Good morning.

My name is Aisha Chugtai, and I am the chair of the budget committee.

I am going to call to order our adjourned meeting for Friday, October 17th, 2025.

Before we begin the meeting, I want to offer a friendly reminder to all members, staff, and the public that these meetings are broadcast live to enable greater public participation.

These broadcasts include real-time captioning as a further method to increase the accessibility of our proceedings to the community.

Therefore, all speakers need to be mindful of the rate of their speech so that our captioners can fully capture and transcribe all comments for the broadcast.

We ask all speakers to moderate the speed and clarity of their comments.

At this time, I'll ask the clerk to call the role so we can verify the presence of a quorum.

Councilmember Payne is absent.

Wansley absent.

Vita.

Present.

Ellison is absent.

Osman is absent.

Cashman.

Present.

Jenkins is absent.

Chavez.

Present.

Chowdry.

Present.

Palmasano.

Present.

Vice Chair Koskey.

Present.

Chair Chucktai.

Present.

That is eight members present.

Let the record reflect that we have a quorum.

I'll also remind my colleagues that we will be using speaker management today.

So please make sure to sign in.

Today we have two presentations related to the mayor's recommended 2026 budget from the community planning and economic development department and the regulatory services department.

I'll first invite the community planning and economic development director, Eric Hansen, to join us and begin his presentation.

Welcome.

Thank you.

And together with our staff, we are proud to present the CPE CPED's 2026 supplemental budget recommendations.

CPED operates within the development, health, and livability area of the public, the Office of Public Service, as you see highlighted on the slide in front of you.

And we work to grow a vibrant, livable, equitable, sustainable, and safely built city for everyone.

We have about 243 professionals that carry out this work daily.

We advance planning, housing, economic opportunity, and regulatory services that reach every neighborhood.

CPED is a diverse and complex department.

The team you see on the slide, and we measure out our success through our impact.

Uh striving for an inclusive city where everybody can fully participate in the economy.

Our department continues to deliver results that advance priorities.

This year we celebrated the opening of Wadeg Commons, a 39-unit uh affordable multifamily housing development by NOR companies and redesign Inc.

WattEgg Commons is an example of how CPED drives forward to increase opportunities for wealth creation, make sure we have more safe, stable, and affordable housing, and advancing a more inclusive economic future.

People like Arlene Davis, who brought her bought her house on the North Side with city support in 1996, is continuing to reinvest in that home with a new kitchen, which was funded by a CPED program.

Arlene has already raised her four children in this home.

And with up with the updates she made, she is ensuring that she's create that she's retaining the wealth she has created in this home.

Our achievements reflect CPED's broader impact for safe housing, real estate development, complete neighborhoods, and equitable access to living wage jobs across all 87 neighborhoods.

CFET CPED faces evolving challenges.

We have a post-ec our post-COVID economic uh uh economy which have shifted in consumption patterns.

We have uncertainty in federal funding and unexpected events like the one you see on the screen here.

CPED still remains resilient and adaptive thanks to the skilled staff and our approving systems.

CPED continues to be agile and resilient and is ready to meet the changing world because of the wisdom, skill, and tenacity of our talented staff at every level of the organization and the funding that drives our processes, programs, and investments.

We track performance through measurable outcomes.

Our CPED Impact Report is our annual report, which you can access by scanning the code on the screen.

CPEN operationalizes the city's strategic goals, plans, and directives to advance our primary objectives.

We report on our work through Outcomes Minneapolis.

This QR code will uh become will be at the last slide too, so if you miss it, we can catch you on the back.

Here are performance measures.

CPED's Impact serves as a department reporting to Outcomes Minneapolis.

It measures progress in key five key indicators affordable housing, workforce development, small business growth, and economic uh equitable economic opportunity.

We uh we track disparities by race to ensure that our work closes, not reinforces the historic gaps we see in our city.

We understand that our system was developed with intention to benefit some over others, especially between race and class in Minneapolis.

As the city's community development department, it is our responsibility and obligation to correct the harms of this system.

Highlights uh from CPED include uh historic level of affordable housing production with $90 million invested through the trust fund over the last five years, creating neat nearly 4,000 units, 450 adults advancing through workforce programs, uh, and afterwards averaging about 23 an hour in wage, putting millions of dollars into Minneapolis households, and a majority of our participants are BIPOC residents.

Going further, I'll share six metrics that demonstrates our impact.

First, you see this graph uh which tells the story about who has been able to buy affordable homes constructed with CPED support.

Through the Minneapolis Homes program over the last four years, this program has funded home buyer education, down payment assistance, and home repairs.

Minneapolis has one of the largest homeownership disparities in the nation.

And this and homeownership is the ticket to the middle class.

Through Minneapolis Homes, we're expanding access to homeownership, critical to building generational wealth.

Harrison Town Homes is an example.

CPED invested 2.13 million dollars to help families like RECA Barbers purchase an affordable home through a community land trust model.

For Harrison Town Homes, CPED partnered with nonprofit entities, City of Lakes Community Land Trust, and Twin Cities Habitat for Ham Humanity to keep costs lower for homeowners.

Residents own their home, and the land trust retains the ownership of the land.

This way, the price is more affordable for both RECA and whoever buys it from her in the future.

Our second measure is youth workforce development.

Over 2,000 youth participated in workforce programs, gaining paid experience and experience and pathways to long-term careers.

Our two main programs are WIOA and StepUp, which bring together Minneapolis young people who face barriers to employment with local employers through work readiness training, uh internships, which all build to equitable access to careers and lead to a diverse, skilled and prepared workforce of the future.

The data on the screen depicts the 800 plus participants in the We Over We OA program over the past three years.

We see this partnership in action at Wild Flyer Wild Fire Cafe and A Vivo, a community-based service provider in our WIOA program.

Under this program, in school and out-of-school youth get help with employment training, education, and wraparound services.

People like Lee, who is pictured here, had left high school and was on house before participating in this program.

But during it, she has made she during the program, she made three goals to graduate from high school, to find a place to live, and to graduate from college.

Today, she is a high school graduate, she has a place to live, and she's well on her way to graduating from college.

CPUD supports moving on to development.

CPOD supports our next generation of emerging developers with a strong focus on my BIPOC entrepreneurs through our developer technical assistance program or DTAP.

We provide over 30 we provided over 1,300 hours of support and guidance through both training and one-on-one assistance.

Most of the people receiving these services are people of color.

People like Jennifer Korea of Amani Construction.

She shows mentorship and equitable access can close, which shows that mentorship and equitable access can close the racial wealth gap.

More than with more than 15 years in construction, she partnered with CPED about a decade ago through the Minneapolis Homes program to re home rehab homes in North Minneapolis.

Since then, her company has completed over 150 remodels and 18 new builds, creating both wealth and income for her company, but uh pathways to family families to create wealth through homeownership.

Today, Jennifer is one of our mentors in the emerging developer program and counsels new DTAP participants, sharing her experience with others on how to succeed.

We also have uh technical assistance for entrepreneurs.

CPED supports uh people to start sustain and grow businesses within the city through the BTAP program, the business technical advisor assistance program, where community-based organizations offer direct services for business planning, licensing, financing, marketing, and operations.

BTAP helps build a stronger, more inclusive local economy.

When last year we partnered, we provided over 6,000 hours of support to entrepreneurs with over 80 percent of those hours in service to BIPOC entrepreneurs.

Haley Utley and her partner Kayla Barth opened Queermunity in the heart of Uptown last year as a space for the LGBTQ plus community and allies to come together and create a connection in a safe, supportive environment.

They offer a range of educational, cultural, and arts program.

Queermunity fills a gap in in the twin cities for community space for LGBTQ plus people.

CPED supported this business through uh support for marketing and online presence through BTAP and a $75,000 uh 2% loan program uh loan uh so they could buy their renovate and buy their space.

The fifth measure I'll talk about is past technical assistance.

Uh technical assistance only goes so far for an entrepreneur, and a good idea is only a good idea if you don't have capital to execute it.

CPED provides funding to entrepreneurs to act on those ideas through the ownership on opportunity fund and the 2% loan program.

Each program provides capital to either purchase real estate or equipment for their businesses.

Since the since OOF or uh the ownership and opportunity fund began in 2020, we've helped 27 businesses with 13.6 million dollars to help them purchase their buildings.

And on the screen, you see our 2% loan program investments from the last year.

The city matches the private lender up to $75,000 for capital purchases, and in last year we invested $2.1 million to support 35 businesses in this program.

Opening a year ago, Adigo Wellness is a bypocket women-owned business, and it's offering services like yoga, acupuncture, and RICE in a community-based setting.

Adigo's vision is that their providers reflect the diversity of the people they serve.

Our 2% loan program helped the Adigo team purchase the building in Uptown, and the $75,000 loan supported the transformation of the new space to align with their vision, in addition to other supports we we provided through BTAP.

The final data point I'll bring up is uh permit values.

Permit values reflect a strong private investment, engage our private market activity and interest in the city.

While housing and economic development programs are measured in the millions, private market activity is measured in the billions.

An indicator of how much work is it is also an indicator of how much work is flowing through CPED as we handle the development process from development concept to grand opening.

This year we're on track for a 15th consecutive year of over a billion dollars of permit value.

As we are nearing that billion, we have issued 24,000 permits to date.

Groove Lofts was a lengthy, complex, innovative development that converted an office tower into a res residential uh in downtown.

Every CPED team played a role in this process, both assisting with the tax increment financing to support the private market, uh, private investments plus the historic tax credits and the development process around reducing red tape and moving it through the development process as quickly and swiftly as possible.

Today, Groove Lofts features 216 new homes, including 44 units that are affordable.

Let's move on to the CPED budget.

Now that you've seen our impact, we are recommending a 115.3 million dollar generally general funded budget for CPED in the coming year.

This budget includes $3.5 million in reductions and an additional $11.5 million of mostly non-gener funded additions.

The different color coded bars on this chart represent the budget by expense category over the past few years and the projected into 2026.

I'll explain the reductions for the year later in the presentation, but overall, CPED's about 37% of CPED's proposed proposed budget will go to contractual services, 25 to capital equipment, 23 to salary and wages, and fringes and operating costs are at 8 and 7 percent, respectively.

We break that budget down by our divisions.

In our five divisions, housing policy and development, economic policy and development and transfers and debt services each come in about 25% or a quarter of the budget, while development services operations and planning fill in that final uh quarter of our budget by division.

CPED currently has a vacancy rate of 7% with 18 open positions, and we are actively recruiting these open positions while also evaluating the vacancies to align staffing to the department's evolving needs.

Recruitment remains challenging in certain roles due to salary competitiveness.

Our directors are working with HR to address wage compression, exploring career laddering opportunities, and conducting a full review, a full market, full market review, competitive analysis of our unrepresented positions in 2026.

We're also working, we're also reviewing workflows for greater efficiencies.

These efforts will likely lead to some restructuring in the coming years.

The recommended 2026 budget reduces our FTE account from 243 to 238, with 191 of those general, those four those positions coming from the general fund, and 47 of those of those are in a special revenue fund.

And this is a little note for CPED.

Federal funding decisions are really important to CPED because of those FTEs, a part or all of about 67 of our positions have a federal source for funding.

I will next walk you through program changes recommendations.

First, I want to talk about our budgeting approach, give you a little context of how we made decisions.

Our budget aligns with our mission and our core values, our directors' core values of community impact, empowering staff, our agility, and being anti-racist.

It prioritized maintaining essential housing and economic development strategies and outcomes.

We look at staff development and operational resilience amid tighter resources.

Guiding our 2025 work plan and guided by our 2025 work plan and Minneapolis 2040 comp plan, CPED's budget strategy represents the best thinking our managers and directors have about how to deliver the best services, even though we're facing linear times.

The budget focuses on efficiency, equity, and long-term sustainability while continuing to invest in people and reduced disparities.

This is not a do more with less proposal.

It reflects a realistic trade-offs and our commitment to do as much as possible with the resources available.

Administrative and support is what we call uh operations and innovation.

