” said Councilor Barb Russ. “Does that up our amount or drop it?”
 “They decided that that was a measure of service demand,” Spehar replied.
This led to a great deal of laughing and overlapping conversation as the ramifications of such a policy dawned on city councilors.
“So it’s not a liability for us to have more bumps [on our streets],” said Councilor Sharla Gardner.
“We’ll have to relax traffic enforcement,” added Councilor Joel Sipress.
After a while, order was restored and the city government soberly continued with its work.

Remember retiree health care?
Some years ago, during Herb Bergson’s tenure as mayor, the city woke up and discovered that it was facing a $300 million shortfall in health care costs for city retirees. Health care had been contractually guaranteed to retirees for years, but somehow nobody had ever thought to fund it.
Don Ness, at that time a city councilor, appealed to leaders within the business community to help the city solve its problem. A high-powered task force, led by former Minnesota Power CEO Arend Sandbulte, took on the challenge. After studying the problem, they came out with a list of recommendations. Funding of the retiree health care liability began, first with Mayor Bergson and then with Mayor Ness.
Significant progress has been made in many areas. Today, the retiree health care liability is $100 million lower than it was a decade ago.
But it’s still more than $200 million, and now it seems that money is too scarce to fund it. During the budget discussion, Chief Administrative Officer Dave Montgomery told councilors that the city would need to set aside $15 million a year to fully fund the retiree health care obligation. In 2014 the city contributions will be less than $4 million dollars.  It seems like people have forgotten about this issue, as if all the news about progress being made lulled everybody into thinking the problem was solved. But retiree health care is still with us, and we still have to deal with it, and better now than later. The longer it goes unfunded, the greater those annual payments will be.
Where would you suggest we find an extra $15 million a year?

A what discussion?
Few city officials communicate as professionally, with such aplomb, as CAO Montgomery. While the mayor cuts ribbons and stage-dives at concerts, Mr. Montgomery tackles the difficult job of shepherding the mayor’s policies through the legislative process. Always calm and concise, he has a special knack for explaining complicated financial scenarios in ways that are understandable to all, without ever backing off from the administration’s position. It can be quite inspiring to watch.
Alas, not everyone is perfect. From time to time, Mr. Montgomery suggests that people engage in “fulsome discussion” of an issue. My dictionary has two definitions for fulsome:
 
•  Offensive from excess,
    especially of acts or words

•  Gross, repulsive.

If I were the sort of person who took cheap shots at easy targets, I might say these descriptions fit city government quite well. If I were a mature individual, I would say merely that I find it doubtful they are what Mr. Montgomery intended.

The truth about Guthrie
When we got home from our trip, I googled Guthrie, Oklahoma, to find out more about the stolen state capital.
It turns out that Guthrie was the state capital of Oklahoma from 1907, when Oklahoma won statehood, until 1910, when a statewide referendum moved the capital to the much larger and more economically powerful Oklahoma City. When the governor of the state heard the results of the election, he directed the secretary of state to pick up the state seal in Guthrie and bring it to Oklahoma City. The secretary of state did so, late at night, using a rented Cadillac. It may have been peremptory and dismissive, but it wasn’t illegal.
None of the three present-day Guthrie residents who told me the story of the stolen state capital mentioned anything about a referendum. Somebody should tell them.

John Ramos has observed Duluth politics since 1998.