Heitke says cuts in LGA no surprise, and the city is prepared
WILLMAR -- Willmar Mayor Les Heitke says the city had been anticipating possible cuts in this year's Local Government Aid from the state and planned the city's 2009 budget accordingly.
Heitke says his reaction to Gov. Tim Pawlenty's unallotment of LGA to help balance the state's budget is to not panic.
"At least since last December when the state unalloted money to help solve its financial problem in December, we knew that that was just step one and that there'd be future steps for reduction in state aid to cities,'' Heitke said Wednesday.
LGA makes up 22.1 percent of revenue in the city's 2009 budget of $20,842,162. Willmar's 2009 LGA payment of $4,596,086 will be reduced by $269,043. For 2010, Willmar's LGA payment of $4,674,125 will be reduced by $620,785.
Heitke said city staff, the City Council and the mayor's office prepared scenarios of how possible budget cuts starting with $500,000 up to $1 million would affect the city's 2009 budget.
"We asked our city staff to suggest what they could do to meet such cuts, so we have a strategy in place to meet this concern. Now that doesn't mean it's not painful and it doesn't hurt our city. It does,'' said Heitke.
He said unallotment delays certain projects such as street improvements and eliminates certain purchases such as a second street sweeper.
The mayor said the city did not lay off any employees, but imposed a hiring freeze. The freeze is not absolute however if a department head makes the case for replacing an employee. For example, the Finance Department had four employees and one retired and one was on maternity leave, which reduced the department to two employees.
Heitke said the council saw that replacing the retired employee was a critical need and allowed City Administrator Michael Schmit to replace the position.
Heitke said the city is faced with another situation because a police detective will be retiring this summer and also an engineering technician will be leaving the city.
"Now we have to look at our policy: are these critical positions that need to be replaced or do we stand pat on the hiring freeze. That will be looked at individually with the department heads,'' said Heitke.
He said the cuts from the state are painful.
"Fortunately Willmar has always planned ahead. We've got good, conservative fiscal management of our city funds and we'll certainly get through this first year 2009 because we've already anticipated it,'' said Heitke.
"The bigger problem is how do we handle the budget cut for 2010? But at the same time, the Legislature is going to meet next winter and we have to see if the Legislature is going to do anything to soften that cut,'' he said.
"At this point, we simply don't know.''
Schmit said the city is in much better shape because the 2009 LGA cut of nearly $270,000 is less than the $500,000 envisioned in the earlier scenarios. The task now is to come up with a program for 2010.
"Now that we know the numbers, we're going to be sending out the budget forms to the departments and we're going to try to figure out working with our different departments some ideas and recommendations for the mayor to include in his 2010 budget that he has to submit to the council,'' said Schmit.
"You never like to have to deal with these cuts, but we knew they were coming and we've been planning for them and we will come up with a program that I honestly believe will not result in reduced services to the community,'' he said.
"I'm not a hundred percent sure at this point what it will look like when all the dust settles, but it's not as bad as we thought it was going to be, so I think we'll be able to come up with a reasonable program.''