Starting Tuesday, Oct. 1, residents and visitors who purchase goods and services within the city of Detroit Lakes may notice that the sales tax they're paying is about a half-percent higher than it used to be.

That's because of a new local-option sales tax that was approved by city residents in a special election last November, and given a final stamp of approval by the Minnesota Legislature this spring. Oct. 1 is the official start date for the new tax.

According to City Finance Officer Pam Slifka, the sales tax will be implemented with a specific goal in mind: To fund construction of a new, $6.7 million Detroit Lakes Police Department facility.

What will be taxed, and for how long?

According to Slifka, the new .5% local tax "will apply to everything that the Minnesota state sales tax covers" — in other words, if you pay state sales tax on something you buy within Detroit Lakes city limits, you will be paying the new local sales tax as well.

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The new tax is not permanent, however: According to the language of the special election ballot question, and the bill approved by the State Legislature that finalized the tax, it will continue “for a period of approximately 10 years, or until approximately $6,700,000, plus an amount equal to interest and the costs of issuing any bonds, is raised.”

"If we choose to build a more expensive police department, the tax can only cover $6.7 million of it," Slifka noted.

The local tax is projected to raise about $1 million a year, which means they are hoping to raise the $6.7 million total in eight years or less, she added.

Why a new police department?

The Detroit Lakes Police Department’s existing facility at 106 E. Holmes St. predates 1957, and was originally built to serve as City Hall. When the city’s administrative offices were moved in 1978 to their current location on Roosevelt Avenue, the police department took over the space.

At that time, the city’s population was 6,900 people, and the police department employed 10 sworn officers. Today, the year-round population has grown to more than 9,400, and the number of officers has grown to 17, with administrative support for the department bringing the total staff roster to 19 — nearly twice what it was 50 years ago.

The city’s population is projected to grow to over 9,700 people by 2022.

"As our city grows, so does our police force," Slifka said.

Even with the addition of a squad car garage in 1990, and an office space remodel in 1999, the total available space in the department is right around 6,000 square feet — well short of the nearly 18,000 square feet of operational space that a 2016 needs assessment study determined the department would need going into the future.

“In February 2016, the city hired BKV Group to help determine what the (existing) deficiencies were, and put together a projected space requirement based on reasonable population growth,” said City Administrator Kelcey Klemm, noting that the Minneapolis-based architectural and engineering firm specializes in police department studies and construction projects, having more than 80 of them on their resumé.

BKV Group consultants started by examining the existing conditions and operational issues of the police department. In addition to the above-mentioned staffing constraints, the study showed that the current facility is lacking adequate security, evidence processing and technology capabilities for the operation of a modern police facility.

Some of the issues outlined in the study were:

  • The layout and design of the current police station inadequately provides for a secure work environment that is restricted from public areas.

  • The current facility is lacking safety and security systems recommended for police operations, such as card-only access to certain areas of the building, and video surveillance both inside and outside the building.

  • The current police station is drastically undersized based on the department’s operational requirements — by as much as 12,000 square feet, based on other, similar-sized departments and national trends identified through the International Association of Chiefs of Police planning guide. This space deficiency includes a lack of adequate indoor squad vehicle parking, evidence storage and processing, and appropriate staff workspace as well as separate areas for interviews and ongoing investigations where privacy is needed.

In addition, while the roof of the facility was replaced in 2017, some cracks in the exterior masonry have also been discovered, indicating potential moisture and mold infiltration.

Why a sales tax?

Last September, right before the special election on the sales tax vote took place, Klemm, Detroit Lakes Mayor Matt Brenk and Vice Mayor Ron Zeman sat down with a Tribune reporter to discuss why they chose to fund a new police department via sales tax.

“There are limited ways to fund this project,” Brenk said. “Basically, it’s (through a) sales tax, or property tax. We think it’s more fair to use a sales tax, because one of the reasons we have the size of police department we do, and the number of calls that come in (for service), is because of the number of people that come here to visit from surrounding areas, or live just outside our city limits, and use our services.”

With a sales tax, he explained, visitors and residents alike would be helping to fund the cost of a new police facility, rather than the entire burden of the cost falling on property owners within the city’s limits.

Additionally, Klemm noted, a property tax-funded project would typically be paid off over a 20-year period, to ease the burden on taxpayers, while the proposed sales tax-funded project is anticipated to be paid off in 10 years or less.

“We can save about $2 million in interest that way,” Brenk said, noting that this was a “key element” in the council’s decision to call for the special election.

“The longer we wait, the greater the cost becomes,” Zeman added, noting that the cost of construction rises about 5 percent annually.

Designing a new police department

BKV Group is in the final stages of completing the preliminary design for the new police department facility, said Klemm at this month's meeting of the Detroit Lakes City Council, and the council has set a work session for 4 p.m. Oct. 14 to review the plans.

"Our Police Department Building Committee has had several meetings with our selected architectural firm, BKV, providing direction and feedback to the architects regarding the building layout and design," Detroit Lakes Police Chief Steven Todd said.. "The building committee has toured several police departments and sheriff’s offices during this project.

"This month we toured Fargo and West Fargo police departments and the Clay County Law Enforcement Center; earlier in the process we toured the Fergus Falls and Alexandria police departments."

Todd noted that besides himself, the Police Department Building Committee included Klemm, Zeman and City Council members Matt Boeke and Dan Josephson as well as City Building Inspector Nate Weber and Community Development Director Larry Remmen.

"I greatly appreciate the involvement and leadership of each of the PD Building Committee Members," Todd said. "They have invested a huge amount of time and energy towards this project and their efforts will make the new police department something the community will be proud of ... It’s exciting to see the progress of the project and start seeing the vision taking shape."

Once the designs are finalized, construction will begin on the new facility, which will be on a city-owned lot directly across the street from the Detroit Lakes Community & Cultural Center.

Because the current location does not have adequate surrounding space to expand to meet the police department’s space needs, 16 other potential sites were identified and reviewed by an ad hoc committee before the new site was selected.

Some of the primary considerations were:

  • Strong police visibility and identity within the central business district/downtown area;

  • Central location, with good access to Highway 10;

  • Proximity to the courthouse, sheriff’s department and city attorney’s offices, for convenient access;

  • Good access and proximity to the core locations of the department’s calls for service;

  • Adequate parking;

  • Supports the city’s Business Corridor Redevelopment Plan.

“This site checks all the boxes,” Klemm said. “It fits all the prerequisites we were looking at … and the city owns the property.”

Sales Tax Rate Calculator

The Minnesota Department of Revenue's Sales Tax Rate Calculator can tell consumers how much they will pay for sales tax throughout the state.

Punch in an address, a time period and a dollar amount and the calculator will show you how much tax you will pay.

Currently, in Detroit Lakes, consumers pay the 6.875% state sales tax, as well as a .5% Becker County Transit tax. Starting Tuesday, Oct. 1, add the Detroit Lakes .5% local-option sales tax.

For more, visit https://www.revenue.state.mn.us/sales-tax-rate-calculator.