Good afternoon.

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

I'm going to call to order our meeting for Monday, October 20th, 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.

Council Member Payne.

Absent.

Wandsley, absent, Rainville?

Present.

Vita.

Present.

Ellison, absent.

Osman, absent.

Cashman, present.

Jenkins, absent.

Chavez.

Present.

Chowdry.

Present.

Palmasano, present.

Vice Chair Koske.

Present.

Chair Chucktai.

Present.

That is eight members present.

Let their record reflect that we have a quorum.

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

So please make sure to sign in.

Our first item on the agenda is department presentations related to the mayor's recommended 2026 budget from the health department, the youth coordinating board, and information technology and technology improvement plan.

I'll first invite Health Commissioner Damone Chaplin to begin the first presentation.

Welcome, Commissioner.

Good afternoon, Chair Chucktai and Budget Committee.

And today I'll be presenting the 2026 Mayor's recommended budget for the Minneapolis Health Department.

The Minneapolis Health Department is one of four departments within the Development Health and Livability Line of Business of the Office of Public Service under Deputy City Operations Officer Brett Jelly.

The Health Department is composed of approximately 172 staff supporting six divisions and approximately 20 programs and services.

We began revising phase one of our strategic plan process earlier this year.

That process led to the development of our mission, vision, and priorities for the department.

Our priorities have been consistent.

The Minneapolis Health Department is committed to being an anti-racist organization that centers equity in everything that we do.

To advance equitable health outcomes, we focused on securing flexible and sustainable funding that allows us to lead with stability and impact.

We're also strengthening our foundational infrastructure, the communication tools, data systems, and technology that help us serve our community and support our staff effectively.

Chronic stress among parents and caregivers, infectious disease prevention and control, substance use disorder, mental health, and access to health services for the homeless, infant mortality, maternal and adolescent health and well-being.

Over the past year, the Minneapolis Health Department has made strong progress across key initiatives, completing 100% of mental health screenings in school-based clinics, conducting over 2,800 mental health visits, strengthening the city's tobacco ordnance, launching the medical mobile unit, mobile medical unit to reach more than 750 community members, expanding our opioid response efforts through new partnerships in NARCAN vending machines and advancing environmental health programs with new online tools and successful state audits.

However, these accomplishments face risk due to heavy reliance on federal and state funding.

And so the Minneapolis Health Department seeks to create a city that is a healthy place to live, work, and play through our Outcomes Minneapolis database.

Our food lodging and pools routine inspections, follow-up inspections through our food lodging and pools program, residential weatherization, preventive lead paint mitigation, and greenhouse gas reductions.

And you can see here through our performance measures for 2025, we're on target to meet our 2025 targets and in some situations to exceed those, particularly when we look at our residential weatherization programs.

And so when we look at our budget for 2026, we see a cumulative budget for grants and general fund of about 46 million dollars.

And likewise, through our programming, you see slight increases from 25 to 26 as a result of uh increase in grants that we've received over the year.

We look at our FTEs for 2026.

We have a total of 171.5 FTEs with a slight reduction from 25 to 26 as a result of the administrative targets.

Um currently have a number of vacancies of 9.8 FTEs.

4.8 of those FTEs are on hold due to funding considerations.

Three of those FTEs are actively in the hiring process, and two positions were recently inactivated and will not be backfilled.

And so when we look at our programs, um, our environmental programs oversee inspections, permits, and city ordinances while advancing initiatives like the green cost share, city trees, carbon sequestrants, sequestrants, sequestration through biochar.

These efforts not only improve air and environmental quality, but also save money and increase sustainability across all property sectors, avoiding more than 21,000 tons of CO2 emissions each year through clean energy efficiency in green urban spaces.

When we look at our core infrastructure, we focus on managing resources effectively, promoting equity in every policy and practice, and maintaining high operational standards aligned with national best practices.

Our work includes budget management, grants and contract oversight, administrative support and services that strengthen public health operations, public health operations, all guided by efficient standardized processes that ensure accountability and excellence.

So our school-based clinics are meeting teens where they are, providing integrated physical and mental health care outreach and opportunities for growth.

This past year we served 2,655 unique students through our over 10,800 visits and 2,800 additional mental health sessions.

Screening rates for chlamydia and gonaria rose by 22%, and HIV testing increased by 50%.

Outreach efforts reached nearly 27,000 students, with 98% reporting satisfaction and 99.7% saying they would return and recommend the clinic.

Investments made by council and the mayor's office over the last few years have led to over 1,000 preventative interventions in homes.

Investments made by council and the mayor's office over the last few years have led to over 1,000 preventative interventions in homes, no doubt avoiding some children from ever being lead poisoned in the first place, and we have seen a 26% reduction in lead poisoning in 2025.

The Minneapolis Health Department safeguards residents and visitors by preventing disease and injury in food, lodging, pool, and body art establishments through inspections, education, and outbreak investigations.

Our team provides timely inspection information and compliance guidance to businesses while offering both in-person and online food safety trainings.

This year, 40 businesses participated in our serving safety program, with 168 in-person sessions reaching 443 learners, leading to 41 percent reduction in violations.

Additionally, 479 completed online food safety courses, 237 completed allergen, allergen trainings, and seven in-person classes were served.

Um served 144 learners.

All inspections were completed on time, ensuring high standards of public health protection across the city.

The City of Minneapolis gets its uh authority to license inspect and enforce through delegation agreements with the Minnesota Department of Health and the Minnesota Department of Agriculture, as well as through Minneapolis Code of Ordinances.

Family and early childhood program.

We promote healthy uh birth outcomes, positive parent-child relationships, and school readiness for providing family home visiting by providing family uh home visiting, education, outreach, and access to immunizations.

Through partnerships with Henneman County, more than 1,400 individuals received uh home visiting services supporting family health, growth, and self-sufficiency.

Between January and June, we conducted 28 vaccination clinics for children and adults and reached over 1,100 people with immunization education at community events, ensuring families are supported, informed, and children are ready to thrive in school.

Through our youth uh development and sexual health program, we ensure equitable investments in youth serving organizations that meet the needs of vulnerable young people and promote positive youth development.

Our work focuses on comprehensive self-sexual health education, STI testing, pregnancy prevention, and youth empowerment initiatives, including partnerships through the child-friendly cities and after-school programs.

This year, over 1,200 STI tests were conducted.

More than 1,100 youths are received education or care coordination, and 17 youth were trained as peer educators.

Um the architects for climate policy and outreach and community.

They are specialists in technical research and best practices across the country.

Through the Climate Legacy Initiative, they have been working across the enterprise to put our climate equity plan into action.

2026 will be the first year of an industrial specialist in the group to target large greenhouse gas emissions.

We are addressing the opioid epidemic by ensuring residents, organizations, and businesses have the tools and support they need to reduce harm and save lives.

Through strong partnerships with the county and state, we're strategically aligning opioid settlement investments and implementing a comprehensive harm reduction approach focused on prevention, treatment access, and community safety.

