Detroit Lakes City Council approves 6% tax levy increase for 2021

Some of the 2021 tax levy will go to the city fire department as part of a plan to implement a new hourly pay structure in an effort to retain firefighters and draw in new ones.

Heidi Ostlie, a Detroit Lakes finance officer, presents the proposed 2021 city budget and tax levy during the December city council meeting. (Michael Achterling / Tribune)

The Detroit Lakes City Council approved a 6% increase for the 2021 property tax levy on Tuesday, Dec. 8.

The levy is a $346,628 increase from 2020 and will total $6,092,619.

“Depending on how your property value has either increased, or decreased, that’s probably the biggest factor in determining what happens to your taxes,” said Heidi Ostlie, the city’s finance officer. “As far as the city levy portion, it shouldn’t be a big difference at all.”

Ostlie said some of the new funding from the levy will go to bolster the city’s fire department with a new hourly rate to increase retention, and draw in new potential firefighters.

“Some businesses are no longer able to pay their firefighters to leave from work,” said Ryan Swanson, fire chief for Detroit Lakes. “They let them leave, but they can’t pay them, or they are this was something that we just put together to give those members something.”


Swanson said firefighters, on average, received about $8 per call this year and, with the new hourly rate, it should help those members more financially and hopefully retain the firefighters they train for up to a year.

“We don’t join for the money,” he said, “but this is just a little something to help you out.”

Council members also passed a $7,022,095 budget for 2021, an increase of $303,113, or 4.5%, from last year.

The reasons for the budget increase, Ostlie said, are to compensate for the loss of about $95,000 in local government aid the city has received from the state. Additionally, the city will see a decrease of about 15% in municipal state-aid street funds, which assist in the maintenance of state roadways that pass through a municipality.

The city’s net tax capacity rate, which is what property tax calculations are based, will stay nearly the same from 40.17% in 2020 to 40.69% in 2021.

According to city finance committee data, Detroit Lakes’ 2021 net tax capacity rate will be lower than many comparable cities in the area, such as:

  • Moorhead - 44.79%

  • Bemidji - 50.14%

  • Fergus Falls - 57.76%

  • Brainerd - 78.78%

In 2021, an average family, with an estimated $170,000 market value home, will pay approximately $602.59 in 2021 property taxes, an increase of $7.67.
Commercial properties with an estimated value of $450,000 will see a property tax bill of $3,356.76.

Ostlie said the budget process for 2021 has taken nearly half the year and, after the next audit, she said she’ll start the process all over again.


“We started working on the budget probably right away in June,” she said. “It’s a long process. It goes from budget season, to audit season, and then back to budget now we’re just wrapping up this one and then, we’re ramping back up for audit season.”

The council also approved refunding liquor license fees for November and December to help bars and restaurants affected by the COVID-19 pandemic. Additionally, council members decided to refund the fees for January and February of 2020, even though those months were not affected by the pandemic in an effort to provide more relief.

Members also scheduled a public hearing for January to seek comments from the public concerning a new potential roundabout at the Frazee Street and McKinley Avenue intersection.

The proposal was added to an existing street and utility upgrade project because the plans involved the section of Frazee Street before the intersection. The proposed roundabout would add an estimated $300,000 to the project.

The next council meeting is the first meeting of the new year on Jan. 5, 2021, and will feature the swearing-in of two new members.

Detroit Lakes City Administrator Kelcey Klemm, members of the city council and municipal staff workers watch a presentation during the December city council meeting. (Michael Achterling / Tribune)

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