It's a division run by Karuna Mahajanin, and they provide leadership around financial management, communications, data analysis analysis, and keep our department running effective or efficiently.

This team does a lot to keep all the work I've highlighted moving smoothly.

This team is the people behind the people who manages and support internal services, provides information for effective decision making, manage special projects and process improvements for effective coordination and service delivery.

The management of resources supporting and the management of resources supporting employee work.

The 12-member team has a $12 million budget and oversees CPED's communications finance, HR, and IT functions.

The increase you see on this slide is to accommodate the premium of the self-insurance budget, which increased by almost uh $5 million.

This area also drives our culture work.

We are committed to a department to be a as a department to be a workplace of inclusion and belonging where everybody can show up as their true selves.

We have we have been on we have we have help on this journey from the CPED leadership and our labor management committee and through our racial equity, inclusion, diversity, and equity or ride committees.

We see CPED coming together on this slide as at appreciation events, and being around each other is building stronger bonds and a more effective team.

Development services is led by Steve 4.

It's our largest division with 81 employees.

It includes construction code services and the development review teams.

It completes the development cycle that planning starts with plan review, permitting inspections, and issuing certificates of occupancies, plus a color couple other programs.

The division's budget is $12.7 million and shows a moderate increase from 2025 for cost of living.

The development services depart our division is responsible for ensuring quality built environmentally quality built environment throughout the city with a customer service first mission.

Development services ensures high quality development while requiring that buildings constructed, uh building construction and rehabilitation project in the city meet the standards for safety, livability, health, and environmental sensitivity.

Moving on to economic policy and development.

It's a division of 66 members in five teams and is led by Julie Lynham.

This division helps people build wealth through businesses, business activity in vibrant commercial districts.

It manages and redevelops commercial real estate holdings, prepares people for work, and manages over 5,000 business licenses.

The mayor's recommended budget of 26.2 million dollars is a drop of $7.4 million from 25, which I will explain later in the presentation.

This division has five teams a small business team, business development, business licensing, employment training, and the promise zone.

And they foster a healthy and sustainable, diverse Minneapolis economy, meeting the needs of BIPOC communities historically cut off from economic opportunity.

Results matter for this division, and BIPOC people account for more than 70% of participation in all their programs.

Housing policy and development team is led by our housing director, Alfred Port.

They have two main areas of focus.

Those are affordable housing rental and affordable housing ownership, and they create new and preserve the create new and preserve existing affordable rental and ownership housing.

We support low and moderate income households through education, down payment assistance, providing loans and grants to help existing homeowners, and through production.

The division includes 37 people across two teams, residential finance and residential and real estate development.

In 26, we are proposing eight recommended changes, which including reductions and additions that met out to be $8.5 million.

Since 2018, the city has significantly increased investment in housing and homelessness, uh, investing over $400 million during this period.

CPED continues to prioritize deeply affordable rental housing at 30% AMI, which is which equates to $39,700,000 in annual income for a family of four.

After revising the Affordable Housing Trust Fund scoring in 2024, 43% of our applications are meeting these targets, producing over eight times more deeply affordable homes than between the period of 2011 to 2017.

Minneapolis has one of the largest homeowner gaps in the country, and homeownership remains central to our goals.

In 2024, 103 households became homeowners through the city programs.

Since 2022, 123 have received critical home repairs, averaging about 47,000 a project, and about 70% of Minneapolis homes participants and over half of the developers in that program are BIPOC or women-led, advancing equitable access to housing and wealth building.

Our planning division is a division of 42 people led by our planning director Meg McMahon, and it supports residents and property owners to invest in the city, aligning with the 2040 plan and centered on equity and resilience.

They have five staff teams, including code development, community planning, land use, design and preservation, zoning administration, policy research, and outreach, or the PRO team.

They manage, review, and enforce land use, zoning, preservation, and environmental review applications, and the public process that go with them.

Planning is responsible for setting the vision for the city and is and starts the process to realize that vision.

In 2026, planning's budget increased about a million dollars in support of the base budget for NICLED programming and the start of the 2050 comprehensive planning process.

CPED continues to prioritize strategies that engage historically underrepresented communities while leading regulatory reform reforms tied to the 2040 Comprehensive Plan.

We're ensuring Minneapolis grows as an equitable and sustainable, inclusive and resilient city.

Debts and transfers is the exciting part of our budget that talks about program a program that is administered for specific CPED financial resources, both with external partners and between CPED funds.

This service is provided in partnership with our very capable development finance partners in the finance department.

And it's recommended to put $27.4 million into the 26 budget to support obligated funding tools like our TIFF districts.

I will now go over the reductions, the uh additions, and uh the changes to the 2026 base budget.

In 2026, CPED is proposing ongoing general fund targeted reductions, totaling just over $3.5 million, and a net decrease of two full-time equivalent positions.

These changes reflect the budget approach I shared a few minutes ago.

And let me walk through the key changes.

One, food and beverage operating costs.

This is a modest reduction of $7,500 to achieve, that we'll achieve through internal cost efficiencies.

Two, workforce, uh adult workforce tech hire program.

This is a half million dollar reduction.

This reflects uh changing labor dynamics and where the current program demand has declined to an oversupply of trained candidates in this technology in the technology fields.

Three, ownership and opportunity fund.

This is a half a million dollar reduction of the ongoing component, and I will talk about the one-time components in a second.

The program retains an existing balance and the additional one-time funding for 2026 and subsequent years will not be needed, and it's allowing it to continue to it will still allow it to continue to support business ownership and wealth building opportunities without uh that allocation.

And when we get to a point where we need more funding, we will ask for one-time appropriations.

Number four, budgeted position reductions.

These is about 210,000 in reductions from two positions.

These reductions were selected to minimize disruption to existing operations and play a part in the broader reorganization efforts to improve efficiency.

Number five is the East African Homeowner Education Program.

It's a $95,000 reduction, and we know we know that the participants can continue to access home buyer education and services through the broader Minneapolis Homes program.

Number six is a senior housing code abatement program.

This is an $810,000 reduction.

This service would then be consolidated into our existing Minneapolis homes rehabilitation activities so that seniors will still have continue to have the option opportunity to access support for property maintenance.

Number seven is emergency housing voucher program.

This reduction is 1.4 million dollars.

This reduction of 1.4 million dollars is effectively a shift to the stable home stable schools program, which we'll elaborate on the next slide.

This change is one of the most difficult for us to evaluate as we compare CPED's focus to and success on housing stability, ownership and production against the need for rental supports.

While the proposed move puts us into stable home stable schools, we acknowledge the scope of housing instability and needs for support are large in the city.

We also acknowledge that the source sources of funding from other levels of government like Hennepin County who continue to lead, there are other sources like other governments like Hennepin County who will continue to lead on direct cash-based housing assistance.

Uh next slide is about the additions.

Most of these additions are in uh special revenue funds that I will explain.

In addition to the reductions, we are looking at about 11.5 million dollars in general fund and special revenue sources, and that is uh breakdown this way.

Number one, stable home, stable schools as mentioned on the last slide.

The appropriation shift from emerging housing vouchers to this program will support over 260 families that are participating in the Minneapolis Public Schools that have about 770 children within their households.

This is a collaboration between the city, the school district, the Minneapolis Public Housing Authority, Hennepin County, my MCA of the North, the POLAD Family Foundation, and helps prevent prevent homelessness and keep students in their schools and communities.

Stable Home Stable Schools will experience a fiscal CLIF in quarter two of next year without additional funds.

And we provide it, which is information we provided to the city council in September about this program, and we have conducted briefings with about half of you.

Staff will be back in front of the city council in November with a separate action to move other funding to stabilize stable homes and stable schools.

Number two is Affordable Housing Trust Fund.

This is a one-time local affordable housing aid or LA allocation.

If you remember, that's a uh sales tax that comes for housing uses.

This allocation of $7.35 million will sustain city's most critical housing production tool in the trust fund.

The investment supports the creation and preservation of affordable housing rental and other dedicated funding sources such as TIFF set-asides, which have uh begin to decline.

Number three is Minneapolis Homes.

It's a one-time Laha allocation of just over a million dollars to continue to expand home ownership opportunities for first generation and low-income buyers.

Number four is the emergency shelter response.

This is another one-time Laha investment of a million dollars to provide support to the city's joint powers agreement with the Hennepin County that lead coordinated the lead coordinator of the coordinated entry system who administers all our outreach essential services, shelter operations, and rapid rehousing programs.

Number five is a one-time um use of the downtown assets fund in the amount of 240,000 for property maintenance at the coal center, which in which then will allow us to continue proper stewardship of this facility while we continue to work out an operating contract with the next operator Arts Nest.

Number six is the People's Way property management.

This is a one-time general fund addition of 100,000 to support the maintenance of the People's Way as the city continues through the community engagement in planning for its future.

And the final one on this slide is the development technical assistance program, and it's a one-time general fund investment of $350,000 to keep this impactful program uh moving.

I want to remind you of the approved base budget items for 2026.

I'll go through that.

It's about $4.32 million in investments in housing, economic development, workforce training.

Um as I said, we are proposing cutting the ongoing appropriation for ownership and opportunity fund as we have a $2 million one-time allocation in 26, and that should get us to the next budget cycle and um through the process.

Number two is an ongoing allocation of $850,000 to support small business growth in the uh business district support program and the facade program under Great Streets.

Number three is a youth workforce program, ongoing investments of just over half a million dollars to continue support for our youth employment pathways, uh, ones that I've just described.

Uh number four is the start of the 2050 comp planning process, a $300,000 investment into that plan so that we can ensure that we'll have the plan written and approved and in place by January 1, 2030, which is just around the corner.

Number five is the business technical assistance program.

This is an ongoing investment of 200,000 to continue that program.

And number six is Nickelette programming.

It's an ongoing allocation of 400,000 to provide resources and programming for activation and management of Nickelet Mall to help maintain its role as a vibrant and welcoming public space in the heart of downtown.

Now, I've come to the end of this presentation.

I want to thank you again for the time and the division directors in the audience today.

Um I also want to particularly share uh thanks to Sue Kleppy, our budget analyst, John Giridino and Manny Vinevong, who are our accountants.

I want to thank Ben Zimmerman, Justin Carlson, Justin Coles, and Director DeCenza on the budget team for guiding us through this.

Angie Skildham and her entire team at the Development Finance Group, West Durham, Sarah Milner, Dorothea Marty, and Jen Roulong Smith in our pro and comms groups that put extra effort into making sure that this presentation was as great as it as I think it was.

And on behalf of the people of CPED, thank you, Madam Chair and Committee members for this opportunity to present our recommended budget, and we are happy to answer any questions you might have.

Director Hansen, thank you for um for your robust uh presentation.

Um I will first note that we have been joined in this committee by council members Wansley Jenkins and Council President Payton.

I don't think I missed anybody, right?

Um, he was here at the beginning.

Uh with that, I am going to see if my colleagues have any questions or comments.

I'll first recognize Councilmember Rainville, followed by Councilmember Wandsley.

Thank you, Chair.

Uh thank you, Director Hansen, and uh to all your staff that's here today, but I just want to let you know I really enjoy working with all your staff.

They return my calls.

Uh they're available for meetings.

They go out into community with me.

So that's very important to me, and I appreciate that.

I I do have one question.

You mentioned uh the Affordable Housing Trust was gonna get a seven million dollar increase from you call it a special tax.

Is that that new statewide tax or state imposed tax?

Yeah.

Um Madam Chair, Councilmember Rainfield, yes, yes, sir.

That's the local sales tax that we can use for housing uses.

Great.

Thank you.

That's it.

Thank you.

We've actually got a couple more folks in queue.

So next I'll recognize council member um Wandsley, followed by Councilmember Vita.

Thank you, Vice President Chektai, just starting at the top, um, around slide 1415, um, where it gets into DTAP and small business support.

Uh could you provide an update on the pilot for loans for small businesses impacted by construction?

Um it wasn't clear where the funding was located within CPED for that specific pilot.

Uh Madam Chair, uh Councilmember Wandsley, uh, that is a new program that we have not written.