Our harm reduction efforts are making a measurable impact across Minneapolis through syringe mitigation.

More than 2600 26,000, excuse me, 2600 needles were safely collected by way of 311 requests, sweeps, and kiosks.

Between January and June 2025, 752 boxes of nasal Narcan were distributed through vending machines, with another 233 boxes provided by the medical, the mobile medical unit in September and October.

Since June of 2024, 213 Bruxati injections have been administered through the M Health Fairview Emergency Department program with record participation in September of 2025.

The MMU has also played a vital role, attending 16 events, engaging over 700 individuals and providing direct care, including wound care, health screenings, and treatment referrals for more than 100 people.

Key initiatives include the syringe abatement, Mountain Naloxon Saturation, the Medical, the Mobile Medical Unit, and Albrexadi Project.

Our Minneapolis Healthy Living Initiatives, we're preventing chronic disease by partnering with schools, clinics, hospitals, workplaces, and community organizations to create lasting healthy changes.

Our work focuses on tobacco prevention, mental well-being, mental well-being, physical activity, and nutrition.

This year we strengthened the Minneapolis Commercial Tobacco Ordinance, setting a $25 minimum price for vapes and limiting where they can be sold.

Thank you to the council for making that possible.

Eight organizations adopted trauma-informed principles to better support employee well-being, and our Safe Routes to Schools program earned the National Vision Zero for Youth Leadership Award.

To address food insecurity, we completed a 10-month food resource navigator training with seven community clinics where Fairviews Navig uh where Fairview's Navigator alone conducted 166 consultations and 65 referrals, helping connect residents to healthy food and brighter futures.

Our emergency preparedness and infectious disease program.

We're strengthening public health preparedness by investing in community partnerships, trainings, and effective communication to ensure Minneapolis is ready for any emergency.

This year, we engage residents at seven community events, renewed seven partnership agreements, and shared preparedness updates with over 8,000 subscribers.

Our team supported two active responses and took part in four preparedness trainings and exercises while continuing to refine operational plans and collaborate across work groups, building a more resilient and informed community community, ready to respond when it matters most.

The epidemiology team continues to follow up on protussis, varicella, and foodborne illnesses, conducting close to 100 investigations through the through early October.

The EP team is also working closely with the Hennepin with Hennepin County on measles contacts follow-up and continues to provide support to the Minneapolis Public Schools on infectious disease and other health-related issues.

The EP team provides ongoing support to the health department on program evaluation, data analysis, and or interpretation.

Our public health infrastructure program, we're building a skilled and resilient public health workforce by investing in education, leadership, and green career pathways that promote equity and sustainability through partnerships with multiple community programs.

We're helping youth explore careers in green green construction, solar energy, sustainable, land care, and energy efficiency.

So far, 230 youth have participated in career exploration activities.

206 have earned or worked towards credentials, and 110 have taken part in specialized education programs, empowering the next generation to lead in both public health and environmental sustainability.

Uh, by investing in workforce development and community partnerships.

This year we launched the we launched the Professional Pathways Institute for staff, the public health pathways program, excuse me for interns and the community institute for partners.

Over 100 staff completed REI groundwater training, more than 90 trained in health literacy, and 12 enrolled in the accredited new to public health program.

We also hosted five equity learning sessions with 159 participants, supported six community-led health uh public health projects, and provided hands-on experiences to 13 interns, building capacity and advancing equity across our public health system.

Through our home uh homegrown Minneapolis program, we're supporting Minneapolis in growing, distributing, and enjoying healthy, sustainable, locally grown food while reducing waste.

Key initiatives include community-led homegrown CLI projects, the Food Forward 86 Food Waste Event Series, the urban farm and garden community ownership and garden lease programs, and collaboration with farmers markets through the Minneapolis Food Division.

This year, 14 community uh projects were funded.

Uh 400,000 in USDA grant funding was secured uh for composting and food waste reduction, and the urban farm and uh garden community ownership program was launched, strengthening local food systems and sustainability efforts.

And so lastly, uh the Minnesota Health Department had a budget reduction target of 2%.

Uh nearly all of our funding supports either personnel or contractual services.

The vast majority of our proposed reduction came from contractual services in order to preserve staff.

Uh there is a one FTE reduction in the school-based clinics and to health uh personnel.

This position reduction is funded 0.5 by general fund and 0.5 from a grant.

That concludes my presentation and open for questions.

Thank you for that presentation.

Commissioner, colleagues, are there any uh questions or comments?

I'll recognize um Councilmember Palmisano.

Thank you, Director, for this presentation.

Um when I was looking at the report beforehand, I was disheartened to see the loss of an FTE for school-based mental health um counseling.

I think that our schools need more of this, not less.

And so can you just share with us a little bit about how you came to this decision and thoughts on how we can make up that ever widening gap that this kind of thing leaves behind?

Yeah, it's uh it's a situation that we're currently working on with the administration.

We're hoping to be able to salvage um an FTE through some other means.

Um we're currently working with the administration uh to hope to be able to rectify that.

Okay.

Um and then as listed as a risk back on slide six.

Um can you uh I see the health department is one of the biggest losers in the threat of loss of federal funds.

Um how are you and your team preparing for that?

Yeah, Councilmember Palmasano, Council uh Council Chair Chuck Dye.

Um we have a contingency plan that we're working on.

We have a team and so as the grants um become more vulnerable, um, we pull the team together along with HR and LEGO uh to figure out how best to manipulate and maneuver around those potential grant reductions.

Uh, we really haven't seen that as of yet, um, but we're keeping our eyes on the ball because it's potentially could be happening.

So we're in conversations with the mayor's office, um, our legal team and HR so that when those situations do arise that we are able to respond to them.

So we have a team internally that works on contingency planning for those grant programs.

Thank you.

And then can you be a little more specific about the impact of loss of about 300,000 of contractual funds for next year?

Where will those be taken from?

Yeah, we have some strategies that we're thinking about.

Um we're working with the administration right now to to figure how best to mitigate any of those losses.

Uh and so we're in constant conversations with the administration to try and reduce any of those losses.

So we have some strategies that we're thinking about that we're working with the administration.

Thank you.

Um before we continue with discussion, I'll note that we have been uh joined in this committee meeting by uh Council President Payne.

Um next, I will recognize Councilmember Vita, followed by Vice Chair Koskey.

Thank you, Chair Chaptai.

Uh thank you, Director for I mean, Commissioner, I'm sorry, for this uh presentation.

Could you elaborate a little bit more on Councilmember Palmasano's question about the specifics on those contractual services?

Like what who do you know like some folks that we're contracting with or like the sort of services that we're gonna be losing?

There's a variety of um services that we'll be losing.

A lot of those are um some of those are in our maternal and child health programs, some of those are uh around our immunizations.

Um we're hoping to be able to um to provide some of those services through some other means, uh, one of those being our MMU, if we can.

