Where did Detroit Lakes' CARES Act funding go?

Detroit Lakes has allocated $464,568 of its $713,849 in CARES Act funding with a majority of the early funding going to the city and the Detroit Lakes Cultural and Community Center. As the city's allocation deadline of Nov. 15 approaches, around 60 businesses have applied and are slated to receive an estimated $200,000 in subsidies in the coming weeks.

The Detroit Lakes City Council holds their October meeting in the ballroom at the Historic Holmes Theater. (Michael Achterling / Tribune)

The Detroit Lakes City Council has allocated 65% of its $713,849 in federal CARES Act funding as of Oct. 13. Where did all that money go, and where may the remainder be going in the future as the city's allocation deadline of Nov. 15 approaches?

The $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act was passed in March and included emergency funding to state, and local governments. Of the $150 billion available, Minnesota received about $2.2 billion and Becker County received $1 million, which they have allocated to various cities, or used to create assistance programs. Detroit Lakes received $713,849 for the same purposes.

So far, a majority of the city's funding, 70%, has gone to the city itself and the Detroit Lakes Cultural and Community Center due to work-from-home transitioning and business losses.


The city of Detroit Lakes awarded $228,354, or 49% of the total CARES Act funds disbursed, to themselves during their first two rounds of allocation. A majority of the city's funding, more than $177,000, was spent on payroll assistance for city workers, who provided services during the pandemic, and technology/server upgrades and purchases, which totaled nearly $96,000 alone.

The Detroit Lakes Cultural and Community Center claimed 21% of the city's allocated CARES Act funding through Oct. 13. The $97,740 in payments to the center were used to reimburse income losses from March to August. More losses due to the pandemic are expected in September and October.

Nearly $50,000 in partial liquor license fees from March to October have also been recouped by the city through CARES Act funding. The city did not collect the fees due to bars and restaurants been shutdown during the stay-at-home order and operating in limited capacity since it was lifted.

The city has also used CARES funding to reimburse the city's public utilities more than $27,000 to help with delinquent accounts.

Overall, the city has allocated $464,568 of CARES funding through two rounds of disbursement, leaving $249,281 in funds remaining to be allocated by the Nov. 15 deadline. Of the remaining funds, $160,000 is being set aside for economic support through business subsidy grants.

The deadline for Detroit Lakes businesses to apply for COVID-19 relief funds was Oct. 19. According to Heidi Ostlie, a city finance officer, about 60 businesses have applied to receive up to $10,000 each in CARES Act funding, which will be debated among the city's development authority during the first week of November.

"I think the biggest thing for the city, and that the council really wanted to make sure we did is support local businesses...and know people in the community are being taken care of," she said. "Overall, we've got a fairly significant chunk of funds, right around that $300,000, that are going toward economic support in one way or another."

Ostlie said she believes due to the amount of interest in the city's business subsidy grants program, the amount will ultimately increase to more than $200,000 in grants. However, many businesses may not be able to claim the full $10,000 allowed because so many businesses applied for relief.


"Depending on the type of business, and they type of other funding they may have received, some folks might get a lesser amount, and some folks might not be eligible at all," she said. "It's going to be decided by the loan committee of the development authority later on this week."

Unallocated funds listed on the chart, Ostlie said, are estimates and represent only potential funding spots. She also said some items with allocated funding, like unemployment assistance, can be augmented retroactively by federal, and state, programs, which may lessen the burden on the city and free up more funds.

"The state has now let us know that they are doing some adjustments to allocate some federal CARES funding toward unemployment costs, so we can use that automatically without tapping into our local allocation," said Ostlie. "All of that isn't really going to get flushed out until our spending deadline."

The city must spend the CARES Act funding it has received by Nov. 15, otherwise the remaining balance returns to Becker County for redistribution. Ostlie said she doesn't expect any balance will return to Becker County and added she believes, if more funding was granted at the federal, or state, level, the city would be able to spend it.

"The expenses aren't going to stop rolling in right at Nov. 15th," Ostlie said. "I definitely see the need for more funding. It's up to our state government."

The next regular City Council meeting is Nov. 10, and with the city allocation deadline approaching, CARES Act funding will appear on next month's agenda, according to a city official.

Lead Multimedia Reporter for the Detroit Lakes Tribune and the Perham Focus.
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