I was hopeful, and I'm glad that you put it right out up front so we can talk about it right away.

I was hopeful to have an update on all of the new things that were added to the 2025 budget, because some of them are completed and underway and some of them aren't.

And that is one of the programs that we have not um written yet.

And so I will be we'll be collecting a status update on all 2025 budget allocations so that the we can share with the council what it just wasn't ready today.

But that one has not started yet.

Would that be shared through the Biz Committee then in the last cycle that we have going before the new year?

Um Madam Chair, Councilmember Wandsley, we can we we could have it at I I think the best way is probably just me sending an email with all of the updates of those programs.

Okay, because in I'll get to this.

It sounds like that will require a program design, which in our conversations does have to come through for council authorized authorization.

That's why I said would it then just be coming to the next phase, too?

Madam Chair, Councilmember Wandsley, I I think I understand.

Misunderstood your question.

So, yes, when we have that program, that program would have to go to the council to approve it before we could administer um funding anything.

Okay, and right now is the timeline to get that figure out before the end of the year.

We're still working on that timeline.

Okay.

And then going to which I think is tied to some of the just like outstanding things.

Um, is there uh tracking of funding allocations given to the cultural corridors?

Um it would be great to know just in our budget, kind of where the funding is standing for our cultural corridors, like on average what is spent in supporting um business interests, residents within them, uh, because we've had a long-standing conversation around how we need to, of course, balance investments, not only in downtown, but also these other key areas of our city.

Yeah.

Uh Madam Chair, Councilmember Wandsley, uh the funding from the city for cultural corridors is in multiple departments.

But it does make sense to have us work with those other departments to report back on on what's available.

A lot of the programs are in our arts and cultural affairs departments, which they have um reported back through the Biz Committee a number of times on on their progress because they're getting that money out in the field and making um great headway.

Uh there are some programs, most of the programs that CPED offers, cultural districts are an eligible area.

Uh we have uh very rare rare occasion where it's specific to just cultural districts.

Um but I can talk to DCO Jelly and uh talk about a um uh collaborative uh response on cultural districts in general.

Yep, I'll note that for the clerks and a follow-up memo.

Yep.

And again, uh figure amount of what what do those programs initiatives represent financially.

Great.

And then going to slide 30.

Councilmember Wandsley, if I can just interrupt, I want to make sure our clerks got that.

Um administrative follow-up that outlines all of the um ways in which the city across the enterprise um funds cultural district.

Cultural corridors, cultural corridor work um and and just some specifics on on those financials as well.

Is that accurate?

Excellent.

Sorry, I'm sorry to interrupt.

Go ahead, continue.

Then going to slide 37, where we're talking about reductions and additions.

So in the senior abatement program.

So I recall CPEG giving an updated presentation on this initiative that council brought forward last budget cycle.

Um the presentation noted that it was pretty successful in supporting or meeting the goal of this program.

And from my understanding, not only was the fund almost fully spent, um, CPET also shared that since costs have ridden, um, the impact of these loans have also uh lessened and essentially more resources would be needed.

Um so it actually signaled to me that this could have been an opportunity to bring more resources into it.

But as you just highlighted in your presentation in the performance book, um, that you all believe that Minneapolis homes is the place where it it could absorb the same type of needs for seniors who use this service.

So uh just for timing, our in a follow-up memo will like to have data on the number of seniors providing or provided abatement or stabilization, housing stabilization services uh via Minneapolis homes, specifically for 2024, 2023, and 2022 when there was no dedicated funding.

I can also uh email this question over to for our clerks.

Uh Councilmember uh Chuck Tye and Councilmember Wandsley.

Um that's one of those programs where it's it's the we have unfortunately some trade-offs.

And when we were meeting our budget targets, we had to look at where we could be efficient.

And when there was another resource, well, while we know we'll have fewer dollars for rehab, there were other resources available, and that's the reason why you see that recommendation.

And yes, we can get you the information on on seniors served through both those programs.

Oh, I think we already have it for senior abatement, just Minneapolis homes.

Yep.

Yep.

And then uh going to slide 38 again with the emergency housing shelter.

Um I wanted to get clarity on how CPED was envisioning how to spend um this recommended appropriation.

For example, will this pot of money be divvied out to shelters that you're currently partnership with the county on, or will there be an RFP process for organization to come in and bid for that one million?

So just one more clarity around that.

Madam Chair, Councilmember Wandsley, on your question about um the JPA, the joint powers agreement we have with Hannapin County, that's where we would we would uh allocate the money to.

Okay.

And I'm gonna I'm gonna make a churn to my housing director about a potential question to answer about the RFP.

Good morning, everyone.

Elfric Port, Housing Director of CPED.

Um, through the Chair Um Um Councilmember Wandsley, the the dollars will be contracted through a um joint powers agreement with um Um Hennepin County in collaboration with Hennepin County, it is my understanding that with a one million dollar award, they're envisioning that this these resources will support the extension of um winter warming shelter beds through 2026, and we're anticipating about 150 beds um will be available during that time period.

How they are going to identify the selection of those um shelters um it would follow their their process and we'll engage with them in that in that in that vein.

Okay.

So again, this is just going directly to the counting through that joint powers agreement, not an RFP process on our side.

Okay.

That is correct.

And I would add that like the previous conversation around um program design, we will come back to the BIS committee with the um program guidelines and the um authorization to seek uh the contracting with the with the with the county on the JPA.

Okay.

Great.

And then going to stable homes, stable schools.

Um I you already noted about half of my colleagues have received briefings on this.

Um I'm one of the colleagues who did.

Um, so I do have a couple of follow-up questions just for the um public record.

I believe we've already, or my office shared this with you, but of course, we've received a number of questions from the public um regarding the description of this uh change item on the budget book, specifically asking how my or sorry, asking my office how stable homes, stable schools serves the same populations as individuals who would be eligible for the emergency housing vouchers um program.

So I just want clarification.

Stable homes, stable schools is only available for families who are in Minneapolis public schools.

That's correct.

Madam Chair, um Councilmember Wansley.

Stable Home Stable Schools is available to about 95 percent of the elementary of families that have elementary students in the Minneapolis public school system.

So families who have children in the Minneapolis public school system.

And in the at the elementary level.

At the elementary level.

So in that case, and also the spirit of the governance and transparency, again, we've asked if you could reflect this impact or around the changing of cutting EHV to route that dollar amount to stable home stable schools to show that the impact would be 150 unsheltered individuals.

It's not the same population that is served by stable home stable schools.

Madam Chair, Councilmember Wandsley, uh it's safe to assume that majority of the people that would be on the emergency housing vouchers would not um would not be eligible for stable home stable schools because Hennepin County has a um uh they anybody with kids that are homeless homeless get housed immediately.

Correct.

So that's why I'm asking once again if that could be changed on the budget book because there is somewhat a flattening out of both of those programs, and just to provide clarity, they serve very distinct populations.

Okay.

I'll take a look at what it says.

And we'll share some recommended language.

Okay.

Uh Director Hansen also uh you share with the council over uh email update um that there is a around a $3.2 million fiscal cliff uh for stable home stable schools.

Um when the Fry administration expanded this program back in 2023, I believe you all were aware that there was going to be a need for ongoing dollars to sustain this program.

I'm curious to know what were your plans for long-term stability of this program since my amendment was just passed, and I'm talking about emergency housing vouchers.

That just got approved in December.

So I imagine prior to that even being on the table, let's say in the world where we did not bring that forward, you had considered other options to fill that gap and would like to know what those other proposals you all were looking at.

Uh Chair Chugtai, Councilmember Wandsley, yes, this is this is another, as I said in my remarks, this is one of the other challenging parts because we know that there's need exceeds um the resources that we have.

Uh at this, at the budget markup last year, we had a we had a conversation back and forth about um uh stable home stable schools, where I was I I think unsatisfactorily in answering your questions about the pending fiscal cliff.

Um we have we did not know about the timing of that exactly when we did the last year's budget.

We have since learned it's quarter two of 26 um uh through our analysis this summer.

The partners have been working on fundraising, but as taken a little little bit of time to um ramp up, and we are working on a full budgeting because the component you see from from this from the city staff is about um long-range uh affordable housing uh vouchers and not the short run program.

And we have been asked by an a few council members what the full budgeting is.

So even in the email that I sent to you in September that talks about that where you get the $3.2 million that's on the on the city's the city funded side.

We have gotten some information late this week.

We are aggregating that into something that is understandable for for most people, and we will be getting that out to find out who is also funded, because we have to have that question.

Who is in on stable home stable schools within the partnership?

Because the City of Minneapolis is one of the biggest funders of the program, and so at some point in time, we need we'll see if there's opportunities for others to step up.

And so that an analysis was ongoing, and then it kind of hit us.

So it's it's not an advent advantageous position to be in, and we're just trying to be as transparent as we can.

And just going back to the timing, can you share a bit more around when did you all learn of the approximate budget shortfall?

It sounds like you didn't have that information by December of last year, so when did that come about?

Okay.

Uh Councilmember Chuck Ty, Councilmember Wandsley have been polled for my apt um housing director.

Through the chair, Councilmember Wandsley, um the stable home stable schools program had an expansion, believe in 2023.

And 2024 was the first full year of the implementation of that expansion.

In January of this year, we received the last invoicing from um Minneapolis Public Housing Authority.

That invoice positioned us to understand what the total cost of this expansion would be.

So we knew that there would have been a fiscal CLIF.

We did not know at what point that fiscal CLIF was going to hit.

So when when when we presented in this, I mean the budget last year, we weren't in a position to say that a fiscal cliff would have hit in mid-year 2026.

We still had some reserves in the stable home stable schools budget, and we were comfortable that it would support our program operations in 2025, therefore allowing us to have these conversations for the 2026 budget.

So we knew that there was going to be a fiscal cliff.

With the expansion, we did not know what that number was after the after we were able to evaluate those numbers based on the results from the invoices that we received from Minneapolis Public Housing Authority, we're now positioned to understand that the fiscal CLIF is going to hit around mid-year of 2026.

And I should add that there are ongoing conversations with the collaborates or with the with the other members about trying to identify a strategy to ensure that this program is sustainable.

And again, just with timeline timelining of things with the reserves question where you share you felt pretty confident that that could cover 2025.

I am trying to recall in the email that you sent, you all had to pause referrals this summer, correct?

Yes, we're pausing referrals this summer because where we to add new families those the resources in 2026, if they weren't, if we weren't able to cover that, then we will be putting those in new families in in a position where they may not, we may not be able to follow up with our commitment.

So that was the decision that was made to cause the pause.

So the reserves that were, I don't know how much you were intending for 2025, it seemed it did not take into account that a need to pause mid-year then.

The the reserve the reserves were sufficient enough to carry us through 2025.

We even even as we stand today, there is about $300,000 that's going to be thereabouts that's going to be available that could go towards supporting the 2026 efforts, but even with that, um there is still the resources coming in and the expenses are not matching.

And that's and maybe it's the framework of the question.

So the reserves had you not pause the referrals of bringing on new families.

Would the reserves cover all of 2025?

Yes.

Okay.

So you what was the point of pausing once again?

If if we if we have it sufficient resources to go through 2025, were we to add one new family or five new families, the commitment is for four years.

So if those additional families were added, come 2026, we would not have sufficient resources or 2027 to continue to support those families and and would put us in a in a position where that commitment wouldn't be, we wouldn't be able to live up to that commitment.

So that the decision was made by all of the members of the collaboration to pause.

And so the reserves is to support basically the existing families.

And right now the proposal for EHV is to just support existing families, not bring on new.

The proposal, the the proposal that we presented to the members that that um accepted our invitation to provide a briefing showed that we have there were three scenarios.

One of the scenarios talked about continued the program operations as is.

The second talked about pausing um not taking any new referrals, and then the third was taking new referrals as uh as um families drop off, we would take um we will bring on new families.

I think the option that you are referencing is the third option where we're saying as families drop off, we'll then add new families to the program.

So I want to shift uh coming back to this.

