Now the budgetary heavy lifting starts at Minneapolis City Hall.

The City Council unanimously adopted a revamped 2009 budget Thursday in response to state aid cuts, but the real budget strain will come in 2010.

That budget will stress city spending in ways unprecedented in recent years. Not only will the city lose another $16.1 million in expected state aid cuts, but it also must pay an added $12.8 million to start to offset police and fire pension fund investment losses. It also will have to balance its budget without the $4.7 million in federal stimulus money that's propping up the police budget this year.

That adds up to a budget hole of more than $33 million next year.

The city can slice that by more than half if it sticks to its past policy of raising property taxes 8 percent annually, which would raise an added $18 million.

The remaining $15 million is likely to mean a lot of pain for many departments. Together, they consume $378 million of city general fund money, most of it from property taxes, fees and state aid. The city's five-year budget projects that figure will increase by $6.6 million next year to offset increased operating expenses ranging from salary growth to higher health insurance premiums.

But the city is losing more than four times that amount from the pension and state aid hits alone.

To put the $29 million hit from pensions and lost aid in perspective, the city could ax its entire departments handling civil rights, property assessment, personnel, communication, the city clerk and lobbying without totaling $29 million in general fund savings.

"We will have to make very tough and very painful cuts that will have an impact on every part of the city," Mayor R.T. Rybak said last month, when he proposed the city's revamped 2009 budget, which absorbed $14.8 million in state cuts. The city eliminated 59 positions but used federal stimulus money and money freed earlier by paying down some debt to absorb some of the state cuts.

That's why many of the amendments that the council's budget committee added to Rybak's revised proposal dealt not with 2009, but rather directed departments to study methods of helping to balance the 2010 budget.

For example, picking up on a couple of Rybak's suggestions, the council directed studies of potential savings from closing the city health department laboratory and cutting part of what the city civil rights department does.

The council wants to be sure the city won't end up paying more to use outside labs before shutting its own. And rather than simply shifting investigation of civil rights complaints to the state, as Rybak suggested be studied, the council directed a top-to-bottom review of that department to see whether $300,000 can be cut.

It also wants the Fire Department to improve how much money it collects for rental housing code violations, the city's tech managers to pool cell phone services and centralize computer printers, and finance officials to study whether federal development aid can be substituted for some services now funded with property taxes.

The council also directed that a street-lighting fee proposed by Rybak be developed for it to debate later this year, but decided not to assume that it will be approved soon enough to produce the $850,000 that Rybak projected for 2009 in his budget proposal. (Rybak is counting on the per-parcel charge generating $1.7 million in 2010.) To offset that foregone $850,000 in per-property fees, the council deleted $400,000 in pedestrian improvements around the new Twins ballpark. That leaves about half of the $3 million Rybak originally sought for those improvements. Also sliced to offset the foregone streetlight money was $250,000 to start work on improving the timing of light-rail-hampered Hiawatha Avenue traffic signals; $100,000 for work on reopening Nicollet Avenue at Lake Street; $75,000 for a pilot youth anti-prostitution program; and $25,000 to sterilize animals at the city pound before they are adopted.

Some of the cuts in Rybak's 2009 revamped budget will be deeper in his 2010 proposal, according to the mayor's budget speech last month. For example, in his revamped 2009 budget, Rybak sliced $250,000 from the city's $10 million snow removal budget; that jumps by another $1.25 million in his 2010 budget plan.

Still, Rybak urged the council to look on the bright side of the 2009 budget it approved. It keeps the same number of police on patrol and firefighters, while avoiding layoffs among other city employees, maintaining his plan to beef up infrastructure investments. And it retains youth and adult job program funding.

He urged the council to approach the 2010 budget with "speed and urgency but not panic."

Steve Brandt • 612-673-4438