Members of the Ely Area Lodging Tax Joint Powers Board delayed a decision to continue funding Ely’s tourism bureau at current levels.
At a meeting Monday, members approved requests to direct some of the proceeds from the area’s lodging tax to the city of Ely for maintenance of the trailhead facility, and to the Ely Chamber of Commerce for staffing that facility.
But a tourism bureau request to continue to receive 95 percent of the lodging tax, or about $315,000 for 2026, was not acted on.
The earlier decisions may also have had an impact on the latter, given that use of reserve funds would be required to approve all of the requests.
“I don’t know if we’ve got 315 plus what we’ve approved already,” said Terry Soderberg, a Morse Township supervisor and chairman of the lodging tax board.
The request failed to gain traction Monday, despite city council action the week before recommending that the tourism bureau’s request be approved.
Abby Dare, the tourism bureau’s executive director, recommended using reserve funds to meet requests made by the city of Ely and Ely Chamber of Commerce, to hone in on efforts to get better compliance with the tax, and to begin strategic planning to consider spending structures for 2027 and beyond.
Dare noted the funds support local contractors who work on a part-time basis to promote the region via an array of platforms.
But lodging tax board members noted the approval of funds for both the city and Chamber, and funds that may be needed for administration as well as efforts to track and improve on lodging tax compliance.
“How much are we going to have left?” said Soderberg.
County commissioner Paul McDonald, who is also on the lodging tax board, asked the tourism bureau to develop a budget for members to consider in advance of their next session, slated for Nov. 10.
“Funding the administrative costs of this board will impact the total budget,” said Paul Kess, the city of Ely’s representative on the board.
In recent years, the tourism bureau has been receiving 95 percent of the lodging tax proceeds to market the Ely area, but lodging tax board members have been receptive to recent request to divert some of those funds for other tourism-related purposes, particularly support of the trailhead facility.
Dare said she understood the request for a more balanced approach to lodging tax revenue distribution, but cautioned it would have an impact on tourism bureau efforts.
She asked the group to take 2026 to study the issues further and come up with a comprehensive, focused effort.
Some frustration with the process was also evident.
“After so many years of being the recipient, we’ve been doing all this work for a long time and are open to feedback, but it doesn’t feel good in terms of a business relationship,” said Dare.
Dare added, “You can still stay yes to everybody with those contingencies and still make a strategic plan.”
Eva Sebesta, executive director of the Ely Chamber of Commerce, endorsed the tourism bureau request.
“We’ve had some positive and productive meetings,” said Sebesta. “Our organizations are working well to complement each other.”
Earlier, the tourism bureau had asked for a 10-year commitment from the lodging tax board in addition to the 95 percent allocation, but Soderberg said “we were not interested with a 10-year contract and had some concerns about the 95 percent.”
Based on the most recent numbers, 95 percent of revenues from the area’s lodging tax come out to roughly $315,000 but Dare conceded “that’s a moving target.”
Data released this month showed that lodging tax collections from July of this year were down roughly 20 percent compared to the same month in 2024, but that data may be skewed given the timing of lodging tax payment by various establishments.
The lodging tax board and tourism bureau have discussed efforts to capture more tax revenue, particularly from short-term rental units that may not be paying the tax.
Initial efforts have begun with a private firm to get a better handle on the number of rental units in the region, and lodging tax board members agreed this week to utilize the Minnesota Department of Revenue for tax collection. The state would take over, starting next April, from Cook County, which had administered the tax for years on the Ely area’s behalf.
Lodging tax board members were supportive this week of utilizing lodging tax funds to support the new trailhead building.
They approved a $20,000 allocation to the city of Ely, to help cover utilities and maintenance at the new building on Ely’s west entrance.
Also approved was $36,000 for the Ely Chamber of Commerce for staffing.
The Chamber had originally requested $53,000, but that number was reduced after Sebesta indicated she has had discussions with U.S. Forest Service representatives. The USFS may use summer help to provide additional trailhead building staffing in 2026.
Board approves trailhead-related requests, waits on tourism bureau