Um I did want to get an update on council move the 1.8 million dollars to be dispersed for emergency housing vouchers for 2025.

Is there still a plan to disperse those funds um to MPHA as council approved or bring forward a different proposal for council to consider?

So the proposal that's before uh that that we're bringing forth is to reallocate the 1.4, I mean the 1.8 million dollars from 2025 to support the um stable home stable schools core program.

And the mayor's recommendation, the mayor's recommendation for 2026 takes the 1.4 million dollars of the emergency housing vouchers to support um stable homestable schools.

There is still a gap in um um stable homes stable schools moving forward.

So our intention is to use the 1.8 um as well as the stable homes stable schools pilot to fill that gap.

The rationale for um going down the path of using recommending the use of the 1.8 is if the 1.4 is not available in 2026, and we use the 1.8 and brought in families come 2026 or the following year when the when those when the 1.8 resources have been depleted, there wouldn't be any resources to support those families ongoing.

So we believe that if we were to put families in a position where they are now housed, a year from now, we'll be on able to continue to meet the obligations as the program was intended.

So we have this part of the recommendation is to redirect um the 1.8 million dollars to support the core of Minneapolis.

I mean stable home stable schools program.

So just to summarize that the council's appropriation for 2025 will not be enacted by CPED.

Instead, you all are talking about using our appropriation that was passed by this body to redirect it in 2026 and basically not implement emergency housing vouchers for this year.

That is the recommendation then.

Great.

I'll shift to comments.

Um I really just want to end this by addressing my colleagues.

One, I want to be fully clear that I plan to bring a amendment to restore their emergency housing vouchers because our city's current approach to unsheltered homelessness is absolutely failing and it's not working.

Um there is no need to re-invent the will here, and there is a housing first approach that is before us through the emergency housing voucher program that has demonstrated tremendous success.

Um and we also are seeing the city's approach towards just doing encampment sweeps after another, just moves people from one place to another spot and exasperates trauma for our already vulnerable community.

Um we worked very closely with NPHA and our county partners who are already severely overburdened and under-resourced themselves, especially in light of the the federal funding cuts that we know all of us are feeling, and I'm pretty sure as the leaders of tackling a lot of our homelessness issues, um, they're going to rely on our part or these partnerships with us.

But it is deeply troubling, as we just heard, that when we do forge these partnerships, then we have the administration being the Fry Administration that then will go and undermine our work.

And that is specifically playing out in this case, where two programs that are meant to reduce homelessness, one amongst MPS families and students, and those experiencing unsheltered homelessness, they're essentially being pitted against each other, and that's not acceptable.

Um, emergency housing vouchers again is an incredibly important program that can support our work of addressing homelessness, reducing it, and meeting this body's resolution around declaring unsheltered homelessness as a public health emergency.

Um they are, and by they are counting up a partners, our public housing authority partners, they are actually using this as a model um to go across the country that are being praised as an effective model towards reducing homelessness.

And many cities are looking to mimic this, and we have the ability to implement it right here in our own backyard, and it's just troubling that we can't even do that.

Um under this particular administration.

So I again just want to emphasize like I I have no desire to be acting like we're in a scarcity mindset when it comes to homelessness.

We have the ability to be forward thinking to appropriate the resources that could reduce homelessness in our city by 20 percent by the county own um accounts through implementing emergency housing vouchers, and that's exactly why I look forward to working with my colleagues to restore that funding.

Um while also maintaining and complementing, yes, we want to make sure that MPS students are not facing housing insecurity.

Um it's just really deeply disappointing that this is the option after two years and three years of knowing that stable home stable schools was not going to be in a financially sound position, that this is the only solution that was brought forward.

Um I really want to say thank you to my colleagues who have approached this area this issue with a level of seriousness that we have not seen from the administration, and I look forward to working with you all who are um interested in using this budget cycle to build on our commitment to our doing this meaningfully.

Um but yeah, again, deeply disappointed.

Thank you for presenting the information to the public and as opposed to just keeping it in private meetings through the briefings, but I will defer to the rest of my colleagues who are in queue.

Thank you.

Next, I'm gonna recognize Councilmember Chowdhury, followed by Councilmember Palmisano.

Director, there's about four more people left in Q.

Go ahead.

Thank you, Council Vice President Chug Tai.

Um thank you, Director Hansen, for your presentation.

Sorry, I'm struggling with my mic here.

It's like a mile away from me.

Okay.

Um, yeah, really appreciate just presenting on like the work of CPED.

It's a very, very highly active department that gets a lot of stuff done, and it's been a privilege to serve on the business housing and zoning committee to kind of see the work in person and have appreciated all of the leaders that you have on your team that have shepherded shepherded us through this last year.

Um I will just kind of jump into some of my questions right away.

So I had some questions about the um shelter funding that Laha is being used for.

I just kind of wanted to get an understanding on how did we land at 1 million of that funding going there?

Why is one million the number Chair Chowdhury and Chug Tai and Councilmember Chowdhury names are too close together.

Um I'm gonna defer to the housing director here.

Good morning.

Um through the chair, um councilmember Chowdhury, the one million dollar um number was um arrived at um through conversations with um the our colleagues at Hennepin County.

There is um the county released a request for proposals um early on um and the resources that they had um was not sufficient to cover the needs that were met.

I mean uh um the the needs.

So as a result of that, um the they believe that where we to where where they're to be provided a million dollars, those resources could be used to support the efforts through um um creating new beds or available extending the availability of of beds um through 2026.

So that's the rationale for that was the basis for the million dollars.

But as we all talked year today, um the homelessness issue is front and center to the work that we do.

Um one million dollars, ten million dollars, fifty million dollars, the resources are needed from the city, the state, the county, and the feds and philanthropy.

But that's how the million dollars was derived.

Thank you.

And uh, Director Port, you might these next few questions may also be for you because it is housing related for the affordable housing trust fund, um, that seven million and some, that's all coming from Laha, or is that the total amount for the Affordable Housing Trust Fund this year?

The total amount um through through the chair, Councilmember Chowdhury, the total amount of um the affordable housing trust fund the recommendation is 17 17 million dollars.

The $7 million thereabouts that that's being referenced is a combination of the sales tax, which is about $3.3.8 uh million dollars, and um $3.5 million of um TIFF resources.

Last year we had $4.5 million in TIFF that supported that EFR.

This year we have $3.5 million more.

So the combination of the TIFF resources and the sales tax revenue is what comprises the seven plus million dollars.

Okay.

But the total um budget for the trust fund is going to be $17 million for 2026, or what we're recommending.

Got it.

And then how much of the Affordable Housing Trust Fund this last year, financial year, did we spend as a city?

Through the Chair, Councilmember Shawry, the the um 2026 2025 awards have not yet been brought forward.

Staff is finalizing the reports with a recommendation to Biz sometime in November.

Okay.

Do you remember how much it was for the year of 2024?

2024 was 17.5 million dollars.

Um and I believe we have allocated all if not most of them.

Um the the plan the plan um is during the course of the year, excuse me, projects that may need some additional dollars could come through a pipeline process outside of the RFP process, and those resources would be used to support that effort.

Okay, great.

I'm gonna I'm gonna follow up with some more questions to you over email just directly about affordable housing trust fund, just going back to the Laha for shelter.

That $1 million, is that going to be used for shelter operation funding through the county?

So the actual operational dollars?

They the through the through through the chair, Councilmember Chowdhury, the the resources are being used um to help with additional um making additional beds available, especially during the um winter um season.

So those those um cold wet weather days where there the those shelters will extend their hours, the purpose of that would be to make um those beds available for for families.

Um kind of understand how the process goes from the city putting in one million dollars and what the county process will look like.

I heard you mentioned an RFP.

Through the chair, Councilmember Chowdhury as is customary with all um joint powers agreements with the county, um, we enter into that relationship talking about outcomes, and we um transfer those resources to the county, and the county implements their process um for this election.

I'm almost certain that um for resources such as these, they go through a rigorous request for proposals process.

So I uh I'm gonna defer to them on the approach that will be employed.

At this point, we have not gotten the details on the formulation of that.

The approach that will be employed is once we've once this um um million dollars is approved, or if this million dollars is approved, we'll continue to engage with them and talk about the process, and when we bring the fort bring forward the recommendation, those details will be included in there.

Okay.

Thank you.

I appreciate it.

I'm gonna just kindly maybe request um that us as a city work with the county to maybe get a better understanding of how they're planning on using the one million dollars because it is a significant amount of our Laha contribution, and I feel a little bit uncomfortable, kind of not understanding what their plan process is and how it plays into the larger picture of what they're planning on doing, especially with the $13 million fiscal cliff, and then also just the the cascading amount of fiscal cliffs a lot of the um nonprofit service providers that do shelter in the county are facing.

Um I also want to kind of understand like how they landed on one million on their end and what they're putting together.

So if there's a way to get a memo from them so they can kind of articulate more to the city what the process looks like after we hand them a million of our Laha.

Sure.

Thanks.

Great, thank you so much.

Um my last question I believe is gonna be for Director Hanson.

I I also kind of wanted to swing back around and talk about the budget allocation that was made last year by me and Council Vice President Chug Tai on the hardship forgivable loan found funding for businesses on construction.

So I hear from you that it has not been written yet.

Could you kind of walk us through on the why and like what processes CPED has been going through?

Because would love to see this funding go out for me personally.

I know a part of it was allocated towards Lake Street, and I know Hennepin, of course, but on Lake Street in specific, I represent a part of Lake Street, the furthest eastern portion of it that over the last five years has never gotten PPP funding, has never gotten, did not get the Lake Street lift funding.

There is maybe like one type of support funding that some of the businesses got, and their number one thing is debt and loss of revenue from the beeline construction and a few businesses specifically for that amount of debt that they were never able to close have had to shut their doors.

Especially like a beloved like coffee shop like milkweed coffee, like that was a part of their reasoning.

Chair Chugtai, Councilmember Chaudry.

There you go.

Got it.

Nailed it.

Yeah.

So the way we look at these programs is this it was at especially things that are added to during the markup process is we kind of put them into a queue.

The $900,000 program is a very extensive program because we're talking about loans, forgivable loans or or or payable loans.

We haven't figured that out yet, of uh two businesses for losses due to something else.

So we saw this in the central corridor, the green line construction.

There was a set aside from philanthropy for businesses, and it required um, and we also did this um early in the in the um pandemic where we we set aside our two percent loan program for direct uh grants to businesses at a five and a ten thousand dollar uh rate.

We had um it required a program like that requires a lot of of underwriting to make sure that we're we're meeting the public purpose test because we're constricted on what money we can put into uh uh you know uh private non-business, and we want to make sure that we have the proper um oversight, because this is something where you'd have to like to sit down with the business and figure out was the loss in the business attributed to the construction?

And it's more complicated because we're looking at Lake Street, Hennepin Avenue, and Lowry.

Um not all of those projects were Minneapolis funded construction projects, as you said.

It's the B lines, it's Metro Transit construction on Hennepin or on Lake Street, ours is on Hennepin, and then it's the it's a county project up on Lowry.

And so it takes a will a little while.

And so we we were working through the list of things to do from the 2025 budget.

We just haven't resourced the writing of that um we've done some preliminary analysis, but we just haven't resourced writing that program yet.

And I know it takes a while.

I like to tell the council new programs take about six to nine months, and I appreciate we're in the tenth month of the year.

Uh this one's taken a little bit longer because of the volume of things that we have.

And then I want to make a shameless plug that those businesses on Lake Street are eligible for the two percent loan program and the ownership and opportunity fund.

If PPP and all those other programs that were with from other organizations, they can get resources from us.

In fact, I do believe we have an ownership and opportunity fund award on that east part of Lake Street, but that's also available if people are watching and wondering if there are resources available, but today those two programs are open.

Okay.

Yeah, I think especially if there is any budget amendment amendments this year.

One thing that would be helpful for me is just some proactive communication about what's going on as an author.

I'm kind of just like wondering, and I know we've had a couple of check-ins here and there, but knowing what's going on before we get to budget is is really helpful.

