Mayor Herb Bergson made an unorthodox move when he hired Julio Almanza, former ISD 709 school superintendent, as acting – and some are speculating, permanent - City of Duluth administrator. According to a recent DNT article, the mayor, while firing a supremely competent and popular administrator, Mark Winson, reasoned that Almanza possesses skills that Winson did not. Namely, Mr. Almanza’s ability to lower health care costs of union employees.

Herein lays the rub: lowering the health care costs of union workers will do little to alleviate ailing infrastructure, solve long-term budget problems, or move Duluth forward.

Let me be the first to state that finding resolution to this issue will be a welcome relief, and I wish Mr. Almanza well in his efforts to accomplish this task. However, when one considers two other issues facing our city, he or she has to question the mayor’s thinking in his decision to hire Mr. Almanza as city administrator. The first issue is the federal mandate to fix the ailing sewer system. Having served on the Sewer and Water Task Force, I understand the need to spend approximately $200 million to fix our aged, leaky, and overburdened sewers. The other, more public, issue is that of Retiree Health Care. The latest estimates conclude the city owes $178 million just to make the fund current – and the $178 million does nothing to resolve any unforeseen circumstances that might drive costs even higher.

To be clear, Mayor Bergson did not create either problem and most certainly he will experience the political fallout when he attempts to resolve them; yet, nonetheless, he and his new administrator must face each issue with resolve – our city’s future depends upon their actions.

Given the city’s revenue picture, challenges lie ahead. It takes approximately $75 million to run our city each year. We collect approximately fifty percent of the $75 million from the state in the form of Local Government Aid and/or Inter-Governmental Aid, twenty-four and a half percent from parking fines, earnings on investments, charges for services and so forth, almost fifteen percent from sales taxes, and slightly less than ten percent from property taxes. If any of these revenue streams is disturbed, the city could experience a failure in its fiscal levy - not unlike the great New Orleans flood that resulted from a levy that was not capable of sustaining such high volumes of wind and water.

Although I hope that our dikes will hold, I worry that politics may undermine our fiscal levies. Clearly, we cannot raise property taxes fast enough to reinforce our fiscal dikes. Nor can we guarantee that state aid money will not be cut or that sales tax collections will remain strong. We can, however, swallow hard and resolve both the sewer and retiree health care problems.

To do so, we must rethink how city services are purchased and delivered. First, we must insist upon reform in our employee contracts – no longer can we afford to pay benefits far above those in the private sector. Additionally, we must insist upon competitive sourcing, wherein unions bid with the private sector for work the city needs, much as they now do in several larger Twin City suburbs.

We can no longer afford the luxury of thinking that taxes must increase or services must be cut. We must think and act differently to ensure our fiscal levies hold in the face of any storm.

But isn’t that why Mayor Bergson hired Mr. Almanza in the first place? We’ll all be better off if this is true. Best of luck Mr. Almanza - you’ll need it.