Detroit Lakes, Minn. (KDLM) – The Detroit Lakes Community and Cultural Center received approval for their 2024 budget and rates from the Detroit Lakes city council on Tuesday, but not until after some members told the DLCCC’s chief executive officer they needed to start covering more of their costs from their own revenue streams.
As part of the city’s budget, the city is planning to forgive $560,000 remaining on the DLCCC’s $1.1 million loan from Detroit Lakes’ public utility funds. The freed up funds are to be used to pay for a portion of the center’s roof replacement, which will be completed in sections in coming years.
Ron Zeman, alderman first ward, said the loan forgiveness isn’t fair to Detroit Lakes taxpayers.
“One of the proposals that’s helped the DLCCC is to forgive that ($560,000),” said Zeman. “And I don’t think that’s fair to the txpayers of Detroit Lakes to have that loan forgiven. Because there’s a lot of people who’d like to see that used to get there electric rates to go down.”
He also said he wants the city council to sit down with the DLCCC Board of Directors to figure out a way to make the community center self-sufficient without relying on additional city dollars every year.
“After 20 years of operation at the DLCCC, it is time to fix the financial problems that we’ve had” he said. “For 19 years I’ve sat here at this council table and had the DLCCC come, and never once have they said, ‘we don’t need help.’ Every year the DLCCC expects help from the electric utilities and it’s become a habit now … I just feel we can’t really continue and I can’t really support reducing this $560,000 unless we have a condition that the city council sits down with you board of directors to try and figure out a way to make that place operate without having to come to the public utilities or the liquor store every year to balance.”
Peter Jacobson, CEO of the DLCCC, said the center experienced an 8% increase in memberships over the past year, but they are still between 1-5% lower from their pre-COVID membership numbers.
One of the highlights, he added, was an increase in the DLCCC’s Engage program for seniors, which hold between 300 to 400 active members that participate in biking, hiking, or other outings together.
“Over the last four years, they’ve really transformed from doing primarily, sedentary things to really a whole new group of people that are hiking, and biking, and taking part in cultural activities, and social activities and really changing the quality of life” said Jacobson. “I get calls frequently from other communities that are interested in what we’re doing in Detroit Lakes because we have a fabulous engage program and fabulous staff that help run that.”
He also said he doesn’t want the DLCCC to be compared to Detroit Country Club or Detroit Mountain, which are other city-owned properties managed by third-parties, because they are wholly different operations with different revenue streams and challenges.
“I prefer that we didn’t get compared to (Detroit Mountain) or the gold course, but rather to other community centers across the state,” he said. “My research shows that in most cases where it’s an enterprise fund of the city, the city ends up funding all of the capital and a fairly substantial amount of operations. So that’s part of the reason I think we have a nice model here because it allows some freedom to explore opportunities and innovate and provide the best services that we can. But I don’t want you to take my word for it, I would encourage you to go out, do the research, find out what you see from other community centers and then hold us to the highest standards of those other locations.”
The 2024 DLCCC budget projects $2.6 million in revenue with $2.2 million in expenses before depreciation and other non-operating expenses are taking into account. The center anticipates a negative net income of more than $43,000.
Earned revenue for the DLCCC accounts for 82% of their total revenue with 18% coming from contributed revenue sources.
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