On Monday, the Albert Lea City Council will hold a public hearing on its proposed 2010 budget. A key part of the budget is the adoption of the 2010 tax levy, which will also be set that night. Albert Lea’s proposed 2010 general fund budget is $13,657,076, which is $1,093,024 less than 2009.

This is due in large part to the reduction in local government aid as set by Gov. Tim Pawlenty’s unallotment action this past summer and in December 2008. Rather than increasing property taxes to cover this reduction, city staff and the City Council have instead chosen to reduce spending. Please note that parts of the city’s budget are separate, freestanding funds, including sewer, water and solid waste (transfer station). Funds to operate these items are not included in the general fund.

For comparison, 2009’s total general fund budget was $14,750,100. The 2009 general fund tax levy was $4,520,000 plus $146,200 for public improvement revenue (PIR) bond debt service and $88,350 for capital improvement bond debt service. Local government aid and other intergovernmental revenue, fees, licenses and other miscellaneous revenue fund the remainder of the budget.

On Sept. 14, the City Council adopted, on a 5-2 vote, a proposed 2010 general fund tax levy of $4,655,000, plus $354,850 for PIR bond debt service and $85,425 for capital improvement bond debt service. These are amounts used to calculate the proposed property tax statement we recently received from the Freeborn County administrator’s office. This showed an increase in the city’s portion of the tax statement for 2010.

However, the City Council continues to look at reductions in the proposed levy, and what will be presented this coming Monday is actually $65,000 less than what was proposed on Sept. 14, and there is still the possibility of adopting a general fund tax levy with a zero increase over 2009.

Even with a zero increase in the general fund levy, we would still be left with an overall increase due to the debt service portion of the levy. The city has a bond issue generally every other year, and we did one in 2009 to finance recent capital improvement projects. We obtained a very favorable rate under 3 percent in our bond issue, due to the city’s record of financial stability.

So, even with cutting more than $1 million from general fund spending, we are left with an overall increase in the tax levy. Could we cut more from the budget? That is always a possibility, but with the uncertainty as to state funding in the future, we are going to have harder choices to make beyond 2010.

I have taken an active role on a state level in the debate about local government aid, through our city’s involvement in the Coalition of Greater Minnesota Cities. Our position has never been that cities should not be a part of the budget solution. In fact, to this point, cities have taken a disproportionate share of the cut to the state’s budget — over 20 percent of the governor’s unallotments, yet LGA represents about 3 percent of the state’s budget.

LGA’s purpose since its inception in the early 1970s was to keep Greater Minnesota strong. Our cities have used this funding to provide essential services at an affordable price to property taxpayers. Without LGA, quality of life disparities between different regions of the state will grow.

For instance, I have asked gubernatorial candidates what we as a city should do with quality-of-life amenities such as our city ice arenas, our swimming pool complex, and our Marion Ross Performing Arts Center.

These are not essential city services as are streets, water and sewer services, or police and fire protection. Do we raise fees and risk making them too expensive for users to afford? Do we just close them? Or are we forced to raise property taxes and further the disparity between us and portions of the state that have a larger tax base over which to spread these costs? I haven’t received a clear answer yet, but would encourage you to ask this of candidates, too, as Gov. Pawlenty has chosen not to run again.

Since the end of 2008, Albert Lea has seen a cut of $1,516,291 in LGA, including cuts for 2008, 2009 and 2010. Again, as a city we have chosen to reduce the budget instead of raising property taxes. We recognize that people are struggling as never before in recent years, and that for now, we must hold the line. In fact, on Nov. 10, I also became unemployed. I was one of 23 people whose jobs were eliminated from my full-time employer.

City staff has been very innovative in suggesting ways to maintain services as best as possible. Even so, we will see some service reductions; for example, our library will be closed Friday and Saturday beginning Jan. 1. The city has fewer employees than last year — presently at 137 full-time employees, down from 150 in 2008. This has been achieved by not filling many open positions created by retirements or people leaving for other jobs. To this point, we have avoided layoffs, but several positions may yet be affected in 2010. We are still hoping for some solutions to be agreed upon to avoid this.

Having laid all this out, I would encourage you, as a citizen, to give your input by contacting me or your council member. You may attend the public hearing this coming Monday night and speak if you wish. However, I wanted to try to give background on how we got to this point, and to begin thinking about how we proceed in the future.

Thank you, and on behalf of the city of Albert Lea, here’s to a merry Christmas and a happy New Year in 2010.

Mike Murtaugh is the mayor of Albert Lea.