Um and so we're thinking about some other strategies right now, but those are there's a variety of spaces where those contracts will be impacting.

Thank you.

Can we get a staff memo, please, for um the specifics on what this 291, like the loss of whatever for this, just so we know the impact and the you know the specific programs that I think is super important to know what we could be losing with the 291.

And then also you kind of spoke to it a little bit, but just wondering if you could possibly partner with OCS.

I know they have that um the trauma dollars, and like does that fit for the the one FTE we're gonna lose in the school?

That's a huge impact, and I don't I don't think we can um we can afford to lose uh such a important service right now.

So just wondering if you did kind of touch on it a little bit that there will be some um contact with other departments to try to figure out, but like I know they just give out a lot of contracts for um trauma-informed care and then uh opioid crisis response funds too, kind of fit into a large pot of money that they have over there, and just wondering if, and if not yet, when will there be conversations about how we can get money from these other departments?

Uh Councilmember Vintar, uh Chair Chucktai.

Um all options are on the table.

We are looking um to mitigate this uh this loss in a bunch of different ways.

Um so we're not saying no, we're open to uh any opportunities to collaborate to um to salvage any of the services that we're providing.

So all options are on the table.

Thank you.

Thank you.

And next I'll recognize Vice Chair Koskey.

Thank you, Madam Chair.

Thank you, Commissioner, for the presentation.

Just a quick question about um the special revenue expenses.

I noticed in the budget book increasing from about 15 and a half million dollars in 2025 to about 20 and a half million dollars in 2026.

I I just wondering if you can just elaborate a little bit more on you know these additional dollars, where are they going, like where are these expenses going, and can you explain in detail what this increase funds and which programs it the expense covers?

Councilmember Koske, uh Chair Chukta, I would would love to provide that to you and and a memo.

Oh, sure to council.

Yep, no problem.

Um most of those are through grants that we've received.

Okay.

Okay.

I can I'll forward the question to the clerk so that they have it.

Thanks.

Wonderful.

Thank you.

Um I am not seeing anyone else um seeking to be recognized, so I will thank you for your time and ask the clerk to file that presentation.

Thank you.

Wonderful.

And next we will welcome the a presentation from the youth coordinating board.

For that, I will invite Executive Director and Groot to join us and begin that presentation.

Thank you, Madam Chair and members of the committee.

Appreciate being here today.

I'm Anne DeGriud on the executive director of the Minneapolis Youth Coordinating Board.

And let me just say that this is our 40th year in operation in the city of Minneapolis, and working with our other joint powers partners.

This is the uh Hennepin County, the Minneapolis Public Schools, and the Minneapolis Park and Recreation Board.

Before I talk about the youth coordinating board, I want to talk about our kids.

Um we in the city of Minneapolis are about 85,000 young people and children, ages zero through 18.

So that's about 20 percent of the people who live in Minneapolis.

If you add the 18 to 24 year olds, we add another 60,000.

So about one-third of our residents are young.

We're a pretty youthful city.

It's a very diverse group of citizens in the city of Minneapolis racially, and in terms of where people come from.

People in our city come from all over the world and speak a number of languages in their home.

And I know this isn't news to you, but I want to say it because I know you're not the only people listening to what I have to say.

And one of the things I want to remind people of here, because it is being heard more broadly than with you, is that in addition to all of the things that our young people are dealing with in their lives, some normal things like homework and doing the dishes, and some things that are much more difficult: not having enough to eat, not having a place to live, dealing with violence in their homes, et cetera.

They are now this year also dealing with the threat of being deported or approached by masked people who might deport them or harm them or their family members.

And I know you know that, and I know you're doing what you can as a city council about it, but I want to remind people that that is that this is happening.

At the Youth Coordinating Board, we're working very hard to help our young people and youth work professionals know what to do if that should happen.

And it is just another stressor our young people feel, and it's just another threat to their well-being, which is of course what we're concerned with is their well-being.

Let me tell you a little bit about the youth coordinating board and what we do.

We work in three areas.

We work in early childhood.

The funding for early childhood comes from the state of Minnesota.

We work in family friend and neighbor care.

Some of you will have received, all of you should have received an invitation to screening we're doing tomorrow for a documentary called Dreamcatchers.

This is a documentary done for public TV of the early childhood care, the childhood care system in Minnesota, which we should be very proud of because it's actually a pretty good system, at least it is right now.

And that is something that we worked with the producers on, and it features one of our great child care centers in Minneapolis up in the north side called LaCrush.

So I hope you are able to come tomorrow.

If not, we can get you the film so you can take a look at it.

I think it's going to be great.

Well attended.

Secondly, we work in the area of youth development.

Most of our work here is in after school, and we work with our after-school providers throughout the city to make sure that they have the training and the resources that they need to be able to work with our young people.

They are now facing threats from cuts from the federal government.

We've never had enough money for after school programming in the city of Minneapolis, ever.

But now we have much less.

And the threats are that we will be having way less.

The big amount of money that comes to everybody in the country for after-school programming is called 21st Century Community Learning Center grants.

And the federal government has held those, and we're not sure what they're going to do next.

But if we lose those, many of our programs will lose lose that money.

And our youth engagement work primarily centers around the Minneapolis Youth Congress, group of 8th through 12th graders who we're very proud of in Minneapolis, who help us understand what the perspective is of young people in terms of the work that we do.

Want to invite you to their oath of office, which is going to be November 13th in the atrium.

They all step up and they swear an oath just like you do.

It's not the same oath, though, because I wrote theirs, so I can tell you it's not the same.

But it's a wonderful event, and they come, they're very serious about it, and they do their work for the whole year.

We also do some work in the outreach area, primarily now our work is in training, and we also do some event outreach events for young people.

Here's our chart, our organizational charts, pretty simple, it's pretty flat.

We have a board of 10 elected officials, including Councilmember Koske and Councilmember Jenkins from the City Council.

They come together and they're a governance body.

They hire me.

They've kept me.

And we have sat, we have six staff people who work here.

Three in the different program areas, I thought, one in each of the areas.

And we have a communication staff, an accountant, and a strategic planning specialist who support those areas to try to get our work done as efficiently and effectively as possible.

One thing I want to say about our work is our work is a systems change work or social change work.

It is not programmatic work in the in the kind of traditional sense.

We don't provide things to people, we provide systems change work.

And one of the big areas we're working in right now, it'll show up later a little bit, but I might as well say is we understand from our from our young people that what they're concerned about is their safety and well-being.

So we are doing the job of coordinating and bringing together people from our four public jurisdictions to look at the area of safety and well-being.

And we are asking them to help us think about how, as a group of people who are tasked with ensuring that our young people and our children are safe.

How do we bring all of ourselves together to bring our resources and our brains, which is a resource, together to help make that better?

How do we have a better ecosystem for that?

Okay.

Everybody's working, they're doing great work.

We all do really good work, but a lot of times we're working in isolation or working without connecting to each other.