Um I mean, I would love to, I would love to get a better understanding of what the future timeline is gonna be to get a program like this lifted.

Um I appreciate Councilmember Wandsley um sharing that it would be nice to have uh discussion about it before the end of the year.

And I know that there is a that list from 2025.

My personal preference is I think since we are already at the at the point of like looking into our next budget year and making decisions about our priorities for next year, um, and then also closing out this calendar year as a council that we do end up talking about it in biz over email, maybe even both.

I think a little bit more communication on that would be really helpful.

Um I won't I won't have you uh answer this on the dais today, but I am curious about um understanding which programs including pilots have been implemented or like what point they're in.

And also just like kind of understanding from your perspective as a department and the people who have to do the work, like what are the what are the reoccurring barriers if it is staff capacity or if it's these larger priorities that take more time.

I think as council members, we don't get into the weeds of the work of CPED.

You guys are always in it and always doing it, and I see that very clearly, and so it is helpful for us to kind of know like this is kind of the culture and tenor of the department, and it shifts, especially when there are different compounding things that are going on, especially like federal funding being at risk.

So that'd be really helpful.

Um that's all my questions for now.

Thank you so much, Director.

Thank you.

Next, I'll recognize Councilmember Palmasano, followed by Council President Payne.

Thank you for this presentation.

Um before I begin, I want to say thank you to your department for helping me navigate a really difficult situation earlier this year when a water main pipe broke at 50th and Penn and flooded a small commercial node.

Um development services, the small business team, yes, partnering with public works, but others offered on the ground presence, comfort advice.

You were showing up to help me and the property owner, the business owners, the apartment owners or the apartment residents, everybody jumped in into a serious emergency, frankly, and helped me navigate a complex process.

So I just want to thank your team for their dedicated work.

Um, I can see you had some tough decisions regarding your recommendations for reductions in your budget and um per the spotlights on residents and business owners.

Congratulations.

You deal with some highly technical and complicated funding arrangements and you leverage them all for the best outcome.

And like Councilmember Chowdhury said, I think some of the funding streams might uh be shifting or in jeopardy.

And yet you change the lives and generational opportunities for our residents, and that's um what we want you to do.

Um a lot of your work is actually done behind the scenes, and we don't see that until something comes before us at council.

But your outward-facing um employees and development services work directly with our residents.

Those jobs aren't easy, but they really ensure the safety and livability of our housing stock.

Um I'd actually like to commend you for making tough choices on the reduction and uh elimination of some programs.

It's not easy, but it's exactly what we asked staff to do.

Um identify programs that were underutilized, underperforming duplicative or could be serviced by other kinds of programming.

Um course we'd like to keep everything, but reductions like this are gonna allow us to lessen the property tax burden and still provide the needed services for our residents.

So I was pleased to see that.

From my perspective, it's a little scary to move the ownership opportunity fund to all one-time funding.

Um, but it's already funded for 2026, and I have faith in us as a body overseeing the budget that will meet your needs.

Um can you give us a sense of where are you at with funding right now?

Like, do you have a surplus or a deficit?

Do you do you feel like you have the resources to meet expected demand in the ownership opportunity funds?

Uh Chair Chugtai, Councilmember Palmasano, um you're welcome for responding.

That's the picture of the business that is impacted.

I also want to um thank the public works department and police department.

It was a collaborative effort to make sure we addressed um the risks in the uh the emergency.

And on your question about um ownership and opportunity fund, yeah, it was a tough choice.

It was a tough choice.

That is an ongoing revenue source for that program.

Um we're very uh we're very uh detailed about how we make decisions.

So we're making good choices about using this public fund for a program that most cities don't use.

They don't have a equity building non-uh uh a forgivable loan program with no payments, and so we realize how important it is to make really sound choices.

Um the uh I have to give I'll have to give you the the balance of I I thought I have them in my notes, but I have to get it get you the balance of that fund.

But we think with the two million dollar allocation that's already in the approved 26 budget, we will be able to get down the road and still be able to service the people that come through the pipeline uh as effectively as we have done since we started this program in 2020, and then it will be a conversation you know through the mayor's budget process probably for the next biennium.

Okay.

Thank you.

Um if you don't mind, council member, can I just quick interrupt to make sure our clerks grab that as as follow-up to get the body um the balance of the opportunity?

It will give you a full breakdown.

I got a chart.

A question about the FTE reduction in the development review team.

Um can you tell us how you expect that's gonna impact service to residents?

Uh Councilmember Pomson, can you repeat your question?

I'm yeah, I think there is a reduction, small one in the development review team in terms of FTE counts.

And so I'm just curious how you think that's gonna impact um residences or residents that are seeking development review, because sometimes we I think we all probably get um people trying to stoke the process further along and they're finding barriers.

Some of them are their own.

We're waiting for something from the applicant, but um I don't see your development review team sitting around waiting for the next project.

So uh Chair Chuck Ty, Councilmember Palmasano, um I do appreciate also the kind words about the development services division.

I will say they are the consummate professionals, either through our MDR team, which is you know the face, the public customer face coming into the door, um, our plan review team that is making sure all of those things are all the all the plans are drawn so that building when you build it doesn't fall over, and then our construction code services that make sure that you built what you built.

And um every time I'm um in front of them or around them, I'm amazed by not only the understanding they have of their trade and their craft, but about the city in general.

I always learn something more about the city because they're out there all the time.

Uh with respect to this loss, uh we have to be more efficient about using you know getting those things through.

That's I mentioned that we are doing um uh process and uh evaluation of our processes across the departments.

And every time as we look at that, we're we're in a we're in a little bit of a lull in production.

So I talked about the tens of thousands of business permits.

I think it's like 27,000 um so far this year.

Last year we had 44.

So we're a little bit low because we're in a mark, we're a downward market trend.

We're still getting the value in those permits, but we're not getting the volume of permits.

But we as a department and uh our through the directors team is looking at every single um FTE vacancy, and is it worth putting into that position that was vacant or is it a place in summary?

So it's gonna be evolving while we've identified that.

If we're seeing some things um push on that team and slowing down our level of service, that's the thing I'm trying to do.

I talked about this last year is we need to get better understanding of our levels of service with reductions in staff.

That process is underway.

We should hopefully have that in the coming year.

Um and that's you know, if if we see pushes, then can we pull resources from other teams and and find out where we find efficiency?

So it's it's it is it is more art than science right now about how much of an impact.

But uh the good thing about it is we have a great director in that department that whenever you call me, I call him and he calls you and he gets it all done.

So we've got that for now.

Um but we can't survive on having that extra um that extra effort by Steve all the time.

Yeah.

Um I'll end by just recognizing that you're actually receiving some additional funding this year, which is an outlier compared to other departments, and those additions mostly focus on deeply affordable housing, um, stabilizing housing, responding to homelessness, and economic opportunity development.

I think those are all laudable goals and that they are needed in our city.

Um we can't fund these initiatives on our own, but we can help.

Yeah.

Um we really need to be working it with Hennepin County on housing issues and mapping out how we don't how not to duplicate funding um for long-term success.

So um I appreciate your job.

It's not easy, and thank you for this presentation.

Thank you.

Thank you.

Next, I'll recognize Council President Payne.

Thank you, Vice President Chucktai.

Thank you for the presentation.

I I wanted to uh maybe get some clarifying questions building off of uh some of Councilmember Chowgy's questions about the Affordable Housing Trust Fund.

Uh you mentioned 3.5 million of that new money is coming from Laha for the 7.3, the remainder of that being TIFF.

Uh could you just clarify what was the total Laha distribution that we were anticipating and then maybe what the breakdown of where that's going.

So 3.5 going to affordable housing trust fund, but I don't have a clear map on where the remainder goes.

Chair Chugtai, Council President Payne, I'm gonna defer to Alfred on this one.

Do you want to put this up?

Yeah.

Through the chair.

President Payne, the when the when the when the um Laha was approved.

There was 300 and 3,000 $3.2 million, $3.3 million that we received in 2024.

But the intent was the decision that was made um at the time was we would use those resources as part of the budget process um for 2024.

So that 3.3 million dollars coupled with what we are anticipating in 2025 of $8.6 million gets us to about 11.8 million dollars.

What we are doing is using about six million dollars of that in this um budget um um recommendation, and it's made up of $3.5 million to the trust fund, 1.3 million dollars to Minneapolis homes, one I'm sorry, um the 2026, so I'm looking at the 2025.

In 2026, um it's 3.85 million dollars to the trust fund, a little over a million dollars to Minneapolis homes, and 1 million dollars to um the sh um shelter um um response for a total of 528 million dollars.

The goal then would be um what we receive this year would go to support the next year's um budget.

So that's the that's the frame um that we're we're um projecting.

So the total distribution or anticipation anticipating in 2025 is 8.6.

That is that is correct.

And what's the um distribution timeline of that?

So we are we are um if I'm uh through through through the chair um council council president um Payne.

Are you asking what's the time frame that we have to spend the dollars or what's the no when when does the when does the uh wired transfer go through?

I'm gonna look at our colleagues at the budget office.

We can follow up with you.

And well, and then subsequently it I just want to make sure I'm understanding this correctly.

When we are getting a distribution in 2025, we are actually using that to plan for 2026.

So is there like a time lag or am I not understanding that correctly?

So the the the through the chair, council president Payne, the distribution comes in um two phases.

Yeah.

One around um the first quarter, and I think the second distribution comes in around the third quarter.

We want to get you the right advantage here.

Yeah, I'll ask you to first introduce yourself.

Hi there.

I'm Ben Zimmerman.

I'm a principal budget analyst uh council president Payne.

There's a certification for the current year's uh receipt of Laha funds, which I believe is in July, June or July, and then there are two distributions.

And again, I believe that's one in the summer time and then one that comes in through December to clarify if that's your seating.

Yeah.

When was the certification?

I don't have an exact date, but I believe it was late July.

We can I can confirm that.

Thank you.

Specifics are less critical.

I'm just trying to understand broad timing as it relates to our budget cycle.

Yeah, I think that's it.

Okay.

And let's just note that for administrative follow-up, just some clarity on Laha.

Um okay council member Chavez.

Uh thank you, Chair Chuck Time.

And I just wanted to read out loud the shelter capacity this week.

So on October 13th, there were only two shelter beds available at available at 10 p.m.

at night.

On Tuesday, October 14th, there was zero.

On Wednesday there was zero, and we don't have data on yesterday's.

And the reason I am bringing that up is because we need to be taking the cuts to programs meant to address untrusted homelessness very seriously.

The cutting of the emergency housing voucher program is something that we need to restore because it's something that we did at the last council uh budget process last year.

I'm very disappointed that the mayor decided to not prioritize efforts to reduce untrusted homelessness by cutting this from the budget and have yet to fully implement this pro to get to implement this program.

And I hope that we as a body figure out a way to restore it, which is why I was thankful for Consulmember Wancy's efforts last year to do this work and then efforts today on the day saying that she's gonna help figure out how we as a body can restore these cuts.

And this work helps reduce shelter capacity because at the end of the day, helping house more people helps prevent homelessness, helps prevent people from being on the street.

And especially at a time where there is a lack of shelter capacity every night.

So I just wanted to make those comments.

Thank you.

Um just I I want to uh it's it's been quite a while since you've been um presenting and answering questions.

Thank you for your patience.

I am last in queue.

Just have a couple questions for you.

Um I think this first one can be an administrative follow-up if you if there isn't someone who um is here that that can speak to it.

But I I just am wondering if someone can speak to um people's way management.

There's an addition of a hundred thousand dollars in this year's budget.

It was a change item last year as well for the same amount.

So I'm just wondering if someone can speak to like what are the functions that this um that these resources are are meant to be actually doing.

And then um did we end up using all 100,000 in 2025?

That that is that how we got to that 2026 number?

Sure.

Um Chair uh Chuck Chai, uh the the money that we're using is is for property maintenance.

It's so like moving stuff that's been dumped, uh making sure if there's a water, like there's a water service that breaks, uh snow plowing.

