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Dave Olson, Published January 06 2009

Moorhead faces possible service cuts, layoffs

The message to Moorhead residents and city workers was loud and clear Monday night during a meeting of the Moorhead City Council committee of the whole.

Brace yourselves.

With the state of Minnesota facing a revenue shortfall that could exceed $6 billion over the next several years, the shockwave heading for cities like Moorhead will be huge, Moorhead City Manager Michael Redlinger told council members.

Cutbacks in services and employee numbers are a possibility, according to Redlinger.

He said the city’s reserves in the neighborhood of $10 million will help Moorhead weather the storm, but he said “structural revenue problems require structural solutions.”

Redlinger said it was too early to know how much local government aid the city will lose, but the chill started to be felt at the end of December, when the state cut its aid payment to Moorhead by $560,000.

The loss was absorbed by fund balances within the budget.

Redlinger predicted, however, that the bleeding in local government aid will continue, perhaps amounting to more than $2 million over the next year or two.

“This is unprecedented,” Redlinger said of the looming revenue crisis.

Council member Nancy Otto asked Redlinger if wage freezes and layoffs would be on the table.

Redlinger said people make up the largest part of the city’s budget, so cuts may be necessary, but he stressed the city recognizes its workers are its greatest resource.

“We want to retain as many as possible,” he said.

Jobs that generate revenue and help pay for themselves, such as engineering positions, will be less vulnerable than jobs that do not, said Redlinger.

He said meetings will be held with representatives of employee unions to discuss options.

Some things that helped the city through a similar crisis involving local aid several years ago, such as timely retirements and leaving positions open, may not be as helpful this time around, according to Redlinger, who added that deep cuts in operating expenditures have already been made.

“A lot of our options are already exhausted,” he said.

Redlinger said specific proposals for dealing with the revenue crunch will be developed in the coming months.

“We, as a council, are going to have some hard decisions,” said Mayor Mark Voxland.

Readers can reach Forum reporter Dave Olson at (701) 241-5555