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Could policing, other city costs sink the Festival of Sail?

Event promoter said he's unable to cover $170,000 estimate for city, law enforcement services.

The US Brig Niagara passes through the ship canal in full sail before a crowd of thousands
The US Brig Niagara passes through the Duluth ship canal at the start of the Tall Ships Festival on Aug. 18, 2016.
Bob King / File / Duluth News Tribune
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TWO HARBORS — The City Council must find outside funding or pony up its own money to cover its expenses during the Festival of Sail planned for August.

A revised estimate for costs shows the city will be spending more than $170,000 for the event to happen, with bringing in outside law enforcement costing more than $89,000 and the Two Harbors Police Department itself needing almost $44,000, according to a memorandum by city Finance Director Miranda Pietila. The remaining costs include communications and emergency management; miscellaneous equipment, supplies, food and beverages for emergency personnel; public works personnel; road closures; and signs.

The event, scheduled for Two Harbors’ Agate Bay from Aug. 4-7, is expected to attract thousands to the small North Shore city.

Festival of Sail promoter Craig Samborski has committed $12,000 to reduce the city’s burden, but in February agreed to reimburse the City of Two Harbors for all key expenses, including law enforcement and public works.

He said Monday evening that the estimated costs for policing this event were three times the cost of some of his other Festival of Sail events he puts on around the country.

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“I’ve never seen a festival with this kind of spending before for law enforcement and we’re not in a position to pay that kind of money for it,” Samborski said during an agenda session Monday where the council and city staff discussed options for funding the event. Samborski added that he would even contribute up to $15,000, $3,000 more than listed in the city’s memorandum.

Two Harbors Police Chief Rick Hogenson defended the plan and its cost. He said he formed it with advice from the Duluth Police Department, which has staffed the event several times when it’s been held in Duluth: “Don’t skimp on your personnel. You are going to be busy.”

“Most of the dollars go to staffing,” Hogenson said. “That is the staffing plan that I recommend as chief of police.”

Samborski met with city staff last week where one option to raise funds included selling 1,200 parking permits to festival attendees for residential areas around town. That plan could raise an estimated $70,000.

Read more about the Festival of Sail
First Day Events was formed in September, just before the mayor and councilors authorized a letter voicing their support for a potential festival relation.
The new arrangement also takes mayor-connected First Day Events out of the picture.
The city tries to navigate planning, financial and safety concerns.

Additionally, Pietila, in her memorandum, proposed several options for the city, which included taking from the liquor store and/or campground reserves or taking evenly — either as a certain percentage or more than $19,000 each — from those reserves as well as the general, water, sewer, electric, gas, stormwater and liquor reserves.

She also said the city could seek additional funding from outside tourism organizations like Lovin’ Lake County and Explore Minnesota.

Several councilors said they favored that alternative as they didn’t want taxpayer money going toward the event.

“We do not want this to be a burden to our taxpayers to have this event. … We all want to see some level of success but I’m struggling right now to have this be coming at the end of June knowing that this event is 52 days away,” Councilor Cathy Erickson said during Monday’s agenda session.

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The council is expected to consider whether to fully fund, partially fund or not fund the remaining costs during the next meeting on June 27.

Until then, Interim City Administrator Joel Dhein will seek outside funding to cover the city’s expenses for the event.

Not funding the city’s costs would mean canceling the event, the memorandum said. And while partially funding is technically an option, Hogenson warned it was not possible to partially fund law enforcement staffing.

But Samborski said it’s too late to cancel.

“The ship has sailed,” Samborski said. “Our company has moved forward based on this council’s support of the event and laid out hundreds of thousands of dollars in deposits now. I mean, we don’t have a choice.”

Jimmy Lovrien covers energy, mining and the 8th Congressional District for the Duluth News Tribune. He can be reached at jlovrien@duluthnews.com or 218-723-5332.
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