The Detroit Lakes City Council approved a preliminary city property tax levy of $6,092,619 and 2021 city budget of $14,457,748 at its regular meeting Tuesday night.
The preliminary 2021 levy marks an increase of $346,648, or 6.03%, over the previous year — but the vote wasn't unanimous.
Alderman Matt Boeke voted against the motion, having earlier tried to get an amendment passed that would have put the total levy hike at 7.34% — specifically to allow for the addition of another public works employee.
Boeke made the argument that the city has added considerably to its public parks and trails over the past few years, and the department's current staff is stretched a bit thin. Several council members voted in favor of the amendment, including not just Boeke, but Dan Josephson, Bruce Imholte, Natalie Bly and Dan Wenner.
However, with Aldermen Ron Zeman, Madalyn Sukke and Jamie Marks-Erickson all voting against it, the amendment did not get the super-majority required on a vote pertaining to the city levy and budget, so it failed to pass.
Boeke then voted against the original motion which called for the 6% hike, but his was the lone dissenting vote, so it did pass.
Though the city's budget and levy won't be finalized until December, the amount to be certified cannot exceed the preliminary amount approved in September, according to state law.
City Finance Officer Heidi Ostlie noted that while even the 6% increase might seem like a lot given the current economic climate, there are a couple of factors offsetting that figure that will make the actual tax hike a lot smaller.
"The good news is that we have seen an increase in property valuations, and we are decertifying several tax increment financing (TIF) districts this year, which means those properties will be back on our tax rolls," Ostlie said.
What these two mitigating factors mean for the average taxpayer is this, she added: On a $170,000 homestead, city property owners whose valuation has remained the same as last year will see a tax increase of just $7. On a $500,000 commercial property, the tax increase will be $42.
In other business, the council also voted unanimously to decertify the TIF districts for these commercial properties: Grover-Lindberg, Lodge on the Lake, Pleasant Acres III, (Essentia Health) St. Mary's, Pelican River Heights, and MMCDC/Long Bridge Heights.
In another unanimous action, the council voted in favor of using $337,321 in federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding on various expenses, including: economic support of businesses in the form of liquor license refunds, mobile platforms, tables, tents and chairs for temporary outdoor seating at various businesses, reimbursement of city rental agreements for youth soccer and softball; additional restroom rentals and trash service for city parks to aid in social distancing; and various COVID-related city employee expenses including payroll and emergency leave, sanitation supplies and equipment, and technology upgrades and purchases.
The city still has about $376,500 in CARES funding remaining, which it must spend by Nov. 15, according to City Administrator Kelcey Klemm.