So how do we come together?

So that's a big thing that we've been working on.

We had our first big convening on October 1st.

We have another one December 3rd.

The focus of that convening is mental health, which is always the number one issue for young people.

So I talked about the youth congress.

Last year we served 30 young people.

We're starting our new cohort this year.

There we go.

They do a variety of things.

They reviewed the 21st Century Community Learning Center grants for the Department of Education this year.

That was a great project for them.

They have met with Hennepin County staff to support the awareness of the Youth Stabilization Center at 1800 Chicago Avenue and give feedback on that.

Judge Felman, who is the presiding judge of juvenile juvenile court, invited them to come to court and watch what happens in juvenile court, and they did that.

They sat in on some hearings and they learned from him what happens over there.

And they've been participating in the Metro Line Transit Blue Line Extension Project, among a number of other things that they have done as a youth congress.

They divide into committees.

The committees do tremendous work, but these are some of the things that they have done.

We would invite you, in addition to being part of their oath of office, to let us know if you'd like to come see them and talk with them in the course of your work about what kinds of things you might want to know from them that might interest you.

Our after-school work, big part of our work.

We use some of the money that the city allocates to us to help fund some of the after-school programming in Minneapolis.

And this has been really important to them, especially as they have seen cuts in their programming.

We give money to Minneapolis Community Education, which is through Minneapolis Public Schools, to the Minneapolis Park and Recreation Board, and also to the libraries for the Minneapolis Teen Tech Centers.

They have provided over 5,000 hours of programming with that funding.

They have 64 community partners with that funding, and they have served over 6,000 young people.

That's a duplicated number at this point, trying to sort that out a little bit better for you.

But we also provide training, we provide networking for them, and we bring them together so that they can share their own resources so that they're not all working in isolation either.

Our outreach team provides hard in the paint hoops basketball camps in the summertime for young people.

We do four of them.

You can see one at Brian Coyle Community Center, one at Phillips Community Center, and two at Camden High School in the summertime, and we have served this summer 169 young people through that.

I can tell you this, there's some state money there wasn't before, but it's running out this year.

I can also tell you that there isn't anyone coming in to pick it up.

People say, well, just write a foundation grant.

They're not picking it up.

I just should let you know that.

But so funding cuts are really a risk.

And programs, so that leads to programs having less stable funding.

So they have less money to offer free, so they are they they offer less programming to kids, especially kids who can't afford it.

And we have staff leaving the field.

It's not unlike early childhood in a way.

There's not as many stable jobs, and there's not as many benefits.

But the bottom line for all of this, really, is that the safety and well-being of our children's at risk.

You think about kids on release days.

If their parents have to work, what are they doing if they don't have something to do that is structured where they can go?

They have our wonderful parks and they go to the parks.

But not all kids go to the parks.

So what happens?

Their safety and well-being is at risk, and we need to be constantly thinking about that.

So a few things, other things you may have heard about about us.

I just told you about this the Forum for Safety and Well-being.

This is a convening we're doing.

You've probably heard of child friendly cities, and at some point it'd be great to come back with the health department and talk more about what we're doing in that area.

We're working on our second designation, which we will get.

The film, The Dreamcatcher, Stories Eliminating Barriers for Children and Families premieres tomorrow at the library.

We're creating a resource contact directory, which we're calling the phone book.

You all remember phone books?

Yeah.

And we've just updated our website.

So I hope you take a look at that.

And I think I'll end it there with qu if people have questions, because otherwise I could really talk for a long time, and I know your time is limited.

So please feel free to ask any questions or make comments that you would like to make.

Thank you.

Colleagues, are there any questions related to this presentation?

I will recognize Council President Payne, followed by Councilmember Rainville.

Thank you, Vice President Chugtai.

Thank you for this presentation.

I was curious.

I know last uh community connection conference, we had a really big workshop with uh with the board, and I thought it was just like a really great way to just get a lot of people involved and have that intermingling of elected people, everyday residents, and some of our youth leaders.

Uh knowing that that has been cut in the current budget recommendation, what would be the typical venue to get that type of collaboration, or is there no other type of venue than that?

And and specifically, what would be the costs that we need to be considering of uniquely bringing that type of event together outside of the context of the community connections conference?

Yeah, committee chair and and uh council member.

That's a really good question.

Um we are going to miss the community connections conference.

That's a big loss.

We had in fact been talking with neighbors and community relations this year about having a bigger youth presence and the ability to do more of that this year, and it's just not going to happen.

It's not realistic given the kinds of costs that there would be associated with bringing that together.

Um we are hoping to have some kind of a youth summit.

As you may know, the libraries, the parks, schools, number of other organizations have youth-led, well, youth-led um advisory type groups, sort of like the youth congress.

So we would like to really bring them all together, but it would really be youth-based.

It would not necessarily be other adults, there would not necessarily be adults in the room like there was at that event that you that you were at.

And that event was very helpful to us.

I mean, it gave us information we didn't get anywhere else.

So to be able to replicate what you're talking about would cost quite a bit of money because we would need space, we would need food, we would need to bring people in.

Um, and I just don't see it happening in the same efficient way that that did.

I could see us bringing our funds together to bring young people together because we do have some ability to do that, although it it would take some different kind of energy behind it.

So the loss of the community connections conference is significant for us and our ability to do exactly what you're talking about.

I thank you for that.

I I mean it really highlights you know, NCR leads the community connections conference, but it's not strictly an NCR activity.

I mean, we're getting a lot of overlapping goals being met by bringing that many people and that many city departments together.

I think the alternative would be a youth summit, a public safety summit, a public health summit, all of which would cost probably on par to the one out-of-pocket expense of the one community connection conference.

So I think that's something that we really need to take into light as we think about this budget.

So thank you.

Yes, Council President.

Thank you for that question.

Thank you.

Uh next, I'll recognize Councilmember Rainville.

Thank you, Chair.

Uh Mr.

Groot, uh, thank you for your time today.

And I'm sorry if I miss this, but how much do we contribute to your budget out of all the entities?

We be in the city of Minneapolis.

Yeah.

Madam Chair and Councilmember Rainville.

Um, the joint powers fee is not going to get exactly right, but it's almost $90,000.

It's about it's 89 something.

I don't have it written down here with me.

And then there's a general fund contribution of about $360,000.

So 90,000 from each agency.

From the three of our joint powers members contribute 90,000, and the park board contributes about 20,000.

Because they're our smallest entity.

And then the City of Minneapolis contribution is $360,000.

In addition, through joint through general.

In addition to the $90,000.

That's correct.

So a simple answer might be $450,000.

Yeah.

Great.

Thank you.

That's right.

And that is about what the county also contributes.

And the PowerPoint only does 20,000.

Yes.

Thank you.

Wonderful.

I'm not seeing anyone else in queue.

I will thank you for your time and ask the clerk to file that presentation.

Thank you all.

Thank you.

