By Sara StrongCity government, as Luverne knows it, won’t be the same after budget cuts.The next two years will be full of service and probably personnel cuts. Even after that, city taxes and fees could still increase.Councilman David Hauge said at the Monday budget meeting, "These numbers are too big to avoid services suffering, the council has to make a policy choice. We need to trim for long-term savings."With reduced state aid this year and probably next, the city can levy a greater percentage for its budget than usual. For example, if the maximum is levied for this year, that will mean city taxpayers will pay $685,000 — increased from the $534,000 last year. The total governmental budget for the city is about $3.5 million and is supplemented by state aid and revenue funds from the city like some utilities and the municipal liquor store.Even with making the maximum allowable levy jump, the city will still have to come up with almost $200,000 in cuts. It’s worth noting, as well, that the city levy has decreased for the past two years.The Luverne City Council Monday gave direction to Interim City Administrator Jeff Haubrich to meet with staff and come up with as many cuts as possible.Councilman Bob Kaczrowski said, "The odds are, that if we’re talking about cuts, we’ll also have to do it next year."Haubrich said getting ahead of possible state funding shortfalls in the near future would be prudent. If state money is tight, city aid could be favored to go.Haubrich said, "This is not a greater-Minnesota focused administration."Staff and service cutsMayor Glen Gust said one of the biggest parts of the city budget is salaries and staff benefits. He said that at a recent League of Minnesota Cities conference, many city representatives talked about already reducing the number of workers or adopting a hiring freeze. "That’s what departments are doing," Gust said. "It’s unfortunate, but…"Haubrich said, "This is delicate for morale of the staff. Some people will lose a job and that’s just a fact of life."Hauge said, "Everyone is going through this together because taxes could go up too. … If it’s cutting services or [people’s income] — either way they aren’t nice decisions."Early retirement incentives are also an option, but not many city workers could qualify at this point. Laying off workers would take some time to realize savings. Unemployment benefits last 26 weeks, and the city pays salary and benefit costs more than a private business which carries insurance.Councilman Pat Baustian said combining department leaders might be an efficiency measure the council could also take. He suggested combining the Public Works Director and Utilities Coordinator. The timing could work, Baustian said, with the upcoming retirement of Utilities Coordinator Red Arndt. That could help avoid some other layoffs and make an impact in future budgets as well."Here we are at the end of June, and with Red’s job ending in September, we have to make a decision soon," Baustian said.Haubrich said, "In my mind there are two or three that could be rearranged."He said that not only department heads would be affected by the restructuring. Many workers would be subject to new or changed job duties. Haubrich added that he’s not prepared to make those kind of sweeping changes within the city at this point. He said, "I don’t want to be the one to make those decisions because I’m not going to be here, six months or a year from now." A new city administrator will be able to add his or her ideas in September when a new one is hired.Some department leaders were at the Tuesday Council meeting. Public Works Director Darrell Huiskes said it’s important to separate needs from wants when cutting the budget. "All of us have our sacred cows," Huiskes said. "But we have to get rid of those. It makes cuts for the long term easier if you take those out."He said he’s privately reviewed his department budget and can come up with cuts to satisfy the Council’s request.Before receiving direction to make broader budget cuts, city staff had come up with $57,100 to cut from this year’s budget.Fee increases vs. raising taxesThe council has already discussed starting a street light utility to fund future street light costs which come as a major expense when they are needed. If the council started the new fee this year, each customer would pay a couple dollars a month, generating about $60,000 for the city this year.Councilman Bob Kaczrowski said he leans toward favoring the city raising taxes rather than developing numerous new fees, because it’s "more up front." Utility customers will probably see rate increases, aside from what’s considered for the budget problems. Water and sewer rates haven’t been increased for five years and the city is currently in a rate study to assess what the new rates should be.Also, the city’s electric providers will be raising rates and Luverne customers will be charged more. The city doesn’t have those final rate numbers yet.Outside the governmental budget talks, other things impact the city’s bottom line: investments are earning less, health insurance is increasing and heating costs are expected to increase this winter.Once city staff meets to make further recommendations, the Council will prioritize what it will cut from there.
