Small towns brace for LGA cuts

Published 12:11 pm Saturday, March 6, 2010

In the last few years, cities like Austin and Albert Lea have addressed cuts to Local Government Aid as the state faces a budget deficit. But now, Gov. Tim Pawlenty’s proposed budget would reduce the amount of LGA funding to cities with a population of 1,000 or less.

Area small towns are joining others now preparing for LGA cuts. Last year, LeRoy received about $291,000 in LGA funds and was slated to receive about $305,000 in funds this year. However, Patty White, city clerk and treasurer of LeRoy, said about $65,000 in LGA cuts are expected in 2010. LeRoy’s budget is about $475,000.

Since a city like LeRoy has fewer employees and offers fewer services than a city like Austin, she said it may be difficult to make cuts. The city contracts with the Mower County Sheriff’s Department for its police services, and the city has about 10 employees — four full time and six part time.

“Unfortunately when you’re a town of 900 people, there’s not a lot of fluff in the budget,” White said.

For example, Mower County is looking to save money by potentially switching to a four-day work week in county buildings. White said such a change wouldn’t amount to notable savings in an office with a few employees.

At the same time, White said she feels fortunate cities like LeRoy have been spared from cuts so far, as she said larger cities are probably running out of areas to cut. She said it’s important that all cities share the burden of the budget cuts.

City staff is going through the budget to see what nonessential things could be cut that wouldn’t be felt throughout the town.

Each year, the city sets aside money for the purchasing of new equipment and vehicles. White said the city could use that money in the general fund this year, and that would put about $30,000 back into the budget — less than half of the projected LGA cut. However, she said the city would only want to dip into that fund for about two years.

Where the rest of the money will come out the budget is the key question, White said.

She said the cuts could potentially affect things like road repairs and plowing.

White said the difficult part is making up the rest of the money.

White isn’t sure where the rest of the money could come from, and she said it could affect things like road constructinoMaking up the rest of the cut

The LeRoy City Council hasn’t met since the cuts Pawlenty proposed his budget cuts. The council is meeting on Tuesday and will likely discuss the issue then, White said.

Other small towns have dealt with such cuts in recent years. Blooming Prairie, with a population of just less than 2,000, has seen LGA cuts for about three years.

“We’ve been really watching our pennies,” Mayor Harold Peterson said.

While Blooming Prairie has avoided major cuts and major layoffs, Peterson said the city has postponed things like road repairs. As a result, he said the city roads aren’t being kept to the typical standard.

The city is saving money by avoiding minor repairs to roads like overlays and crack seals; however, but Peterson expects current savings to cost the city more long term. Without minor repairs and upkeep, more roads may now need to be replaced in the future.

Despite cutting back on road repair, Peterson said the city has been able to cope with the LGA cuts. Peterson said such cuts don’t necessarily affect smaller towns differently than cities like Austin and Owatonna, he said the cuts are proportional to the city and the city’s budget.

“It’s an equalized misery,” he said.

Had the LGA cuts occurred a decade ago, the pinch may have been felt more in the Blooming Prairie. Peterson said the city faced financial difficulties about 10 years ago, and LGA cuts would have been devastating at that time.

Peterson said he is confident that the nation is beginning to come out of the recession. He recently participated in a radio forum with leaders from other area cities. During that forum, he said the participants generally agreed that Minnesota hasn’t been affected as drastically as other parts of the U.S.

Even though some Blooming Prairie companies laid off employees, Peterson said the city is fortunate that no employers went out of business.

Brownsdale Mayor Robert Luthe said the city is prepared for the potential LGA cuts. They city is planning to use reserve funds to avoid raising taxes.

“I think we’re all in the same boat,” Luthe said. “We’re all trying to paddle upstream and keep ahead of the tidal wave.”