Duluth mayor outlines budget challenges

Duluth Mayor Don Ness admitted his first year in office was a challenging one -- probably an understatement for the year his administration overcame a multi-million dollar budget deficit only to get handed a new $1.7 million cut from the state in December.

Now, Ness says the city faces the likelihood of millions of dollars in additional cuts in state aid, but he says Duluth will deal with that when it happens.

"We will not become captive to those factors outside our control, but rather double our efforts to improve and find solutions within our own sphere of influence," Ness said.

Last year Duluth laid off city workers, reduced library and parks services and sold undeveloped lakefront property.

Now, Ness predicts a new year that's going to be at least as tough as the last.

"We must reform our expectations of what city government can and should provide, and come to a realistic understanding of the cost of providing those services," he said.

Ness briefly touched on one of those looming issues -- saying he'll meet later this month with retired city workers, who's city-provided health care plan eats up a greater share of the city's budget every year. The mayor wants to reduce the cost to the city, but some retirees have made it clear they have no intention of accepting a change in their benefits.

Ness proposes a series of fundamental changes to Duluth City government, from gee-whiz high tech innovations to new sales of valuable Duluth city assets.

He proposed a GPS-based system to keep an eye on city vehicles.

"The system, called Field Force Management, will streamline job dispatching and reporting, while reducing excess fuel use and vehicle wear, and discourage indirect routes, speeding, excess idling, and/or unauthorized after hours use," he said. "This system will greatly improve accountability."

But the big ticket item comes in the potential sale of some city utilities. Ness said the city will select a broker to consult on the potential sale of the city's natural gas utility system as well as the city's steam plant, which provides heat to downtown buildings.

"The sale of these assets could bring the city tens of millions of dollars, aiding us in our goal of long term financial stability," Ness said.

Duluth City Council member Jim Stauber said he supports the utility sale, although he said would have liked to have heard more specifics on spending.

"Clearly I think we're going to see some additional cuts, and it would have been nice to hear about those, and how we're going to manage the budget shortfall as a result of receiving less local government aid," Stauber said. "But, I think he probably didn't want to dwell too much on the reality which is more negative than positive, and looked at some possibilities."

Council member Garry Krause said the utility sale alone won't fix the budget. He said there's still fat that can be cut from Duluth city government.

"Some councilors would say we've cut to the bone already, but we really haven't," Krause said. "You've heard some illusions to things such as GPS systems on vehicles and more efficient use of vehicles, and those types of things are areas where we have to work on savings, but ultimately we're going to have to prioritize on what services we're going to continue to operate and this time, and what we do not want to do."

Duluth's budget problems have made it something of a public example, even the occasional butt of a joke. Late-night talk show host Jay Leno mocked a proposal last year to charge for some fire calls.

But last year's budget hurdles could set an example for other Minnesota cities now facing the same kind of financial crisis, according to Rachel Walker, with the League of Minnesota Cities.

"We hear anecdotally from a lot of our members that folks are looking at very similar things -- trying to streamline operations, trying to look for partnerships where they can, trying to seek out efficiencies in how they do things; how they use equipment -- that kind of stuff," she said.

Ness, meanwhile, claims to be optimistic. He predicts more fights ahead, and says he's prepared for a vigorous and healthy debate.

Ness said success can lead to prosperity, a prosperity that city residents will first have to earn.

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