Detroit Lakes begins budget meetings for 2024

Detroit Lakes, Minn. (KDLM) – Members of the Detroit Lakes City Council met with city staff on Tuesday morning to begin discussing the 2024 city budget and corresponding tax levy.

The first day of meetings was designed to give council members an overview of last year’s budget and tax levy so they will have a base knowledge as the process moves forward through August.

Kelcey Klemm, city administrator for Detroit Lakes, said, over the next few meetings, council members would begin hearing from some nonprofit management entities that manage various city-owned properties as they discuss their budget needs over the next year.

“All of these entities, it’s a really interesting thing because the city owns the facilities, just like at Detroit Mountain, just like at the country club … but really the intent is that the nonprofit running it can generate enough revenue to, not only, pay operating costs, but also pay for maintenance of the capital assets,” said Klemm. “The reality is that community centers just don’t have that kind of margin.”

Detroit Lakes will receive more than $500,000 in local government aid in 2024 to add to their revenue column, which is about a $150,000 increase in the state-level funds, however, that amount is lower than what the city received in 2021 and 2022 during the COVID-19 pandemic. The city’s increased LGA in 2024 is due to changes made by the Minnesota Legislature to the funding level and distribution formula during this year’s session.

Klemm also compared the tax capacity level and services provided between Detroit Lakes and the surrounding townships to illustrate the point that the city provides more than two dozen services and programs that the surrounding townships do not.

“The city’s tax rate, for a city our size, is really good at 40.34%, Detroit Township’s tax rate is 7.33%,” he said.

He added that Detroit Lakes residents also pay for the city’s police department, which is one of the largest annual budget items the city carries on its balance sheet.

“(Detroit Lakes) has to pay for its own planning and zoning,” said Klemm. “Even though the townships have adopted their own zoning ordinance, by reference, they don’t not pay for their own planning and zoning, the county taxes pay for planning and zoning. Law enforcement is the biggest one … we have a $2.6 million budget to have full-time law enforcement that the townships aren’t paying for.”

Detroit Lakes budget meetings will resume on Thursday, Aug. 3 at 7 a.m. at the Detroit Lakes Police Department community room. Meetings will be held every Thursday morning through August and possibly into September, if the city council needs more time to hear from their budget stakeholders.