The Duluth City Council met on Tuesday, May 26, 2026, at 6:00 PM in Council Chambers. The meeting included approval of the consent agenda, public comments on several topics, consideration of resolutions and ordinances, and discussion of the Downtown Development Strategy which was tabled for further committee review.
All consent agenda items were approved unanimously by voice vote.
On Agenda Items (Downtown Development Strategy):
On Non-Agenda Items:
I can't see far away classes. All right. Good afternoon, counselors. We will now open our finance committee meeting. Um welcome and thank you guys. Uh this is the second in a series of nine finance committee meetings designed to prepare and educate the council on the 2027 budget. Our intent throughout this series is to present financial information in a steady, accessible way so we can better understand the full picture without being overwhelmed by the complexities as we move to set the max levy in September and then the final budget in December. So thank you again. Let's begin tonight. We're going to hear from budget managers managers Missy Harold and Josh Bailey. We with the presentation on Strong Towns, the finance Dakota results. So I'll turn it over to you guys. Good evening, and thank you for having us, Chair Randor from City Councilors. Tonight we'll be walking through the Strong Towns Finance Dakota framework and sharing where Duluth falls within that lens of financial analysis. In January, Mayor Reinert invited the city's leadership team to read Strong Towns by Charles Morone. He then invited Chuck to speak to our leadership team retreat about Strong Towns and the six principles of building financially resilient communities. Our focus tonight will be on the first principle of financial solvency. Strong Towns emphasizes that long-term prosperity depends on a city's ability to sustainably maintain its infrastructure, services, and financial obligations over time. To support this discussion, Strong Towns provides a financial decoder that helps communities evaluate municipal financial solvency and long-term fiscal resilience. The following slides present an overview of Deluxe financial solvency using that framework. It's important to note that many of our budget discussions typically center around the city's general fund. However, the information in these slides reflect the financial position of the city as a whole, including all government and enterprise activities such as utilities and parking. Before we get into the actual uh slides and charts, which which I think there's seven of, I want to point out a few things. Uh first of all, the city follows accounting standards set by the governmental accounting standards board, also known as GASBE. This is an independent organization that uh sets the standards for state and local governments throughout the whole country. So the purpose of this decoder is to use a consistent method. It actually there's actually a cheat sheet that Strong Towns has that tells you where to pull these specific numbers from in your financial statements. Um that way all organizations are in theory using the decoder uh consistently if you're gonna look at your results compared to someone else's. Uh secondly, I also mentioned that the city is audited annually by the Minnesota Office of the State Auditor, and all of the numbers that we used for our for the decoder came right from the city's annual comprehensive financial report, also known as the ACFER. Uh we used figures from 2009 through 2024, and we'll update the analysis when the 2025 audit is complete. The numbers have been handed into the auditors. It just takes a while to get through their review process and their St. Paul office before the report is issued, but that will be coming in the relative near future. Um as we work our way through these graphs, the blue portion represents the more sustainable side of the trend. And depending on the metric, the blue section may appear at the top or bottom of the graph. But as you look at the graphs, blue means good and orange or gold or whatever color color that is, means kind of not as positive. Um also mentioned these are the strong town metrics. You could argue that there's other metrics out there, but for the purpose of tonight's presentation, we're using the the metrics as set up by strong towns, and I'll add some additional context and nuances as we go through the the charts. Um to focus less on the exact data points and more on the overall direction of the trend. Uh the key question is whether the city is moving towards greater long-term financial stability. The first graph shows the city's net financial position, which measures the difference between the city's financial assets, excluding capital assets such as infrastructure and buildings and the city's liabilities. In simple terms, it reflects the city's available financial resources compared to what it owes. The black bar represents the break-even point, meaning the city has sufficient financial assets to cover all of our liabilities. Values above that line indicate a stronger financial position, while values below it indicate greater reliance on future revenues to meet existing obligations. And I want to point out a nuance on this slide, which actually carries into several of the slides. As I mentioned earlier, we follow governmental accounting standards set by GASBY. For the 2015 audit, we had to implement GASB 68, which is accounting and financial reporting for pensions. The city of Duluth and all local governments throughout the whole country were required to report on their financial statements the pension shortfall for the plans they participate in. We participated in the Minnesota ParaPlan. Um we had to book a multi-million dollar liability for the city share of their of their pension shortfall.