Detroit Lakes officials hope new lawmakers are as helpful as Marquart and Eken
Detroit Lakes has long been blessed with a healthy, growing tax base — which is killing the city’s funding under the existing Local Government Aid formula.
DETROIT LAKES — In the spirit of Christmas, the Detroit Lakes City Council presented its legislative wish list to new lawmakers Republican Rep. Jim Joy of Hawley and DFL Sen. Rob Kupec of Moorhead on Tuesday, Dec. 20.
Joy and Kupec, who did a lot more listening than talking, will be sworn in at St. Paul on Jan. 3 to replace longtime area DFL legislators Rep. Paul Marquart and Sen. Kent Eken.
“We really had a great rapport with them, so we hope to have that same rapport with you,” Detroit Lakes Mayor Matt Brenk told the new lawmakers.
First on the city’s list is a boost in Local Government Aid from the state — and not just injecting more money into the formula, but also changing the LGA formula to take into account the median household income of Detroit Lakes residents.
To take the most dramatic local example, Detroit Lakes and Thief River Falls have about the same population and median income, but Detroit Lakes received about $540,000 in LGA last year, while Thief River Falls got over $3.2 million in LGA.
That same year, the Detroit Lakes property tax levy was about $6.1 million, while the Thief River Falls tax levy was about $2.8 million.
And stretching back to the mists of time — 2001, to be precise, Detroit Lakes received over $1.6 million in Local Government Aid. Next year, it is slated to get just $350,000.
Detroit Lakes has long been blessed with a healthy, growing tax base, which is killing the city’s funding under the existing LGA formula.
“As mayor of Hawley you certainly understand the LGA program and the benefit it has to cities around the state,” Detroit Lakes City Administrator Kelcey Klemm said to Joy.
“Last year’s tax bill had $30 million per year extra for LGA,” he added. “It didn’t quite get across the finish line, but it had a ‘held harmless’ provision that would have stopped some pretty substantial cuts in LGA to Detroit Lakes,” Klemm said. “When you’re losing $147,000 in LGA, it’s hard to talk about adding police officers or adding services,” he added.
On economic development issues, the big three are shortages in “child care, housing and workforce,” Klemm said. “None of them has an easy answer.”
But he urged state lawmakers to do everything in their power to support the West Central Initiative, which “has been a great help to us,” Klemm said.
Hundreds of child care spots are needed in Becker County, and Alderman Ron Zeman said he would like to see funding to take care of all those kids and steer them in the right direction. “It’s better to help them when they’re younger, rather than wait until they’re 18 and we pay for them until they die,” he said.
When it comes to housing, “some kind of property tax break is one thing we can do for property owners,” Klemm said in answer to a question from Kupec. “Detroit Lakes has really benefited from a lot of market-rate housing the last decade, a lot of apartments,” Klemm said. “That has cooled off, so the city is looking for help with affordable housing and even market-rate housing.”
Zeman urged the state lawmakers to support down payment assistance, so more renters can become homeowners.
Paying for infrastructure is becoming more of a problem for Detroit Lakes, and Klemm said state lawmakers can help by funding the Greater Minnesota Business Development Infrastructure Grant Program. It would have had $20 million to disperse had the state bonding bill passed last year.
The program provides grants for half the project cost (up to $2 million) to cities like Detroit Lakes that need to build a new industrial park or a similar infrastructure project.
“Costs have gone up so much it’s just going to be very challenging to complete all our infrastructure,” Klemm told the lawmakers.
Along those lines, Detroit Lakes and Becker County benefited from two big grants the past few years from the Local Road Improvement Program, which helped with the South Washington Avenue project and the Highland drive Project, Klemm said.
That program is also commonly funded through state bonding bills, he added, and “it would be nice to get that in a bonding bill so cities like Detroit Lakes can apply for it.”
Similarly, the state Public Facilities Authority (PFA), which kicked in $17.5 million a few years ago for the wastewater treatment plant in Detroit Lakes, needs to be recharged with cash.
Detroit Lakes is hoping to tap into those funds to help pay for a new water tower and other infrastructure, “but that’s all going to come to a screeching halt if the state doesn’t get more PFA money in there,” Klemm said.
Also high on the city’s wish list is $1.4 million in the next state bonding bill to pay for half of the Washington Ballpark project. That project also would have been funded if the 2021 bonding bill had passed.
On the Heartland Trail project, the city asked lawmakers to amend a state appropriation from 2020 to allow that money to be used for trail construction — and not just planning costs — on the Detroit Lakes-Frazee stretch of trail.
The city also hopes that a $2.4 million Heartland Trail request in the failed 2021 bonding bill is revived in the next bonding bill, especially since it includes $500,000 to finish the Frazee-to-Detroit Lakes trail segment.
Detroit Lakes also badly needs up to $300,000 to fix the roof of its public library. “We have a really wonderful clay tile roof,” Klemm said, “but the whole underlayment needs to be changed, so the tile needs to come off — that could be a $200,000 to $300,000 job.”
The city would also like the rules changed on the local option sales tax, to give cities more general authority to take a new proposal to voters.
In 2018, Detroit Lakes voters approved a half-cent city sales tax to pay for a beautiful $6.7 million police station (which won an award for its design). It was expected to take nine years to pay it off, but the tax is now generating about $2 million a year, so the police station is expected to be paid off in May.
The city would like to keep that tax on the books and direct it toward some other voter-approved project, but under current law, each project using local sales tax must be blessed by state lawmakers as well as local voters — and that legislative approval can be time-consuming and logistically challenging, since it needs to happen when lawmakers are in session.
“We don’t want it (the local sales tax) to lapse for too long,” Klemm said. The Pavilion-replacement project and ice arena expansion project are two possible uses for a redirected local sales tax, but no decision has been made by the city council on which project, if any, to bring to voters this year.