With that, we are now ready to move to our next present presentation, which is from the information technology department and uh and the technology improvement plan.

For that, I will invite our chief information officer, Paul Cameron, to join us and begin that presentation.

Thanks, Elvis.

Good afternoon, Chair Chugtai and members of the budget committee.

I'm Paul Cameron, the CIO for the city, and I'm here to present to you the mayor's recommended 2026 budget for the IT department.

There are no new budget requests included in this presentation.

After this presentation, I will be presenting on the technology improvement plan or TIP.

The IT department is part of the internal services area of the Office of Public Service led by Deputy COO Saray Garnett Huhouly.

The IT department is comprised of eight divisions with 108 FTEs recommended in the 2026 budget.

On the org chart, you can see the breakdown of FTEs by division.

All the divisions report to me.

The divisions are infrastructure, security services, project management office, enterprise resource planning, enterprise data and solutions, business services portfolio, customer support and relations, and vendor management and contract services.

The mission of the IT department is to deliver reliable and secure technology services across all departments to serve the residents of Minneapolis.

We have three priority objectives.

The first is maintain system health and security.

The city enterprise utilizes dozens of major business systems.

We proactively monitor, maintain, protect and secure city technology systems and data to ensure reliability and performance with minimal service disruptions.

The second priority objective is workforce enablement.

We look to equip city employees with the tools, technology, and support they need to work efficiently, collaborate effectively, and deliver high quality public services.

The third priority objective is enterprise platform adoption.

We promote consistent use of city-supported enterprise platforms to improve collaboration, efficiency, and data-driven decision making.

This also allows for greater transparency and information sharing.

We invest in the people, skills, and outreach related to our major platforms.

So I'd like to take a couple minutes to share some of the performance measures we have in Outcomes Minneapolis.

The first two measures are related to maintaining system health and security.

The first measure is looking at our major systems across the enterprise, which is around 30, and whether we are keeping those systems up to date.

We try to look at these systems holistically.

In addition to the current software version, we also evaluate the underlying hardware the software runs on, the contract status, and how well the vendor is keeping the software current.

Our goal is to have 100% of major systems on a current release or have a plan in place to achieve that.

Around three quarters of our systems are current, while the other quarter have a plan in place.

The second measure is looking at our network and server availability.

Our goal for network connectivity is uptime of greater than 99.9%.

We are meeting this objective.

Our goal for servers is 100% uptime.

We fell just short of that over the last year.

The next performance metrics I'd like to cover are related to workforce enablement.

These metrics are most directly related to the IT service desk, but are linked to the IT department's overall effectiveness in supporting the city.

They are fairly standard measures for an IT call center.

Our goals for these measures are at the high end for the industry.

We are meeting our target on three of these metrics.

The first call resolution metric is one we are a bit short of our target.

This is an area where we are continually looking at performance improvements around this.

So moving on to achievements and risks from the last year.

I'll highlight a few themes now and provide additional details on these as I discuss the individual budget programs.

The first theme I want to cover is platform modernization.

We look at platforms as a shared system that supports multiple processes or departments.

Examples include our enterprise analytics hub, where we consolidate data from individual systems.

This platform includes our data analysis and visualization tools.

Other examples include the two biggest projects I'll talk about in the technology improvement plan, our ERP platform, which is our core HR finance and payroll software, and our 311 CRM platform.

Other examples would be our website platform and Elms are the city's enterprise land management system.

The goals for platform modernization are consolidation of systems, migrating to software as a service where appropriate, and improving our cybersecurity posture.

It also helps us control costs, focus our support skills and knowledge for the most benefit across the enterprise, reduce the footprint we need to protect from a cyber and data security standpoint, and allows for sharing of ideas and lessons learned between departments.

Next on the list is cybersecurity, which is also listed as a risk.

As a department, we are continuously investing in our cybersecurity efforts in a variety of ways.

This includes additional layers around publicly accessible systems.

One of the most recent additions is partnering with the state of Minnesota using their whole of state cybersecurity plan.

We are also investing and expanding our security awareness training for employees, helping them identify social engineering attacks.

In addition, we are partnering with the communications department, 311, and others on a public awareness campaign related to social engineering attacks targeting residents of Minneapolis.

We are continuing to improve our identity and access management processes and tools.

This helps us approve efficiency, reduce errors, and allow staff to grow skills in new areas.

The last theme I want to highlight, where I'm proud of the work we've done as a city is the numerous facilities projects.

I feel like IT and property services have really grown this year and how we collaborate as more and more technology is put into new and updated facilities.

The team has worked on the first precinct, City Hall Restack, Grain Exchange for MPD, the Lake Street Community Safety Center, the Hawthorne Facility, and planning for the new third precinct community safety center.

Moving on to risks, the two I've listed are multifaceted in their impact.

Cybersecurity tops this list and was also identified by the emergency management department as a high risk for the city.

Mitigating this risk in some fashion is baked into almost all of the work that we do.

There are three main areas of cybersecurity I'd like to highlight.

First is ransomware.

This is the most well known threat that we face as we read about it in the news on an almost daily basis.

The scope for this risk is increasing as we rely more heavily on technology.

Ransomware generally involves stealing data or locking systems and holding them hostage.

The second risk is because we are a government.

We manage infrastructure and provide services that could be a target for bad actors.

The third risk is one I alluded to earlier social engineering attacks against our residents, where bad actors are impersonating the city in an attempt to have residents pay for something.

The next risk I want to highlight is the pace of AI evolution.

AI is a topic that feels like it is everywhere right now.

There are two aspects of AI I'd like to discuss.

The first ties back to cybersecurity.

AI is being used to increase the sophistication of attacks as well as decrease the time it takes for information to be turned into an attack.

The social engineering attacks against our residents are examples of this.

The second area I want to highlight around AI risks is related to the city's adoption of it.

This mainly shows up around data protection.

I would characterize this as a tug of war between enabling AI tools for city employees while also protecting city data.

The IT department would like to promote ethical, non-discriminatory, and responsible use of AI.

So moving on to the budget details.

The information technology department has a recommended 2026 budget of approximately 48.2 million dollars, a slight increase from 2025.

Each color on this chart represents the type of expense with contractual services being the largest.

Other expenses represented include salaries and wages, operating costs and fringes.

The contractual services number include enterprise software licensing costs as the majority of that expense.

The next slide shows a different breakdown of the IT budget, this time by program.

We have three programs in the IT department workforce enablement services, infrastructure services, and decision support services.

We'll cover these in more detail in a few slides.

I do want to note that the larger size of the workforce enablement services and infrastructure services programs reflect where we account for software, hardware, and managed services contracts.

We currently have 11 vacancies, nine of which are in some state with HR for hiring.

I do have a breakdown of where the 11th positions sit today.

Three are in the interview process.

Two are being reposted for a second time.

One is nearing posting, and then one will be posted as a promotion.

Two are in the JAQ process, and then two of them are part of an internal reorganization.

