Council Approves Spirit Mountain Budget Amid Financial Woes

Two Years With Tough Weather Has Resort On Edge

DULUTH, Minn. — The Duluth City Council voted unanimously Monday to approve Spirit Mountain’s new budget for the upcoming season. This, as the attraction on the hill is coming off a nearly 10 percent revenue drop and 6.5 percent increase in expenses, according to councilor Joel Sipress.  And when those numbers are balanced out, Spirit Mountain saw a profit of just over $15,000 for the 2016- 2017 season.

But, Sipress says, the attraction also saw nearly $800,000 in the red in the form of depreciation and amortization costs, which Sipress described as needed maintenance and infrastructure needs not being met.

Sipress says some of the blame can be put on warmer winters and less snow, which in turn caused a loss of operating days for the resort.

Spirit Mountain Executive Director Brandy Ream says some of those operating days were saved by the new snow making machines connected to the St. Louis River, but using all that electrical power to make the snow ended up causing the electrical bill to rise more than expected.

Meanwhile, Sipress says if this battle with the budget continues, Spirit Mountain may need to rethink how they do things.

“There is a possibility that these last few winters have struck us as odd winters with odd weather may be like the winters we’ll have in the future. If that’s the case, Spirit Mountain does have to be planning, preparing for how they have to change their business model,” Sipress said.

Councilor Noah Hobbs says poor winters will eventually have Spirit Mountain coming back for more money on top of the $1.2 million the city borrowed to the attraction back in 2014.

“I think also coming back to the city of Duluth for some operating money in the case of poor winter and infrastructure failure is a high likelihood,” Hobbs said.

“It’s kind of from one weather challenge or one business hurdle to another,” Ream said. “We clear one, get to the next one, we clear that and we keep going and that’s what we’re going to keep doing.”

Spirit Mountain management projects a profit of nearly $200,000 for the upcoming season.

That money could potentially go into repaying the city of Duluth some of that borrowed $1.2 million, while also helping with maintaining the aging infrastructure.