Burnsville takes an early stab at city cuts

On Thursday evening, Burnsville City Council members received a thick document detailing staff recommendations on $1.5 million that must be slashed from the city's $26 million general fund this year.

And it's just the beginning: That's just how far the city is in the hole for this year. Next year, it faces another $1 million shortfall.

Cuts are expected across the board, said deputy city manager Tom Hansen.

"The council is going to be looking across the spectrum of city activities," Hansen said. "They're going to look at cutting programs, cutting staff, cutting levels of spending."

The state faces, in fiscal year 2010-11, a $4.57 billion spending gap. So all cities will be subject to cuts, according to the League of Minnesota Cities.

Hansen said he has never seen "this significant of a budget crisis on such short notice." Typically, city officials can make decisions in a more measured fashion, with budget decisions in November and December.

City department heads and council members were mum Thursday on what might be cut, preferring to wait until they've had more time to review proposed cuts before commenting.

"We took a bit more proactive approach at the behest of our council because they recognized every day that passed was one day less that we had to save money," Hansen said.

He added that it's better to make cuts now and save money throughout 2009, rather than wait until there is less time left in the year.

There's no way out of the cuts, Hansen said, because the 2009 tax levy is already certified, so taxes can't be raised. That's forcing cities to come up with cuts while they continue to maintain financial-management policies, including making payroll.

"The City Council has to balance the budget," Hansen said. "We're not given any choice in the matter. We can't fund a deficit, so to speak. We literally have to come up with $1.5 million in budget cuts this year, just to deal with 2009."

Already down a half-million

"We were already down a half-million dollars in late 2008," Hansen said. "In 2009, it's crystal clear that we are not going to be getting $1 million in Market Value Homestead Credit for 2009. And that's money as well that we've already planned on having in our budget that we passed in December.

"So starting Day One in 2009, we're already down $1.5 million in a $26 million general fund. That's a significant challenge for us to deal with, and we're not alone. Virtually every city is touched in one way, shape or fashion, but we are probably more than most in the Market Value Homestead Credit area."

On Thursday night, Burnsville Council Member Charlie Crichton said the proposal involves much juggling of city workers' job duties, in some cases with one person doing what two people have been doing. It was not immediately clear what positions might be cut, he said.

Crichton said he supports the Legislature's previous actions to enact the homestead credit for property owners on their taxes. But cities have relied on a formula in which they figured the amount of those credits into their tax levies, based on the promise the state would reimburse cities for the amount of the credits. Now the Legislature has taken away that reimbursement to cities, which is causing the local shortfalls, he said.

"The solution is for the Legislature to pay its bills," Crichton said.