Detroit Lakes City Council holds strong to 11.22% property tax increase in 7-2 vote

DETROIT LAKES — The Detroit Lakes City Council held steadfast to the preliminary property tax increase set in September, and approved an 11.22% increase for 2024 in a 7-2 vote. The increase is projected to bring an additional $812,713 to city coffers.

During the monthly council meeting on Tuesday, Dec. 12, Aldermen Aaron Dallmann and Jaimie Deraney opposed the motion. The two council members also opposed the increase when the preliminary tax levy was set in September .

Heidi Tumberg, the finance officer for the city of Detroit Lakes, explained a residential property with a $300,000 market value can expect a city tax of about $1,130 in 2024. As for commercial properties, she said a building with a market value of $500,000 can expect their taxes to be about $3,600.

Tumberg explained property taxes are determined through class rates and tax capacity, which are established through the state Legislature. While Detroit Lakes has seen an increased tax capacity, for property owners to see the benefits of a growing tax base, values would need to remain stagnant. Tumberg noted that will not likely be the case for most property owners in the city, and projected “property values, overall, are going up more than 14.5%.”

Property assessments take place in January, with valuation notices sent to property owners in March or April. The valuation has the date and time for a board of appeals meeting, should a property owner believe their valuation is not accurate. Tumberg also pointed out there are property tax relief programs available as well.

“Contact the County Auditor’s Office for more information about these programs,” she suggested.

The approved property tax levy stands to increase the city budget by about $812,713. According to the budgetary breakdown of the city’s property tax levy, the increases and decreases are projected to be as follows in 2024:

• $4.52 million total for the general fund, which is a 7.3% increase from 2023. The increase was attributed to equipment, supplies and wage increases.
• $377,156 for the Detroit Lakes Fire Department, which is a 34% increase from the previous year. Tumberg said, "that department is a little bit misleading because the revenue side of the fire fund is one year behind." She noted the 2024 year budget is the first year that includes the full-time fire chief. "So that impacted this budget quite a bit," she said.
• $346,360 for the library, which is an increase of 2.45%.
• $132,500 for the airport fund, which remained consistent with the 2023 allocation.
• $44,228 is allocated to the Development Authority, which was a decrease of about 32% from the previous year.
• $176,130 for the Sports Arena budget, which was an increase of about 12% from 2023.
• $605,000 was assigned to the equipment and building fund, which was about a 38% decrease from 2023.
• $200,000 was allocated to street rehab projects for 2024. No funds were allocated to the category in 2023.
• $1.654 million was allocated to debt service funds for construction projects the city has done. In 2023, there was $1.086 million allocated to the fund.