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DL City Council approves tax levy increase of 9.86% for 2023; seeks $18.3 million in bond issuances

The Detroit Lakes City Council approved the preliminary budget and a 9.86% tax levy increase for 2023 during its Sept. 13 meeting. Council members also approved an $18.3 million bond issuance to finance payments for the city's new public works building, West Lake Drive projects and other street and utility projects currently underway.

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Detroit Lakes City Council file photo
Michael Achterling / Tribune
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DETROIT LAKES — A preliminary 9.86% tax levy increase and budget were approved by the Detroit Lakes City Council for fiscal year 2023 during its most recent meeting on Sept. 13.

During a meeting of the city's finance committee on Sept. 13, Heidi Tumberg, finance officer for Detroit Lakes, said the increased tax revenue will add $650,433 to the city's annual budget and be used to offset increases in various costs and a loss of $144,000 in local government aid funding from the state.

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She said some of the main drivers of the increased costs were:

  • An anticipated increase in city union contracts for 2023, which are currently under negotiation.
  • An increased cost of health and workers compensation insurance.
  • Increased cost of natural gas.
  • Higher maintenance and equipment costs.
  • Adding a full-time fire chief position for Detroit Lakes.

"Especially with the police department going from $60,000 to $120,000 (in workers compensation insurance) costs doubling from one year to the next is a pretty huge impact, especially when that's all coming from the general fund and needing to get paid for by property tax levy," said Tumberg. "And the increased cost of natural gas, looking at those futures, those costs are not looking to go down any time soon."
She also said $65,000 of the budget increase will be used to eventually pay anticipated debt service for the city's new public works facility.

"No lake weed removal was included, and no sidewalk snow removal was included," said Tumberg. "Those were two big discussion points, but those didn't end up in the final (budget)."

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A public hearing on the 2023 preliminary tax levy and city budget will be held on Dec. 13 at 6:01 p.m.

City Council approves $18.3 million bond issuance

Members of the Detroit Lakes City Council also approved the issuance of $18.3 million in bonds to finance multiple city projects.

During the meeting, Doug Green, a municipal adviser for Baker Tilly, a Chicago-based account services and consultation company, explained the process for selling bonds for the city.

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Doug Green, of Baker Tilly, a financial consulting firm, explains the process for city's upcoming bond sale during a meeting a of the Detroit Lakes City Council on Sept. 13, 2022.
Michael Achterling / Detroit Lakes Tribune

"State statutes give municipalities the authority to incur debt and issue bonds for various reasons," said Green.

The council's approval for issuance doesn't obligate the city to sell the bonds, he added, but, they may, if they approval the final sale once all of the financing details are worked out.

The $18.3 million in financing will be spread over two separate bonds. One will be used to finance up to $11 million of the city's new public works building. The second bond, for an estimated $7.3 million, will be used to finance three nearly completed residential development projects; both phases of the West Lake Drive utility and street improvement project; and the city's water meter replacement project.

Related Topics: DETROIT LAKESBECKER COUNTYTAXESDETROIT LAKES CITY COUNCILGOVERNMENT AND POLITICS
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