Next, I will go through each of the program areas and highlight goals and accomplishments.

First is the decision support services program area.

The goals for this program are to enable strategic decision making across the city through the use of timely data, analytics, software platforms, and expertise, improve transparency and communication with the residents of Minneapolis, protect the privacy of residents, and provide collaboration tools and support to the city enterprise to enable innovative solutions.

These teams have been involved in a myriad of efforts, both large and small to help the enterprise.

We've partnered with city departments on 35 new public interactive dashboards, a 40% increase over 2024 and a 150% increase over 2023.

One in particular I would like to call out is the 911 recent events dashboard, which has received over 116,000 views since being published in mid-April of this year.

The team has also implemented a new integration tool with six workflows created so far.

We've completed over 150 enhancements to our ServiceNow platform for internal city processes.

These span multiple departments, including HR, public works, and clerks, in addition to IT.

We've designed new workflows in the enterprise land management system to align with the new processes, including prolonged vacancy enforcement, rental protection inquiry, ambassador snow and ice removal, and cannabis licensing.

As of yesterday, we went live with five departments on an enterprise scheduling and time tracking tool.

Moving on to the infrastructure services program.

The goals for this program are to enable a stable, secure, and responsive technology environment for the city by providing the hardware, software, systems, computing devices, and support.

They also provide a friendly place for city employees to go for technology help.

The division, the divisions in this program are at the core of how the IT department supports the enterprise.

For the outcomes and accomplishments, I wanted to highlight a few things from these divisions.

We've retired an outdated document management system.

This was a big one for the city and involved collaboration with almost all city departments over the last couple of years to complete.

The system had been in place for over 20 years and was both expensive and time consuming to keep running as well as a cybersecurity risk.

We've continued to work on our ongoing cyber on our ongoing security awareness training for employees and are now expanding that to include a public awareness campaign.

We're implementing more robust identity and access management processes.

This ties to the layered security approach I talked about earlier, and is part of the preparatory work we're doing for the ERP project.

Over 900 devices were donated to PCs for people.

These devices are refurbished and provided for free or at low cost to underserved communities in Minneapolis with the goal of providing affordable computer access for all.

We are continuing to consolidate mobile device management.

This will improve our data security posture, reduce our reliance on vendors, and better align upgrades with the refresh cycle.

We've also increased our on-site support at the tech hub.

This is an point.

This is an appointment and walk-in location on the 10th floor of the public service building for hands-on technical support for employees.

We've seen a big increase in use over the last year.

And lastly, we've resolved over 10,000 incident tickets and service requests.

I want to take a moment to acknowledge that this is the 10-year anniversary of our deskide and service desk teams being insourced.

Having these teams as city employees has made a big difference in how we as a department provide service to the enterprise.

The third program in IT is the workforce enablement services program.

The goals for this program are to provide administration enhancements and support for citywide applications, lead organizational improvements through strategic initiatives and project management, manage citywide enterprise contracts to realize savings and increase productivity, and provide process and operational efficiencies to support the evolving needs of the city while upholding fiscal responsibility.

Moving on to the outcomes and accomplishments.

Our main focus this year is getting a better handle on how we intake non-standard requests from other city departments with goals of providing quicker initial responses, more transparency throughout the process, and better aligning and managing resources across the IT divisions.

We've completed over 25 major new implementations and upgrades of software systems.

Complet work on over 75 contracts and contract amendments year to date.

We've partnered with 911 to configure their system to support an embedded social worker, and we've partnered with property services and MPD on the new first precinct building with expanded roll call room technology that spans all five precincts.

We did have one reduction in our 2026 budget related to our food and beverage operating costs, which is highlighted on this slide.

One of the bigger drivers for this was the retirement of the document management platform I mentioned earlier.

As I wrap up this presentation, I want to acknowledge the dedication of the IT staff to keep the city functioning.

We are often a group that operates behind the scenes.

I hope you get a sense of the impact this team has across all parts of the city, and I'm proud to be leading this team.

Thank you for your time today.

And I can now stand for questions or continue with the tip presentation and save questions till the end.

We'll pause here and see if there are any questions before continuing to the technology improvement plan presentation.

Thank you, and thank you for this presentation.

And I guess I should say thank you for last week forcing me to go through cybersecurity training because I clicked on one of those emails that I shouldn't have thinking it was a constituent email.

I do see cybersecurity as one of the biggest threats to the entire enterprise from your perspective, and without giving away sensitive information.

Can you help us understand a little bit more on how you're preparing for that?

Yeah.

Chair Chugtai, uh, Councilmember, thank you for the question.

Um I think as I mentioned in the presentation, um, I feel like this is something where uh we don't implement a project or uh look at a system without looking at it through a lens of cybersecurity.

And so that consolidation of systems approach.

Um I think maybe more specifically the program with the state of Minnesota that I'd mentioned uh will bring in some new tools that will provide additional layers of production protection in addition to what we already have from uh an endpoint protection, but also from uh threat monitoring, and so kind of getting more real-time information on what's happening within the environment.

Um, I think those are the items uh that come to mind right away.

Thank you.

Thank you.

Next, I'll recognize Councilmember Rainbow.

Uh thank you.

Could you please reassure me that we're doing things a lot different than St.

Paul and they're thus their ransomware problem?

Yeah, uh, Chair Chugtai, Councilmember.

Um I had a best answer this.

Um having talked to people in St.

Paul quite a bit about this incident and have a tremendous respect for what they're doing.

I will share with you that there is no way to guarantee that we can be completely safe.

Um the fact that we are connected to the internet, um, new vulnerabilities are discovered on a daily basis, and the speed of those is increasing in which those risks are turned into attacks.

Um what we can try to do is to educate our employees around the ways in which social engineering attacks can happen.

Um we can work to prevent those things from happening, and then if something does come in to limit the spread of that happening.

So, one of the concepts, and I'll this maybe adding on to Councilmember Palmasano's question around what else are we doing.

There's a concept within security called zero trust, which is basically no one should trust anyone from a security perspective.

And so when we think about like where we were 10 or 15 years ago, we had, and sorry for the getting more into the weeds on this.

Um, uh, what I would classify as a very flat network, in which once you sort of got through the firewalls, you had access to sort of everything.

Now things are much more compartmentalized, and so the idea is that it will just take longer for someone to sort of uh work their way through all of the compartmentalization that happens.

Um I I hope that answers your question, but um, I also don't want to uh provide a false assurance that um these kinds of attacks are completely avoidable.

Thank you.

Thank you.

Um and then I just had a question for you, Director.

Um I am seeing in your presentation that you have 11 vacancies in the department this year.

Um I I remember this was a number that caught my attention, so I went back and looked at your presentation from last year where uh the department had 12 vacancies.

Um so I'm wondering if you can just speak to whether the generally speaking, these are the same positions.

Um I know you mentioned there's there's a couple of positions that that have to be reposted.