Um just you know, basically it's it's it is a it is a fund that we use, and when if we don't use the whole hundred grand, it gets it it gets um put back into the general fund.

So it's just uh it is an account for us to just do that baseline.

We're keeping it as is as we've talked about that with the council.

I don't know how much money we've spent this year.

I would be surprised if we get to the hundred, but we won't have any money next year.

That's why we would and we're not gonna be ready for it's we're it's gonna be a few years before we're we're looking at trans transferring this to a community partner.

Um so we're gonna have to have that expense, and that's why we're trying to be as transparent about it as possible.

That is great.

Um so then we'll just note for administrative follow it follow-up that it would be uh great to get some information about how much of that 100,000 allocation has been used so far this year.

Um Excell.

Um and then my next question is about it's a follow-up, I believe, to Councilmember Wansley's like first question.

I know that was ages ago.

But um so for uh the the small business support programs um that are where you are still in process of of figuring out how to disperse them.

Um what is gonna happen?

Like w have you guys thought about what happens with the savings at so far in the year or at the end of the year?

Is that something that you're trying to roll over or something like to are these resources that are gonna fall to the bottom line?

Uh Chair Chugtai, you're you're referring just for everybody's I think so we're on the same page, the $900,000 for people that were impacted by construction, that that question?

Um I think it was the like DTAP and small business support programs.

Okay.

Yeah.

So DTAP uh to that to DTAP in small business.

If we have um uh if we have contracts in place, then they're part they they are a component of the roll rollover.

If there is funds that are not contracted, then that would roll to the bottom line.

We typically contract all of those funds.

There you you know, we usually get more people that want those funds than funds available.

There are some times where contractors don't spend as much money or they the contracting it's but it's it's really uh it's neglected negligible in that in that account.

But they will be rolled over because we don't have a contracting period that's uh January 1 to December 31.

So and I think my last question for you then is um I think early on in in uh the discussion portion you mentioned, you know, there were a series of programs that were added to the CPED budget um that you were hoping to be able to have some updates on in your presentation today that wasn't in the cards.

Yeah.

Um so I think as you work to um pull updates about all of those together and communicate those with the council, um, it would be helpful to understand what is happening with each of those programs, right?

Because uh I you know, as you were talking, I pulled up the change items presentation from August of this year, and every single one of your change items in your department um was listed as either being on track or complete, right?

Like the ones that are complete, I I know that's when um there there's been an action taken or the thing has already happened, but for everything that's on track, it'd be helpful to know, especially for the pieces that are no longer on track, right?

Like what happened between August and October that um that we suddenly went from everything's gonna be happening on it on time to to not um and it'd be helpful to just understand from you uh what the plan is for for the savings from each of those programs that that will not be dispersed by the end of the year.

Uh Chair Chuck Tai, yes, in August.

We were optimistic.

And everything, you know, we had done some for that.

Let's talk about that $900,000 uh program for businesses, for example.

We have done some preliminary discussions and then we were going to resource it with somebody to write it.

Um those those resources kind of got a little bit uh they're focused on some other things.

We had some pretty important RFPs going out for some properties.

We put some resources towards that.

That's the same team that would under would review and underwrite that program.

So it just got a little bit out of out of sorts, but at the time in August, um that's why you saw the green circle.

Um and then but we absolutely um can give you information on the programs and what's been done and where it is.

Um we want to make sure you have the information you need.

And then if if we get it set up, the uh the uh idea would be as we do with a lot of CPED programs, is it would roll over, it wouldn't fall to the bottom.

So great, awesome.

Um Councilmember Travis, are you in queue again?

Yes.

Okay, awesome.

Thank you.

Thank you, Council Vice President.

And Chair Chucktai.

Uh Director Henson, you mentioned that the transfer of ownership of the people's way will take a couple years.

Can you at least clarify your comments?

My understanding is that at least or you're talking about the transfer of ownership is different from identifying a community owner.

Um Chair Chuck Tai, Councilmember Chavez, very good question.

Because yes, it is different.

So what we are doing at the People's Way is we are doing a rest request for qualifications, which is we are we're making a decision on a partner, and then that partner will go through a process on what to do with the site.

So the transfer of the real estate would not happen until that process is done.

So there's like a two-step.

The one is we own it while they're doing the development process with community and with the city, and then we would transfer it.

So it's gonna take a little bit of time.

We're we're we're hopeful to get to the council soon with with uh selection of a of a operator or a partner, and then we go through that process and then we would sell it.

Because we have to go through a public hearing and and a notice, and we need to have all of these redevelopment requirements met, and so we need to know exactly what they're building.

That's gonna take a couple years.

Okay, thank you.

Yeah.

Um I see Councilmember Wansley in queue.

Yeah, just building upon just questions around that.

I know we were supposed to receive an update on whoever the uh qualifier would be, the community qualifier for the people's way back in the spring, it's now May.

Back in May, it's now October.

And this seems rare.

I know we do RFPs quite frequently and never seen a delay like this before.

So just trying to get a sense of the timeline when we will know.

Yeah.

Uh Chair Chug Ty, Councilmember Wandsley, yet this year, yes, we were we were hoping for May.

It's it's this is a really important decision.

We're taking as much time.

We we needed to get some more information.

We've had some conversations with um the responders, um, and we'll be bringing forward a recommendation soon, but it's it's taken us.

We're trying to be very thoughtful about who we present, so it's taken a little longer than we thought.

And I appreciate it's October and not um uh not May.

Yeah, no, I acknowledge that.

I acknowledge that.

Yeah.

Yeah.

Um it's a big deal.

It's a big deal.

It is very much, and again, because it's May, and then now it's October.

And um, because I I know we spent a lot of time going through RFPs and contract administrations and all that stuff, like putting guardrails in place, and I know it's it takes time for a community partner to go through and you all crafted a very elaborate process for this RFP, and they fully participated a number of the the bidders, and to not for them even have an answer is it seems yeah, unprecedented.

So hopefully that's something we get to wrap up before the end of the year or two.

And uh Chair Chucktai, Councilmember Wandsley is a little different because when those RFPs, we're evaluating a proposal, so it's we know what they're going to build.

This one's a little bit more nuanced because it's the qualifications of a development entity that we will partner with.

That's why it's taken a little bit longer.

So just clarification that I from because you all had the public engagement piece where the each participant or bidder came and did a public presentation around what they would propose for that site.

So it seemed like that did happen from those who did participate in the process of say this is what we would like to develop.

I think you all also during that process interrogate it.

If you don't have that experience, who would you work with?

And so again, it sounds like due diligence was done.

The partners also rose to the occasion, all with a goal and expectation that a decision would have been made in May.

Yeah.

Um, council uh chair uh Chucktai, Councilmember Wandsley.

We also heard from that um uh event, community wanting up to see a partnership with the organizations that were up on that stage that evening.

And so we have been doing some uh uh we've had some conversations with the proposers on potential um partnerships.

And again, yes, you that's correct.

They have a if they have not done it, it's a nonprofit that's leading it with the development team.

And so they have those all of those um components of their team have been are being evaluated, but there was some additional feedback we got from that community uh event and from um from uh surveying, and that we wanted to make sure that we are you know being thoughtful about what we heard from the community.

And so that was a little bit of a that that kind of put a little bit of uh extra time into the into the process because of what we heard from community in that in that February event.

Hmm.

Okay.

Uh one questions I have.

Okay.

Thank you.

I'm not seeing anyone else seeking to be recognized, so I'll ask the clerk to file that presentation.

Thank you so much, Director Hansen.

It was a pleasure.

Um we are now ready to uh welcome our next presentation from the regulatory services department.

And for this, I will invite um Director Enrique Velasquez to join us and begin the presentation.

We'll just allow a couple minutes for people to transition in and out of the space.

Yeah.

Good morning, Director.

Good morning.

We are ready for you to begin.

Wonderful.

Well, good morning, Chair Chuck Tai and Committee members.

I'm Enrique Velazquez, and it's my absolute honor to serve this great city as the director of regulatory services.

Today I will be presenting on our collective progress this year toward our outcomes as well as the budget changes included in the mayor's recommended budget for 2026.

Regulatory services is housed in the Office of Public Service within the development, health and livability vertical, led by our deputy city operations officer Brett Shelley.

Our department's work is closely connected to many of the mayor's 2025 priorities, namely affordable housing, homelessness response, climate action, public safety, and good governance.

To that end, we collaborate more closely with the departments of health, community planning and economic development, public works, and 311 Service Center, among many others.

Regulatory services consists of four divisions, inspection services, led by Director April Bogard, operations and engagement, led by Director Josie Shardlow.

Minneapolis Animal Care and Control, also known as MAC, led by Director Tony Schendel.

And Code Compliance and Traffic Control, led by Director Ahmed Ado.

This year we embarked on a vision of creating one regulatory services.

We engaged in several efforts to break down silos.

We're also realigning staff to better suit business needs.

One of these efforts involved moving two teams out of operations and engagement.

The two teams are the alternative enforcement team and the housing liaison team.

And over into inspection services.

You'll see the new reporting structure reflected in the organizational chart, and that half of those FTEs have budgetarily moved over already.

Our mission is to protect the health, safety, and welfare of residents, visitors, and pets through enforcement, education, and community engagement.

We strive to provide compassion and enforcement wherever appropriate while pursuing accountability to keep Minneapolis a great place to live in, work in, do business in, and play in.

This year our efforts centered on four priorities strategic and innovative work, effective and high performing teams, operationalizing race equity, inclusion, and belonging, and fourthly, developing a work culture that truly reflects our values.

We've come a long way in 2025.

So far, we worked on a total of 12 ordinances and legislative directives, including implementing last year's renters' rights mandatory disclosure ordinance.

We bolstered property owner participation in energy efficiency programs through a new partnership with the Health Department and the Climate Legacy Initiative.

The homeless response team started conducting housing intake assessments to connect more people to services.

While we're continuing to refine the encampment closure report, we overcame significant logistical hurdles and launched this joint effort that captures data from both the county and several city departments.

We cared for an unprecedented number of shelter animals while maintaining a greater than 90% live release rate.

With all of our external focused work, we made sure to also prioritize supporting our staff.

We meaningfully invested in our workplace culture through resiliency training, increased connecting, increased connection points between staff and supervisors, and were intentional in our efforts to build internal communications within the department.

As we've reflected on 2025 as a department, something that stood out was the number of new strategic initiatives we launched, despite it being a very full year.

For the first time ever, we're licensing and inspecting Minneapolis Public Housing Authority properties.

This historic step reiterates our belief that everyone deserves safe and healthy housing, regardless of age, race, ability, socioeconomic status, or citizenship.

Traffic control co-launched the traffic safety camera pilot in partnership with Public Works and is working toward launching the civilian crash investigation pilot.

As I mentioned earlier, we started reorganizing inspections.

This work will continue as the division next implements a new structure that will help us better manage our large portfolio and deepen inspectors' understanding of their part of the city while reducing or eliminating single threads of failure.

These steps are crucial to maintain community of service.

Inspections will also be moving into a new building where staff will be co-located with CPED's construction code services team.

Co-locating will increase efficiency, collaboration, and connectedness in our shared work between these two work groups.

Operations and engagement updated over 40 web pages to meet accessibility best practices while maintaining pages more in while making pages more intuitive for the end user.

We're also simplifying and clarifying our fire permitting processes.

When we focus on people and the communities we serve, great things can happen.

Shifting from the achievements over to risks, some of our greatest achievements this year dovetail with the risks we're working to mitigate, namely staffing stretched beyond capacity.

I'm incredibly proud of the innovative efficiencies they've employed to manage through these challenges, but these pressures, risk continuity of public services in the long term.

In the future, we'll not be able to rely on creative solutions to overcome capacity limits.

Across each of the divisions, we're charged with doing more as community demands for our services continue to grow.

For example, Minneapolis Animal Care and Controls Shelter has long been at maximum capacity as more and more people are surrendering their pets.

Between 2021 and 2024, the number of pet surrenders nearly doubled.

And we've already had over 656 pet surrenders this year.

This is not just a local issue.

