But city leaders are doing their best to buckle down and serve citizens without huge tax increases or loss of services.

Following is a look at how Pequot Lakes, Nisswa and Lake Shore are faring.

Pequot Lakes

The city lost approximately $44,000 in local government aid (LGA) in 2009 and expects to lose another $44,000 in LGA plus $28,000 in Market Value Homestead Credit (MVHC) in 2010.

"The loss of $72,000 in revenue for 2010 is huge for the city, but, aside from limiting street projects, at this point, we've been able to cut the budget without cutting services," several city officials wrote in an e-mail. "The city council and city staff worked to keep the 2010 budget the same as the 2009 budget expenditures resulting in a levy decrease of $28,000, or minus 1.94 percent. This reduction will be reflected in the city's portion of the tax bill."

These city officials - Mayor Nancy Adams, finance administrator Nancy Malecha, planning and zoning administrator Dawn Bittner and city council member Cathy Malecha - reminded Pequot Lakes residents that their tax bills also will reflect a school district levy increase of 6 percent and a Crow Wing County levy increase of 2.95 percent in 2010.

Though the council provided some relief for 2010, city officials are concerned about 2011.

What is exciting, the city officials said, is the city has a few new businesses in town, both small and large, that should help offset income loss.

In addition, they said, there are a number of possible new projects on the horizon.

Like all surrounding cities, Pequot Lakes has seen a drastic reduction in building permits issued the past few years. Since the city started keeping records in 2002, there has been a 43 percent reduction in land use permits.

On the positive side of that, permit revenue is down only 15 percent from what was budgeted, and this was without raising fees or reducing services.

"While we know that many of our local businesses are struggling, we have a new grocery store, a new restaurant, several businesses have expanded, and we have the possibility of a number of other projects on the horizon," these city officials said. "It is an exciting time in town."

Nisswa

Nisswa doesn't receive a huge amount of state aid, so that loss hasn't been dramatic. However, in 2009, building permits were down by about half from the previous year.

"We did look at raising fees for permits and applications for this year but decided now was not the right time," said Loren Wickham, city planner and planning and zoning administrator.

However, the planning commission did have at least one permit

application at every meeting last year, and that is continuing to carry over into this year, Wickham said.

"I hope that we've turned the corner from last year and that activity picks up. I think we will have a better year than last year but not significantly better," he said.

On a positive note, the city has a couple of commercial projects in the works, including a resort redevelopment, a new restaurant and a potential redevelopment project.

"We did make positive changes in our liquor operations last year with the remodel of the Pickle (Factory) that brought people back in the door and things are heading in the right direction there," Wickham said.

Looking at new ways to raise revenues in these times, the city is negotiating a lease agreement with a wireless provider to construct a cell phone tower on the city's wastewater treatment plant property, Wickham said.

Lake Shore

Teri Hastings, Lake Shore city administrator and planning and zoning administrator, said the city hasn't suffered - yet.

"Right now it's been very minimal. There's been no loss of services. So we haven't done anything different with plowing snow or the number of police officers or city staff. There's been no impact yet," she said.

Lake Shore doesn't get much LGA or MVHC.

"We don't rely on it. That impact was not a big deal for us like it was for the city of Brainerd or Baxter," Hastings said.

However, the city isn't earning as much interest on the money it does have, and it has seen a substantial drop in the number of building permits issued, which brings $10,000-$20,000 in revenue for the city each year. And building growth increases the city's tax base.

"Not that it was major, but the bigger impact is probably more in having the continued growth and helping cover the increases in budget as costs go up," Hastings said. "And now the concern will be if property values continue to decrease and the number of foreclosures that will have an impact on us."

The city has had a few foreclosures, and it takes awhile for the decrease in property values to show up.

"As of now we are OK," Hastings said.

The city's main businesses are resorts and restaurants, and they seem to be weathering the economic conditions so far, Hastings said.