City Budget Update - February 18, 2009

The City Council continues to work on revisions to the 2009 City budget due to reductions in Local Government Aid (LGA) from the State of Minnesota. LGA makes up about 50% of the revenue for the General Fund and the balance of the revenue is from property taxes and fees\charges.

The General Fund is responsible for Public Safety (Police, Fire, Animal Control and Emergency Management), Streets, City Office & City Hall, Recreation & Parks and Building\Zoning. Of these accounts Public Safety comprises about 42% of the General Fund budget, Streets comprises 24% and Parks & Recreation comprises 12%.

In December 2008 the State of Minnesota cut $110,120 from the 2008 LGA payment to the City of Windom. In 2009 the Governor has proposed cuts to LGA that would reduce the LGA payment to Windom by $144,462. Unfortunately, the proposed cut to 2010 LGA is even deeper with a $301,663 reduction in Windom's share of LGA. In March 2009 the State of Minnesota will get an updated financial condition report from the Department of Revenue. It is largely anticipated that this March forecast will show a weaker State economy and larger State budget deficit approaching $7 Billion. If this information is correct the cuts to LGA may well be deeper than the Governor's proposal.

The City Council will continue to look for savings; however, to plan for the large LGA cuts significant changes to the City budget and operations will be necessary. At the February 17th City Council meeting the Council approved the reduction of all part-time help at the Parks Department. This action will impact the ability to maintain our parks to the high standards we have enjoyed in the past. All efforts will be made to minimize these impacts.

To assist the City Council with discussions on City revenues and expenses there will be additional opportunities for public input and comment. In the upcoming week or two the City will launch an on-line tool where the public can submit their ideas related to changes in the City's budget and\or operations. We will work with the local media to get this information out to you. Additionally, the Council is planning for a public meeting in May 2009. Hopefully, by May we will know more about the LGA revenues from the State and have a clearer target for the 2010 budgeting process.