This is a trend we're seeing at the national scale.

MAC has reached its physical limits, and we've utilized every option we have to manage.

Looking ahead, MAC's grant-funded foster care coordinator position will expire at the end of this year.

We rely on nearly 500, 489 to be exact, foster families to temporarily home pets, getting them out of the kennels quicker, and in turn reducing the stress and potential behavior challenges that might result so that these animals find their forever homes faster.

Traffic control and animal care and control implemented body-worn cameras.

We took this critical step to better protect staff as they work in and enter potentially dangerous spaces.

We did so while understanding that this change to better protect the safety of our staff would also come with additional data requests to manage and administer.

We also folded the largest portfolio of over 800 Minneapolis Public Housing Authority properties into rental licensing and inspections while keeping our FTE count flat.

Inspections of these properties are already underway.

Demands for traffic control, inspection services, and operations and engagement service members continue as we support special events across Minneapolis.

We absorb most of this work with our same staffing levels by employing creative solutions.

In some cases, we had to make the difficult decision of repurposing other roles to minimize impacts to our most critical service areas.

As for learnings, an audit of the MAC facility revealed security risks that we needed to mitigate by adding an on-site security specialist.

MAC is the only city facility taking cash transactions that does not already maintain a security presence.

There have also been a number of security incidents at the MAC facility this year that place staff and the public at risk.

We were actively working on a number of initiatives to strengthen staff safety when the audit finding elevated the priority to add a security presence on site.

In the mayor's budget, there is a one-time 101,000 reduction from our department's budget to pay for your security specialist at MAC in the interim.

And allow me to close on this topic with one more learning.

We've watched as the landscape on unsheltered homelessness has evolved in the past year.

The number of encampments declined as the Minneapolis Police Department's response has shifted.

The homeless response team has adapted its approach to continue meeting people in all the spaces unfitted for human habitation.

This means engaging with unsheltered residents on the banks of the Mississippi River, in wooded areas, in vehicles on city streets, and in private parking lots.

The HRT truly go wherever people are, bringing snacks and other engagement tools as a bridge towards trust building.

They do so because every single person has value and is deserving of a safe, livable space to call home.

Most of the increase is dedicated to salaries and wages for existing staff.

We've made almost a 5% cut in operating costs, among other categories, which help offset some of the increase.

Operations and engagement.

We've simply changed where staff are reporting within the department.

Subsequently, you'll see an increase in inspection services.

The overall effect for these changes is budget neutral.

These dollars were allocated to the pilot, despite Minneapolis Code of Ordinances not granting us the authority to implement the pilot.

So we were unable to use these dollars, even though we would appreciate the opportunity to leverage our existing expertise in this area and continue to move forward with it.

Budget FTE summary.

So really what we're transferring to communications is the funding for that communications manager position.

Program updates.

As for the programmatic updates, regulatory services launched our participation in Outcomes Minneapolis this year.

Because of the nature of the work, differs greatly from division to division.

I'll highlight metrics of success as we discuss each one of the divisions.

You can view all of our metrics on the public-facing dashboard by scanning the QR code on the very last slide of this presentation.

So first up, we have Minneapolis Animal Care and Control.

MAC partners with the community to ensure the health and safety of people and pets by promoting the responsible and humane care of animals.

We accomplish this through enforcing local and state laws as well as community outreach in animal sheltering.

MAC is a rare find in the animal control field for several reasons.

Our program is community-centric.

A group of almost four 500 volunteers help support animals in our care.

We offer low-cost adoptions in animal services and have our own veterinary professionals who keep the animals healthy and prepare them for adoption.

We also lean into our expertise by serving as the lead agency on 911 and 311 calls involving animals and the investigation of animal cruelty charges.

We track our response time to public safety incidents.

For calls designated as priority one, the goal is to respond within one hour.

And we've met that for nearly every single nearly every single one.

Most importantly, it's MAC's ultimate goal to save the life of every animal that comes through its doors.

To measure our success, we live at look at the live release rate, which is the percent of animals that find a home and do not need to be compassionately and humanely euthanized.

Despite taking in so many animals, some of which have had severe injuries and dangerous behavioral issues, we maintain a 90% and above live release rate.

This status is very rare for municipal shelters to achieve and is a testament to the dedication of our staff who ensure proper care for the voiceless.

This year we've also maintained a lower length of stay for animals in our care, which means that they find a home more quickly, giving us a little more capacity to help each animal that needs us.

Multiple efforts culminated in this success, but we owe it big thanks to our foster care coordinator.

Last year, nearly 20% of our animals stayed with a foster family, decreasing the burden on shelter staff while ensuring active social engagements within the foster family home environments.

Inspection services.

Shaping the health and safety of homes, neighborhoods, businesses, and events.

Inspections works to protect the well-being of every community member.

We do this through proactive inspections, responding to complaints, permitting consulting on matters of fire safety, and engaging with community.

Inspections is known locally and nationally for leading the city's robust rental inspections program.

Beyond rental inspections, we're charged with addressing nuisance complaints in neighborhoods.

A little known fact is that a significant portion of inspections work actually goes towards addressing issues of owner-occupied properties and neighborhood livability.

On the next slide, I'll show data that nuance violations are increasing.

That's in part because we dedicate our summer interns' time to doing proactive enforcement.

And they've been able to catch more issues before they turn into complaints.

We do permitting for fire safety at special events, construction sites, businesses, and hazardous material storage and so much more.

Inspectors put a lot of work this year into revamping our hazmat protocols and procedures.

And we tackle the city's most complex housing cases, like trying to get long-term vacant properties back into use and supporting displaced renters.

Shifting to the metrics, one of our ongoing goals is to prevent renters from being displaced, and we pursue this in a number of ways.

This year we brought 22 properties into compliance through tenant remedies actions, TRAs, against unresponsive owners.

We have another 28 TRAs in the works.

We conducted portfolio inspections where we monitor high-risk, high-volume landlords to ensure timely repairs and accountability.

For the first time ever, we imposed involuntary conditions on rental licenses to ensure owners follow through on compliance.

We've seen these collective efforts pay off as more rental units are repaired and reactivated for renters rather than losing them to vacancy.

We also saw unfortunate cases where renters did experience displacement.

To provide them with stability, we awarded a total of $50,400 in renter relocation assistance to 16 families so far in 2025, with additional cases still pending.

Renters typically receive payments within two weeks of displacement.

This quick turnaround reduces the risk of homelessness and builds trust in city programs.

We implemented a new ordinance, the prolonged vacancy enforcement, geared towards getting longstanding vacant properties back online.

We'll be presenting on this to council later this fall.

What I can preview for you here today is that we've seen 20 properties so far that are actively moving towards one of two avenues either sale of the property or rehabilitation.

Code compliance and traffic control.

Traffic control helps keep our streets free and clear and traffic moving smoothly at all times of the day.

We accomplish this through citywide parking enforcement, intersection control, and education.

You'll see our agents directing traffic during emergencies and rush hour, and even at events such as Vikings and Lynx Games.

We're a regular partner for other city departments like public works as we provide parking enforcement during snow emergencies and regular street cleanings.

Our role has expanded in recent years as we now respond to non-emergency issues that were previously managed by Minneapolis police.

Focusing on outcomes, for the first time in a long time, traffic control was fully staffed in 2025, and it brought exciting results with it.

Looking at the bar chart on the left hand side, you'll notice two things.

First, we've made significant progress in responding to calls within our service level agreement.

Today we made our service level agreement nearly 100% of the time.

The second thing you'll notice is that the volume of complaints appears to be decreasing since 2023.

While 2025 is not yet over, we do expect that the downward trend will continue as our stronger staffing levels allow us to do more proactive enforcement, strengthening neighborhood livability, and preempting complaints before they happen.

Another metric of this year's success was managing an increased demand for special events.

As Minneapolis grows its reputation as a premier destination to hold events, we've met this demand while balancing our responsibilities within the public safety ecosystem.

Operations and engagement.

Operations and engagement is the backbone for our department.

They lead strategic efforts across the divisions to improve processes, support accessibility, equity and inclusion, and provide data-driven solutions and financial analyses.

They play a key role in implementing ordinances and creating engagement opportunities for the community to connect with staff outside of enforcement situations.

This year ops and engagement organized staff presence at more than 14 community events.

Our finance manager and team of data analysts tackled strategic projects that increased the efficiency of several programs, informed decision making on how to best serve residents, and positioned the department to be stronger financially.

We manage contracts such as the homeowner repair assistance program, supported the Minneapolis Advisory Committee on Housing.

The decrease of the division's budget shown on the chart is primarily due to the shift in field-based housing focused teams out of operations and engagement and over to inspection services.

Shifting to metrics and outcomes, ops and engagement supports the entire department, but one of its larger teams, the administrative team, primarily supports inspection services by issuing permits for special events and fire safety, as well as rental licenses and citation letters.

Rental licenses continue to increase in Minneapolis, which are presently up by 4.1% since the end of 2024.

Particularly as the program grows, it's been a priority to tackle process improvement that have helped property owners submit the license renewals on time and streamlined communications to better support 311 and community members.

Carving out our homeless response from operations and engagement, which is embedded in operations and engagement.

Just wanted to have a separate call out here.

The homeless response team serves as the first step in responding to unsheltered homelessness.

The HRT is out in the city five days a week, connecting people to local services and resources and providing culturally considerate, trauma informed, and equity focused help.

Their engagement embraces a long-term strategy.

We know that a no today to shelter can become a yes tomorrow, in a week's time, or in a year.

Anecdotally, our teams are engaging with most anecdotally, we know that most of the time we're not just connecting with someone just once.

We're reconnecting with them over time to build trust and relationships.

And every time we see every time we see them, we offer shelter and resources.

It's slow long-term work.

At the same time, we have to celebrate successes where we have them, and we're thankful to have been able to provide 276 housing referrals so far this year.

In terms of budget changes and reductions, the two proposed budget reductions relate to the homeless response team.

One homeless response coordinator position has remained vacant for quite some time after struggling to find a suitable candidate through multiple postings and seeing the state of unsheltered homelessness shift in Minneapolis.

We paused hiring earlier this year.

The HRT will continue outreach with its existing five FTE.

The second light item is nearly 213,000 in contractual services for hand washing stations, portable toilets, and storage for unsheltered individuals' belongings.

We lacked viable pool of service providers who are interested in providing hand washing stations and portable toilets.

Meanwhile, we also saw the number of encampments decline.

Storage services were also infrequently used.

And we did go out for bid twice for this specific line item.

The first time pulling zero interest, the second time, just one interested party that was not interested in meeting our specific needs for storage.

They were not willing to provide storage in community.

It was downtown only.

So we elected not to move forward with that issuance of that contract and are planning to still look for a different opportunity to try and find storage options.

In closing, um, there have been this has been a very eventful year, one that could not happen without the compassionate care and intention of each of the division directors and the teams they lead.

There's more work to be done, and we're at the ready for whatever comes next.

Thank you for the opportunity to present on our work and our budget changes this year.

Thank you very much, Chair.

Thank you, Director Velasquez.

Um, and thank you to your team for for coming in today and patiently waiting while we work through our first presentation on a Friday.

Um I am gonna see if my colleagues have any questions.

I see three people in queue right now.

So let's all try to be as concise as humanly possible in working through discussions so that we can maintain quorum and everyone can get a everyone who is seeking to be recognized is able to do so.

First, Councilmember Palmasano, then Councilmember Cashman, and then Councilmember Chavez.

Okay.

Thank you, Madam Chair.

Um, and thank you for this presentation, Director.

Uh I really admire the shift in focus of the inspection services division to a renter first approach, renter centered.

I didn't necessarily see that in the slides, but it's in the budget book.

Um I've been dealing with a particularly difficult situation in my ward and have experienced the care and compassion and the renter centered approach that your team has.

Your staff worked with a resident on housing maintenance and livability issues with great purpose and sensitivity.

Um this resident stopped living in his car and accepted a deeply affordable housing opportunity.

Um, and your staff was instrumental in working that through for in many ways to a safe and dignified outcome.