Um so uh is it is it the same ones or is it an entirely different set of of uh 11 vacancies from last year?

Yeah, Chair Chugtai, thank you for the question.

Um I don't have the exact list in front of me to compare to what was there last year.

Um I know that some of them were probably there last year.

Um I think we have been going through and trying to provide uh more detail opportunities to people, which will sort of result in sort of pushing the positions down into different areas that we've been moving through.

Um we have uh struggled with some of them to get candidates to accept offers for the positions, which you can see for the reposting of a couple of them.

Um then uh there were a few, I believe the ones related to the ERP program where uh had been held open in some cases for a couple years.

We are moving forward, and I believe those two are in the interview process right now.

Um so just from kind of where we're at.

I think we had we had one in which someone had turned down an offer, and so we're we're kind of moving on from there.

So awesome.

Um I think then I'll have the clerk's note for administrative follow-up if we can have uh director Cameron get back to us with the vacancies and comparing them to last year.

Um I think that completes the uh discussion and questions for this section of your presentation.

We're ready for you to continue with uh the technology improvement plan whenever you are.

Uh thank you.

Um I'll transition to the technology improvement plan at this point.

I'll start with some background on the program before providing more detail on the budget numbers and the projects that are included.

The technology improvement plan was started in 2024 as a way to better plan and budget for large major technology purchases or upgrades.

Ongoing maintenance and support costs will be included in future years of the IT rate model.

Finance and IT review requests for eligibility and financing, and then the city adopts a six-year technology plan, which will cover the years in this case 2026 through 2031.

Only the 2026 dollars are appropriated.

Projects in latter years are included as part of the long-range financial planning.

The executive information technology and data steering committee receives, reviews, and deliberates on technology budget requests.

This allows finance and IT to refine previous cost estimates, scope, and timeline in supplemental budget years.

So this slide contains the projected costs for the six years of the technology improvement plan.

I will have additional slides for the 311 login replacement, enterprise resource planning, Telemi building blocks, and the Loring Greenway rehabilitation.

The other projects you see on this grid will go through a formal tip review process next year to determine need and priority.

We have included them here for transparency around the potential longer-term projects.

Uh, these projects were identified by IT as areas where either hardware or software investment could be needed in future years.

The non-information technology projects also do not go through the TIP process.

This is an example of how the city can leverage the permanent improvement levy as an alternative to the general fund or bonding.

This determination is made by finance and the budget office.

Uh the first project I would like to present is the 311 CRM system replacement.

Uh this project started out uh out of a constituent services work group, which in turn was initiated by a legislative directive.

The initial funding for this project was in 2025 through the TIP process.

Our current 311 system is challenging in many ways.

You have heard about some of those challenges from Director Nizimbe.

I would like to highlight the collaboration across the enterprise around this project.

We had 21 departments involved in the requirements process for the RFP, and eight departments had team members aside assigned to the RFP review process.

Some of the goals that the team is working towards are to improve transparency and accountability to residents, aggregate and streamline service requests, enhance data management, and support more resilient system integration, enable better mobile accessibility, implement a more comprehensive knowledge management repository, and facilitate effective collaboration across the enterprise and ensure equity and accessibility.

The project team is nearing the end of the procurement process, and we are hoping to begin implementation in early 2026.

We expect to finish the implementation in 2027.

The funding requested for this project is $2 million in 2026 and $2.5 million in 2027.

The total amount requested is $4.5 million over two years, and this budget supports the software costs during the implementation as well as the implementation costs itself.

So the next project I would like to present is the Enterprise Resource Planning or ERP project, which we've also branded internally as Project Evolve.

This project will modernize our city's HR finance and payroll systems and processes.

Our current system is one you know of as Comet.

We've received we received initial funding for this effort in 2023.

I'll highlight some of the main goals we have around this effort.

All of these items cover multiple business lines and departments.

A key aspect of why these are challenging today is that our current system, while the same software for both HR and finance, is actually two separate instances with over five years between implementations.

There isn't a unified data model, and users for the overall system are managed separately.

With the new system, we will have improved and streamlined business processes and workflow, enhanced data reporting, consolidation of multiple systems and integrations, and improved user experience and system navigation.

This is an effort the city has been working on for several years with positive collaboration between the internal service departments of HR, Finance, and IT.

We have also included the park board through our early planning and evaluation processes with a goal of integrating them more holistically into the system than we have with our current platform.

We signed a contract with a software provider earlier this year.

In late summer, we published an RFP for an implementation partner and are in the early stages of that procurement process.

Our goal would be to start implementation in the first half of 2026.

This would allow a go live in several stages from the end of 2027 through 2028.

The funding request through TIP for this project is $3.5 million in 2026, $7.6 million in 2027, and $5.5 million in 2028.

The total amount requested is $16.6 million over three years.

This budget would broadly support three main areas of expense.

The first is the software costs during the implementation period.

Second is backfill and staff augmentation for HR, finance, and IT.

And last is the implementation partner.

The third and last technology project I'd like to present is Telemi Building Blocks.

This is a project initiated by the regulatory services department with a desire to move towards a more proactive enforcement of rental properties.

The initial funding for this project was in 2025 as part of TIP.

The goals for this project are to provide a greater understanding of housing and building stock as well as improved data for enhanced enforcement across a variety of scenarios.

We do have a contract in place, and the team is currently working through testing and validation.

The funding requests through TIP for this project would be $71,000 in 2026.

This would cover the remainder of the implementation and licensing costs through implementation.

The last project I'll present is the Loring Greenway systems rehabilitation.

This proposal addresses much needed electrical and water infrastructure repairs along the greenway, which serves as a key corridor for people walking, biking, and taking transit in our city.

The project's goal is to support a more equitable transit system and improve mobility services, something residents have voiced as a clear priority.

We are requesting $1.5 million in 2027 for this work.

While the request originally came through the operating budget process, we've shifted it to the permanent improvement levy within TIP, which is a more traditional and appropriate funding source.

We presented on this last year to the council, and it was adopted in the plan for TIP.

This approach also provides public works with two years to prepare for the investment and align it with long-range planning.

So thank you for the opportunity to present the technology improvement plan today, and I will now stand for questions.

Thank you.

I'll recognize Council President Payne.

Thank you, Vice President Chug Tai.

I I went in the queue last time and then I realized you were doing a separate presentation on the TIP and my questions around the ERP project.

I know that we had originally in our this year's budget reduced that funding.

And the and the original risk to that was that it would push funding further out, and we are currently in further out.

And I I know that we did have a meeting earlier in the year about being able to leverage a master service agreement with the state to start to continue that work despite that funding cut.

And I was just curious if you give us a status update, because I what I see in today's presentation is that the funding request didn't increase substantially as a result of that.

And so it seems to me that we were able to absorb some of that through that state MSA, or could you just remind me about how how we were able to continue that work forward?

Yeah.

Um Chair Chugtai, Council President, um thank you for the question.

Um we uh so we did sign through a state contract uh with the software vendor.

