Duluth City Council Meeting - August 25, 2025: Budget Preview, Library Advocacy, and Consent Agenda Approvals
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Duluth City Council Meeting – August 25, 2025
The Duluth City Council met at 6:00 PM on August 25, 2025, following a Committee of the Whole session that began at 5:15 PM with a preliminary 2026–2027 budget presentation and a library update. The regular agenda included consent calendar approvals, a pulled resolution for CDBG fund transfer, first readings of two ordinances, and public comments.
Consent Calendar
- Approved nine items en bloc (8-0, one absent), including: firefighter collective bargaining agreement (2025‑2027), Tyler Technologies civic engagement software ($56,874), temporary liquor licenses, CDBG fund transfer (pulled separately), sublease for CareerForce, budget revision for Regional Exchange District, stormwater contract (Ulland Brothers, $1,982,707), professional service agreement with Policy Pro 360 ($69,709.38), fire apparatus purchases ($815,952.78), fire department software ($35,750), and trail improvement agreement with Cyclists of Gitchee Gumee Shores (no cost to city).
Public Comments & Testimony
- Layla Davis (incoming Duluth East freshman, Lakewood Township resident) expressed strong support for the library, describing its role in her National History Day research and community programs. She urged the council not to reduce library funding, warning that cuts would harm students.
- Gay Traxall (Duluth resident, 420 West Fairball) advocated for maintaining or increasing library funding, citing a threefold increase in visits (92,000 in 2020 to 325,000 in 2024) and cardholder growth (40,000 to 53,000) while staff remained at 48 FTEs. She emphasized the library as a core service for vulnerable populations.
- Christy Rounds (Executive Director, Duluth Sister Cities) and Romesh Lakan (President, Duluth Sister Cities, 120 Summit Street) reported on a successful Japanese student delegation and announced upcoming adult delegations from Sweden and Japan. They also noted concerns about Canadian visitors feeling unwelcome and expressed hope for improved relations.
- Martin Rhodes (128 East Winona Street) offered suggestions on rip‑current buoys at Canal Park, alternative street parking fines, individual school bathrooms, and stopping church bells on Sundays, citing First Amendment concerns.
- Margaret Johnson (Chester Park resident, 17, Duluth East senior) spoke in favor of maintaining library funding, detailing her use of library resources for National History Day projects that reached the national level. She emphasized the importance of current hours for students and working families.
Discussion Items
- Budget Preview (5:15 PM Committee of the Whole): Chief Financial Officer Josh and Finance Director Melissa presented preliminary 2026–2027 general fund projections showing a $7.3 million deficit for 2026. Major drivers were personnel costs (83% of expenditures, 85% with workers’ comp). Two extremes were outlined: no levy increase with $7.3 M service reductions, or full levy increase (10.48% in 2027) with no cuts – neither considered sustainable. Administration is balancing through new revenue, expense reductions, and capturing new property growth. No overall FTE increase is planned. A full budget and levy presentation is set for September 4.
- Library Update (5:30 PM Committee of the Whole): Aaron Krieger, Executive Director of the Duluth Library Foundation, reported library usage increases: in‑person visits up 9% (2023→2024), digital checkouts up 26%, program attendance up 20% (over 47,500 in 2024). The library has 53,000 active cardholders. Staffing has remained flat since 2008 at 48 FTEs despite rising demand. Krieger warned that any budget cuts would result in reduced hours (already limited – no summer weekends, only downtown open Saturdays during school year) and disproportionately affect vulnerable residents. The Foundation funds programs, digital services, and capital improvements (e.g., children’s section renovation). Councillors asked about hiring holds (Administrator Staling noted no formal freeze but careful review of all rehires), historical FTE data, and the potential impact of cuts.
- Resolution 25‑0648R (CDBG Fund Transfer): Pulled from consent. The representative of Divine Konnections Inc. explained that the former YWCA Spirit Valley building was donated to them; they have reopened affordable housing for young moms, are renovating a child‑care center (opening fall 2025), and have state funds for four more housing units. They will maintain their Central Entrance and Annie’s House locations. The council approved the resolution 8‑0.
- Ordinance 25‑014‑O (Transportation Commission): First reading. Councilor Owl described extensive stakeholder negotiations to finalize enabling language. A suggestion from Councilor DeLuca to add “freight” alongside “commercial” was discussed; Owl noted “commercial” likely covers freight, but amendments can be made at second reading. No vote taken.