Um so thank you.

For the reduction of a homeless response coordinator position.

I think I saw that right.

I'm glad to hear there's no impact on services expected because this position was added this year but never filled.

Can you help me understand why the position wasn't filled?

Yes, through the chair, Councilmember Palmasano.

We did uh attempt to fill that position multiple times this year, and the pool of candidates that were interested in coming on board wasn't there.

So we tried a number of different opportunities.

We engaged and did outreach with through our partners and through the county in a number of different areas to try and expand the pool, and we just were not successful.

Yeah, thank you.

And then I note there are eight vacancies, and can you give us a sense of um where you're at generally in the process of filling them?

Certainly, through the chair, council member.

Uh so we do have eight vacancies.

I believe four of those are in traffic control.

Uh we recently uh promoted individuals from our traffic control unit to focus more on the traffic camera uh pilot project.

So we have to backfill those specific positions, and we're currently working to through the hiring process right now.

We also are hiring two inspection services supervisors as part of the overall realignment.

Those interviews have been completed and selection is imminent.

I can feel a nod in the back here.

Um, we do have uh a probationary release of a homeless response coordinator.

That posting is currently active and will close on October 28th for any interested parties who are listening.

Um we will be actively recruiting and pursuing an additional homeless response coordinator.

We have four individuals.

We have a fifth FTE.

We're looking to backfill that fifth FTE that recently vacated.

And I believe there's one more position.

I'll have to look into that last position and get back to that.

That's okay.

This gives me a general sense of it.

Thank you.

Certainly.

Let's note that for administrative follow-up.

Councilmember Cashman, then Councilmember Chavez.

Uh thank you, Madam Chair, and thank you, Director Velasquez, and the whole team for coming in.

I think you have all been undergoing a lot of change in the department in the last couple of years and really appreciate your nimble ability to work with the council on new ordinances and policies.

So it's great to see a lot of the work really coming online, and I really appreciate that and look forward to um continued conversations.

I know we talked about having a study session as a council on um the reform of the tiering system and rental licenses, and I look forward to working with you on that.

Uh I just wanted to ask a little bit about prolonged vacancy enforcement, but I do understand you'll be coming to Biz Committee to present on some findings of how that's going.

Uh but I'm particularly interested in how many properties went into prolonged vacancy enforcement that yielded 20 that are going into rehabilitation.

Do you know how many have gone into PVE?

Okay.

All right.

Yeah, through the chair, Councilmember Cashman, there were 59 properties that went into the prolonged vacancy enforcement this year.

And uh as I stated before, there are 22.

And even 20 properties that are moving forward in one of two capacities selling their property so that it can go to somebody who's interested in actually re-redeveloping that space or rehabilitation of the property.

Thank you.

I would say that's pretty good uh results from just a few months of operation.

Thank you for that.

I look forward to uh hearing more.

And then uh on code compliance and traffic control.

Um I'm just curious under what circumstances traffic control personnel direct traffic and under what circumstances MPD officers do.

Through the chair, Council Farmer Cashman.

Um I'll start and then perhaps Director Adal can assist.

Uh so traffic control direct traffic during rush hour.

Um they're the primary entity within the city that does conduct traffic.

Uh they will also engage in special events activities as part of the Block Event Special Event Committee.

They evaluate what the conditions are and which agents are required, how many agents are required, or will it be a requirement that perhaps a uniformed or off-duty Minneapolis police officer comes into uh into that space to navigate traffic.

Any additional comments you'd like to make?

Yeah.

Introduce yourself.

Yeah.

My name is Amara Dow, and I'm the director of Minneapolis Traffic Control.

Thank you, Madam Chair.

Councilmember Cushman.

Um there are some events that Minneapolis Traffic Control uh is more responsible.

Mostly the target center, target field, or US Bank or Gophers, or most of the open streets, we do take those as the lead.

But there are also some other events that we coordinate and collaborate with the MPD and especially the pride events due to security and aquatenials and the 4th of July.

So there are some events that uh we collaborate because some of the intersections or the traffic management is uh it's so many uh intersection that we do manage, and none of my team are able to uh accommodate that request.

So MP will participate.

Okay, thanks.

So is there a policy that guides that decision making or is it on a case-by-case basis?

Uh it's mostly case by uh case by case, but uh any of it most of the events that relate to the venues, we do take that responsibility and and we have some we do have contractual agreement with them.

Uh but most of the the other events that require securities, MPD takes the lead, but we do sit with them on the table with public works because we do not approve permits.

Most of the departments are approved by uh MPD and public works.

Okay.

Well, thank you for the information.

I I asked this because I'm interested in fiscal responsibility around this, and I know what we've recently learned that with our parking systems, you know, we're paying um off-duty cops, and it could be over $100 an hour versus bringing that in-house into traffic control would save the city this is the taxpayer more money and could be more streamlined.

So I'm just interested in this for future purposes, which is why I was asking about that.

Um and also interested in how we could effectively expand MPD's capacity by taking them from you know the traffic control functions that they're doing and allowing them to then improve their response times to um priority one calls and so on.

So um though that's the basis of my questions, and I'm wondering if you have any thoughts about where that's shifting, uh where we've shifted in those those resources.

Yeah, as you guys noticed the metrics that uh director uh Velasquez has shared.

Uh we are already at capacity right now and we only have about 45 traffic control agents that oversee over 700 events with more than 800, 8,000 traffic control hours in addition to the 311 complaints and all that.

So we uh finding creative ways to manage that, but uh we also open to discussions on how we can assist uh, but knowing that uh we had capacity and we're willing to have that conversation.

Yeah, thank you.

I appreciate it.

Um my next question was uh about page 18.

Um, how many of the 276 referrals for housing resulted in a successful placement of housing through the chair uh councilmember Cashman?

Um if I understand the question, how many of the housing referrals actually took up the offer of housing or how many moved into housing?

Yes.

Um that's data that we don't have and the county also does not track for us.

Okay.

Um so we know we're able to provide the the referrals.

We don't have visibility on the back end of how many people actually went into housing as a result of the referral.

Okay.

Uh it does feel important.

I'm wondering if it's part of our encampment reporting ordinance uh ordinance.

Um it does feel important to try to follow these these individuals through to success, you know, with placement um and just something to think about trying to find a way to track in the future.

But yes, thank you for that.

Uh Councilmember Cashman.

That's certainly a concern for us as well, because we would love to be able to see how successful are we as a system as a city of making the referrals and helping people progress on their trajectory towards safe, stable housing.

Um it's uh something I continue to raise up with the county as we try to find a pathway to be able to answer that question.

Okay, thanks.

Well, I that's all the questions I had for now, but I also wanted to congratulate um the animal care and control department for really incredible outcomes of success uh responding to over 90 percent of priority one calls within an hour is very admirable.

Um I just think it's worth celebrating all the great work that that department does.

Thank you so much.

Excellent, thank you.

Um so for everyone's awareness, we will be losing quorum in seven minutes when we will have to adjourn this meeting.

So next, Councilmember Chavez, then Councilmember Wansley.

Thank you, Chair Jack Ty.

Uh, Director Velasquez, can you clarify?

Because I feel like now I got two confusing points unless there are two different positions.

What position was passed?

And then I think you said there was a position that's being hired at the end of the month or something.

Yes, through the chair, Councilmember Chavez.

We we have five FTE uh or in our proposed currently there are six FTE in the proposed 2026 budget, we will lose one FTE of a homeless response coordinator.

And we're currently in the process of hiring that fifth homeless response coordinator team member.

Thank you.

And why are we losing one of the homeless response coordinators?

So it's part of the process of re evaluating the budget at the enterprise level.

This position had been vacant pretty much the entire year.

We tried to hire it multiple times and weren't able to gather it a talent pool to be able to fill the position.

And the options were to eliminate a vacancy or eliminate a position with somebody in it.

We made the hard decision of eliminating eliminating the vacancy, even though this is in one of our priority areas.

Okay.

But people did apply for the position.

There were people who applied for the position, yes.

Okay.

I guess the concerns I'll share is I remember last year when we were passing our encampment reporting ordinance concerns were that a lot of these individuals from HRT were going to be doing paper pushing instead of being out on the street.

And I guess my concern is now that that concern was raised by staff and now that position wasn't hired.

So that the math doesn't add up for me if there was concerns about paper pushing instead of being on the ground and then not hiring for the position, even though people did apply, I just want to publicly share my concerns with that because the math isn't mathing over here.

The other question that I have is about the storage situation.

Did staff communicate with the city council that you aren't going to proceed with storage options possibly in the Southside or in locations that aren't just in downtown, or that you were struggling to find someone that was willing to do this work.

I think my concern is that people need storage.

And I why are we finding out in October that this isn't happening?

Through the chair, council member.

So addressing the first part of it, and then I'll address the second with respect to the paper pushing.

Recognizing that we need our field-based teams.

We need our homeless response team in the field.

That paper pushing is being done by me so that they can maximize their time in the field and engaging in all that work.

So it's on me to manage that work.

The encampment closure reporting, all of the tracking, all of the project management.

I do that.

For the second piece.

But ended up not applying.

And the only one that did apply was the Minneapolis Downtown Council to utilize the funding to continue programming that they were already doing, already paying for, that was separate from what we were looking to do with and what council authorized us to do with the funding.

Thank you.

And the last, I guess not question anymore, so I'm not going to ask the question, but I did want to make a statement.

I think the overall proposed budget that we just heard from CPED that cuts emergency housing vouchers on by by the request of Mayor Fry and now cutting funding in this budget for encampment response when it comes to public health services.

I think we have to be realistic and that homelessness is not going to end next year.

The current budget proposed by the mayor is not going to end homelessness.

And then cutting funding meant to do public health services for folks experiencing homelessness is now going to be cut a lot of it's going to be severely cut.

I just don't know how we're going to address homelessness next year with this budget.

And I think I just wanted to raise those big flags and concerns.

Excellent.

Thank you.

Did you get out of queue?

No, we can get up out of here.

Council President.

Make it quick, though.

Very quickly.

Oh, okay.

Hard to get it quick.

So I guess I'll say we're conducting a fee study right now.

I I know that your department is dealing with some of our most complex challenges at the intersection of livability and safety.

And um, you know, I've had the big nursing home in my ward.

I'm really grateful that you were able to bring a little bit more security to that building, but there's still people breaking in, and it's just it's just hard and it's complex, and it's not about necessarily reg services not doing its job, but it is a complex job that I don't know that Reg Services is exactly has the capacity to respond to.

And I'm just curious about um the practical realities of your resources in your capacity.

And they're not getting resolutions.

And so I I just struggle with some of these really complex livability challenges and does reg services have the resources it needs to actually meet them.

And I because I don't maybe kind of took council member Travis's uh statement more than question.

Does this budget actually meet those needs to be a good thing?

Yeah, through the chair, uh Council President Payne.

It's a hard one to answer, sir.

Um we have a number of different initiatives that we're working through.

There's the new ordinance that uh recently passed that we think will be a big benefit, redoing our rental license ordinance, which will also be a benefit, but it doesn't necessarily speak to the vacant property, and that takes some significant partnership.

So we have to rely on our partners across the city to help us solve for those acute types of issues and preserve community livability.

We also have new software that is going to help us on the back end so that our staff can be more attentive, can have sharper focus when out in in the field to address some of those different complex issues as well.

Um to wrap up, it's probably too soon to tell just yet how effective those specific changes will be.

Yeah, I'll I'll just finish and say maybe what we need to do is just do some really focused work in the next year on how we can leverage a enterprise-wide approach to some of the challenges that happen to land on Reg services right now, because I don't think that your department is actually in a fair position to be able to handle some to handle some of these issues that need that type of enterprise-wide response.

Thank you.

Wonderful.

Thank you, sir.

Um I I am not seeing anyone else um seeking to be recognized, so I'll ask the clerk to file that presentation.

Thank you all for coming in to present your recommended 2026 budget.

With that, we have concluded all business to come before the committee today.

Um and if there is no objection, we stand adjourned.

Thank you.