The city of Edina is cutting $2 million from its 2020 budget to account for projected pandemic-related revenue losses.
The budget amendment, approved unanimously by the Edina City Council May 19, accounts for an expected shortfall of $1.4 to $1.5 million in the city’s general fund, which pays for the “guts of city government,” basic services such as police and fire, public works, engineering and community development, City Manager Scott Neal said.
In a staff report to the council, Neal called the reduction in services “modest.” It means, for example, that parks will be maintained, but won’t get mowed as often, the staff report explains. In another example of the impact, police and firefighters will serve the community’s basic safety needs, but they won’t be attending as many community events as before, according to Neal.
The cuts also mean “streets will get swept, but not as often and not by special request,” the staff report notes.
The $45 million in the current general fund budget represents about a third of the city’s total budget. The cuts approved last week include an extra $600,000 to address uncertainty regarding property tax collection.
Normally, the city collects 100% of taxes levied. “This year, we’re not so sure if that’s going to be the case or not, so we want to give ourselves a little bit of a hedge there,” Neal said.
If the city collects all or nearly all of its property taxes, the extra $600,000 will go toward Edina’s 2021 Budget Stabilization Fund, which was created in April in response to the pandemic.
“What we’re doing is indicative of our self-reliance,” Mayor Jim Hovland said. “Regardless of what happens with respect to funding from Congress or funding from the State Legislature, I think we’ve got ourselves well-positioned,” Hovland said.
If outside aid does arrive, “maybe we can make some different decisions,” Neal said.
Council members praised the timing of the budget amendment.
“We’ve got to cut come spending now so we don’t have to be so drastic later,” Councilmember Mike Fischer said. “I just think it makes sense.”
“We’ve responded quickly and smartly, and I think this is a really nice balance,” Councilmember Kevin Staunton observed.
Due to a tax base that relies on residential properties more than commercial, Edina looks to be better positioned than cities such as Bloomington that rely heavily on the commercial side, Councilmember Mary Brindle noted.
Indeed, the biggest taxing concern applies to commercial properties, Neal confirmed, explaining the worry comes from tenants potentially not paying rent.
“We’re going to see a lot of that in commercial real estate,” Neal said.
– Follow Andrew Wig on Twitter @EdinaSunCurrent