For the first time in its 50-year history, Three Rivers Park District is coming close to hitting the cap on how much it can spend.

The suburban Hennepin County park district -- the only park district in the state with taxing authority -- is considering reining in spending to avoid laying off staff.

Next year, because of foreclosures and the weak housing market, the taxing capacity of the parks district, which operates 19 regional parks and preserves, will sink rather than climb for the first time.

In the 45 suburban Hennepin County cities and townships, the market value of property is expected to drop by 3.8 percent. That means the district is on course to max out its levy limit by 2011 or 2012 if values don't rebound, said chief financial officer Howard Koolick.

With market values dropping, the district will have to cut costs next year to avoid layoffs and reduced park services in future years, said Three Rivers Superintendent Cris Gears.

"We aren't actually losing the ability to fund the operation yet," Gears said. "But if that [levy] ceiling continues to get lower and lower, at some point we are going to bump our heads against it and then we would have to make cuts."

Gears presented options for cutting costs in the 2010 operating budget and asked Park Board members on Wednesday to decide: "How close should we ever get to the levy limit?" The district's 2009 operating budget is $45 million.

The board is likely to decide the levy limit in about a month.

Raising fees is another option, Gears said. But increases might discourage people from using facilities, and might actually cost the district revenue. Last year the district collected $13.3 million in user fees.

Laurie Blake • 612-673-1711