- Ordinance 25‑021‑O (Concurrent Use Permit for Guardrail): First reading for ISD 709 near E 11th St and N 8th Ave E. No discussion.
Key Outcomes
- Approved all consent calendar items except #5 (8-0).
- Approved Resolution 25‑0648R transferring CDBG funds from YWCA to Divine Konnections Inc. for the Diver Morning Sky Hope and Healing Center (8-0).
- Heard first reading of Ordinance 25‑014‑O (Transportation Commission); further amendments may be considered before second reading.
- Heard first reading of Ordinance 25‑021‑O (guardrail permit).
- Council previews: Councilor Awal announced a personnel committee meeting in September/October to discuss board and commission restructuring. Councilor Kennedy noted upcoming community meetings for the Spirit Valley Core Investment Area; date to be shared.
Upcoming
- Full budget and levy presentation: September 4, 2025.
- Final budget adoption: December 2025.
Meeting Transcript
Good evening. It's 515, so we will begin our budget presentation. Mayor, would you like to start I can make some opening. Oh, thank you, President Tomonic. Uh thank you, counselors. Um we'll invite um uh Josh uh and uh Melissa up to uh walk through just some of the preliminary information again, counselors. The goal here is just to kind of set the stage for both you and the public, kind of about the scope and what is underlying the budget challenges that we have this year. Um of course I'll be with you on September 4th to make uh um the full-blown budget and levy presentation. And I think uh uh President Tomonik uh, if I might just take a moment to remind the public that what we'll do in September is set the max max levy. Can't be higher, it could be lower, and then of course the final budget would be adopted in December. But um, Madam President, I would turn it back to you. Thank you so much. Can we call Melissa and Josh forward? And thank you for being here this evening to give us this preview. President Tomonic and Counselors, good evening. Um it's my pleasure to present this uh preliminary budget data. As the mayor had mentioned, uh this is just a high-level kind of overview of setting the framework of kind of where we're at in this uh current budget session. This first slide, and I won won't go into all the numbers. This is uh kind of the projection of where we're sitting with the general fund budget for 2026 and also looking forward to 2027. There's a projected seven point three million dollar budget deficit in the general fund in two thousand twenty-six. And then what this slide also shows is that you know revenue is not projected to grow much between twenty-six and twenty-seven. If we were to increase the the tax levy seven point three million in the general fund, we'd still have a ten point four eight percent uh increase that we're looking at in twenty seven. The major budget drivers, uh it really comes down to to salaries and benefits. That's there'll be some slides in the in further in the presentation that show what percentage of the general fund budget is uh personnel and and and benefits. Um, we have approximately 900 employees citywide. Um not all in the general fund. Seven union contracts, bargain four benefits. We have four contracts that are on a uh 2025 to 2027 union contract cycle, and then our police contracts will be 26 to 28. And in order to be competitive, um we've seen cost of living increases in the contracts, we've seen market value adjustments, we've seen additional steps, we've seen longevity pay decrease the number of years you have to qualify to get that. Because really what we're we're competing against other municipalities, we're competing against the state too. The market has changed. We have people leave employment with the city, go work for the state, where you can make similar, but you might be able to work remote. So just things have changed. I think this since the pandemic, just in in the uh in the employment world. And our people, I mean, these represent our core investment in essential city services. As I mentioned, we're in a competitive wage and employment environment. We don't always see as many people applying for jobs as we did in the past. I've already spoken about this. We have seven union contracts, basically cover all but a handful of city employees. And again, these are bargained for benefits that the employees are entitled to. And I've already spoken about the uh contract cycle. So again, this is the repeat of the first screen with some additional context on here. It kind of shows the two extremes, right? So you could not increase the levy at all and just simply reduce services by 7.3 million. The other end of the extreme is you could do a uh no reductions and just balance the budget through the levy. Keep in mind if you did that the second option, you're still looking at a 10.48% increase in 27. Neither of those options is sustainable. You know, there'll be more coming on September 4th when the mayor presents, but you know, this this budget that the mayor is going to present is going to include some new revenue for the general fund and also significant expense reductions. Keep in mind, too, that if we factor in new property tax growth, um, for example, you have 10 houses and everyone pays a dollar, and you build another 11th house and everyone pays a dollar, taxes have gone up. The levy's gone up 10%, but everyone's still paying a dollar.
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