St. Paul City Council members spent about an hour Wednesday talking about what they don't know.

Specifically, about what kinds of budget holes they'll need to fill this year and in 2010, once Gov. Tim Pawlenty uses his power of unallotment, an authority to cut money already appropriated for local governments, to balance the state's budget. He hasn't said exactly when he'll do it, though.

"There remains a lot of uncertainty," said Deputy Mayor Ann Mulholland, who briefed the council members on the progress of the 2010 budget process.

Mayor Chris Coleman is trying to coordinate a 2009 budget amendment with the 2010 spending plan.

The city is expecting local government aid, or LGA, payments in the amount of $62.6 million this year and $64.1 million next year. Payments come in July and December and are applied to the city's general fund, which pays for services such as police, libraries and parks.

City officials predict unallotment cuts of $7.7 million this year and $16 million in 2010. A gap of $10.2 million is already planned for 2010 because of inflation.

To deal with that, department directors are preparing 2010 budget scenarios with options for 5 and 14 percent reductions.

Mulholland said that one positive development from the legislative session was that the city will be allowed to use a portion of its special sales tax revenues, $3.5 million, to pay down debt. Officials had prepared for that amount to be added to the 2010 deficit.

Pawlenty has said local officials should spend down reserves, freeze salaries and determine spending priorities to deal with LGA reductions.

Mulholland said the city's reserves also serve as its cash-flow account and shouldn't be drawn down. Money from it was used to pay employees in January, she said.

Nobody has suggested raising the property tax levy for 2010 -- yet. Also unknown is how much federal stimulus money will be available next year.

Still, council members took a somber look ahead.

"There are no alternatives except to make the hard choices," Council Member Pat Harris said.

Council Member Lee Helgen said he's weary of substandard service in a lot of locations and suggested focusing on quality of services instead of quantity.

Coleman should present his proposed 2010 budget to the council by Aug. 12. The maximum property-tax levy will need to be set by Sept. 9.

Chris Havens • 612-673-4148