Posted by: Laura Langemo

When Duluth Mayor Don Ness started the planning stages for the 2010 budget... he discovered the city was facing a $6 million deficit.

Part of this had to do with Governor Pawlenty's $3.5 million cut in local government aid.

"That's had a devastating effect on our ability to provide quality services to the citizens of Duluth," says Mayor Ness.

Mayor Ness says they've had to make up the difference by cutting city services and government personnel.

"The vast majority of our costs are through our staff so holding these positions open or eliminating positions altogether has resulted in most of our cost savings," says Mayor Ness.

Mayor Ness says he also has plans to save money through changes to retiree health care.

"By moving retirees to a single plan, that will result in at least $1 million in cost savings for next year," says Mayor Ness.

Through these cost savings measures, Mayor Ness says he was able to present a balanced budget to the city council in August.

The budget also included maximum levy increases of 2.5% for general operations and 2.9% for the bonds issued for the new police station, which the council approved.

"We've faced huge deficits and there is no easy way to address a deficit. You either have to raise revenue or cut expenses," Mayor Ness.

The budget is now going through a review process.

It will go before the city council in December for a final vote.

For the first, time the city of Duluth is in the process of creating a five year fiscal plan... which will assist the city in budgeting money for the future.

The fiscal plan will be in place by next year.