Burnsville city officials are scrambling to fill a $500,000 hole in next year’s budget once occupied by garbage — or rather, the annual fees that a landfill owner pays the city to take trash.

Waste Management told city officials in October that its annual payment of about $1.3 million likely will go down to $800,000 next year. The amount is based on the tons of garbage that come in, and Waste Management says it soon will be hauling more garbage to its Iowa dumps and less to Burnsville, where it is running out of room.

“We got walloped with a half-a-million-dollar surprise,” said City Council Member Dan Kealey. “It’s quite a conundrum.”

City officials plan to use a variety of measures to bridge at least part of the shortfall, such as cutbacks in seasonal workers, hiring delays and pushing back plans for new software. The proposed 2019 budget includes new revenue from permits, emergency medical services and ambulance payments.

But that still would leave a $200,000 budget gap that city staffers will try to fill in the coming year, said Dana Hardie, interim city manager.

Burnsville’s situation underscores how much cities and counties with landfills come to rely on the host fees they receive to supplement their bottom lines.

The city knew that the landfill, just south of the Minnesota River, would run out of space in a few years for municipal solid waste, or household garbage. But officials didn’t know that Waste Management soon would be reducing how much it sends to Burnsville.

“We’ve been cutting [city expenses] for a decade and so there’s nothing left to cut that won’t impact services,” Hardie said.

Dakota County also stands to lose big bucks with less waste coming in. Host fees fund a large part of its Environmental Resources Department, but county officials don’t know how much that will be for next year because host fee calculations are more complicated for counties than for cities, said Georg Fischer, Environmental Resources Department chief.

“There’s too many moving parts for us to speculate,” Fischer said.

Some county officials said they felt they had been left in the dark about the plans.

Waste Management “had never come to the county to tell the county of their plans to take the garbage to Iowa,” Commissioner Liz Workman said.

Workman said that if the landfill runs out of space entirely in several years, it could leave Dakota County with a $1.9 million annual gap.

A five-year contract between Waste Management and Dakota County does ensure that the county receives at least $1 million each year, even if no garbage comes in, Workman said.

The need to honor that agreement, which extends through 2022, is partly why Waste Management wants to start trucking garbage to Iowa, city and county officials said.

The company can avoid “writing a million-dollar check with no revenue coming in at all,” Kealey said. “It’s a business decision that they had to make and I’m not blaming them.”

Julie Ketchum, a Waste Management spokeswoman, said the company was hauling less garbage to Burnsville to “extend the permitted life of the facility and have a less dramatic impact on the city and county.”

Though transporting waste to Iowa sounds expensive, Ketchum said it becomes more cost-effective as the Burnsville landfill runs out of space.

Waste Management officials have said they will eventually ask the Minnesota Pollution Control Agency (MPCA) for more landfill space in Burnsville. But getting MPCA approval for space may not be easy and likely will take years. The state prioritizes recycling and using waste-to-energy options over landfills, said Kirk Koudelka, assistant MPCA commissioner.

Waste Management has three landfills serving the Twin Cities metro area, Koudelka said. The Elk River facility has decades worth of space left, and the McLeod County landfill has more space than Burnsville, Koudelka said.

“There are landfills in Minnesota that could take [the garbage], landfills that they own,” Koudelka said. “This does look like it’s a business decision, not necessarily a regulatory issue.”

Kealey said that if the Burnsville landfill isn’t granted more space soon, the city could be in even deeper trouble and wind up with no landfill revenue at all. He said he hopes that the MPCA’s approval process for more landfill space can be fast-tracked.

If not, Kealey said, “We’ll have another $800,000 surprise … [that] we’re going to have to cover.”