I think what has happened over the past year um is we have now better visibility into for sure into the software contract itself.

Um one of the the goals of negotiating the contract um earlier this year was to um lower the costs over the first three years through the implementation of the project um as much as possible because of knowing what was happening with the budget, and so um I think our estimates that we had in the proposal last year were higher than what we ended up signing that contract with.

Um I think in addition, uh as we are closer now to the implementation partner, we've taken a really really hard look at where we think the dollars are going to land from a budget year perspective, and we've tried to be as um specific as possible to not over budget in a given year in order to roll that money over.

And so that has resulted in us kind of shifting some of the dollar amounts out a little bit further.

That's really helpful.

And now that I recall in our conversation, there was you did float the risk that you may have to come back and do an additional budget request depending on how those negotiations unfolded.

So I'm really happy to hear that you were able to um just really tightly manage that project.

So thank you.

Thank you.

Um other discussion or questions.

Not seeing any, so I will direct the clerk to file that presentation.

Thank you so much, Mr.

Cameron.

Um our final agenda item, which is a report relating to municipal revenue.

Um for this presentation, I will welcome up uh director Andrew Hawkins from the legislative research and oversight division um to present on this item.

And and as you're getting your presentation up, Director Hawkins, I will note um that we have uh been joined by um President Brandt from the Board of Estimate and Taxation, who has been um anxiously awaiting this presentation.

Welcome.

Thank you for coming in today.

Uh Director Hawkins, whenever you're ready.

All right.

Uh Chair Chug Tai, members of the committee.

Uh, my name is Edward Hawkins.

Uh, here on behalf of legislative research and oversight to speak to you uh today about uh municipal revenue.

Um I believe everybody has a packet, and as you'll see in the file, there's two different components to this.

Um the slides that I'm gonna be covering today um are in reference to a couple of the pieces from the staff direction that related to the city.

Um taxes that the city is able to collect, kind of city structure um items.

I then do um touch on some pieces from uh guy the uh materials that guide house produced for us that look at uh nine other comparable cities and start to get into some more um revenue stream options that we can the city can consider.

All right.

So again, just for background, always include this uh so people understand why what brought us here uh this request.

Um going back to the end of 2024, actually, um, has uh since actually come up through both BET and this the council um to build out a couple um additional pieces that I think BET wanted to see.

Um so we're always happy when we can um incorporate items and ensure that this is gonna have the largest uh impact and scope um for the most people.

Now the crux of this request was getting into what the city can do without property taxes.

So obviously the first place I'm gonna start is talking about property taxes.

Uh, the reason to do this is just to make sure that um we kind of cover the landscape and understand um some of the nuance and complexities that are inherent with property taxes themselves.

So um looking at uh the property tax level burden, um right now the national landscape uh there's a trend of uh like it's not many this is uh certainly not Minneapolis exclusive um issue um that we're facing is that the share that property taxes make up um for general funds.

Uh general fund dollars across cities nationwide um is trending upwards.

Cities have become much more reliant on property taxes are primary um or at least one of their major sources of revenue.

Um the reason for this is generally that's similar to Minneapolis, um, states have started to really clamp down on what uh municipalities are allowed to do with property taxes.

This includes um putting in uh limits on how um how much levies can be increased, um limitations on how the process of cities have to follow to increase um any property tax levies and then locking in place any uh assessment uh the reassessment of property value um over a period of time.

So again, just for a number of reasons.

Um like this has become kind of a central point of focus.

It's also obviously something that every resident of the city that owns um you know the property is going to feel.

Um one of the other issues with property tax uh fluctuations to property valuations and due construction impact the stability of property tax um as a reliable and consistent source of revenue, um as we've seen recently, um again, for reasons that often can be outside of a city's control.

Um you can have large market fluctuations that are gonna substantially change the taxable base that a city has to pull from.

Um looking at property tax, and honestly, probably anything across the board in relation to this, cities have to account for any adverse impacts that are going to contribute to any tipping point type issues.

The idea behind this is obviously you can raise tax to a certain amount before there's going to be some adverse impact, whether that's you know for individuals' ability to pay, whether it's for residents that can no longer afford homeownership, um, people you know who have the mobility to do so considering you know relocating elsewhere because of a tax burden.

Um so understanding with any of these um what those different tipping points might be extremely important because again, you don't want the it's the the positive of having more revenue that's for the city to work with is one thing, but you don't it's it's good to know what the opportunity cost is going to be.

Um then the chart on the right is actually pulled from uh the city's budget book.

Um and if if for anybody with the electronic version, if you click on it, it'll take you there.

Um but uh it's use that just to highlight that again.

Absent additional revenue sources, uh property tax for the city of Minneapolis will make up over half of the city's overall revenue in the coming years.

At least that's the current projection um track we're on.

Um and then as you see, not only does it become more than 50 percent, but it will continue to grow year over year.

Um for this one, this is a 2025 property tax levy burden.

Um something that again not necessarily exclusive to Minneapolis, but um but also something that again it's not quite as widespread across cities, just given the different way that um uh local governments are structured across the you know uh states nationwide.

Um I don't know that you know individuals always are aware.

Um absent, you know, looking at the chart that's in our budget book or asking the question um where are property tax revenues for the city of Minneapolis go.

Um I think there's there's often a misconception that 100% of what's a Minneapolis property tax is coming to the city to fund city programs.

Uh in reality, that's not actually the case.

So I have the breakdown that I'm using the chart from the budget book.

But again, uh the largest chunk there, that's 17, seven, very patriotic 1776 uh for the park board is uh is the largest portion that's being taken for an entity that's not the city.

But then even once you get into the funds that are coming into the city, those are still broken down uh for bond redemption, permanent improvement, uh pension-related, uh teacher retirement association, and then you'll have uh when you get to the general fund, you're all already you're down to 65%.

Now uh moving into non-property tax revenue.

Uh so for this slide, I I do want to start by noting we had a uh a larger roll down charted to get it to fit.

I had to uh merge and move some things, so I need to change two amounts.

Um I'll amend this and sure the clerk can update the file.

But those two for local government aid and municipal state aid.

Um local government aid is actually uh 81 million, and then the municipal state aid is uh five million.

So I think the numbers that were there were tied into two other things that we had that got removed, but everything didn't align.

So I did want to make a note of that.

Also, these uh items aren't intended to be an exhaustive list, but just to show um where Minneapolis is pulling some of its intergovernmental revenue from.

I think this is something that also, I mean, even outside of the property tax conversation has been the topic of discussion due to a lot of changes at the federal level as far as what funding is available, what funding is no longer gonna be available.

So I don't know that one could make a fair assumption that the state will just step in in lieu of the federal government.

So this is definitely something that I think we're gonna want to keep an eye on.

Obviously, from the federal side, we get a lot from uh housing and urban development is um as one of the primary sources of funding.

Um two to touch on, I know it was something that came out in the landscape analysis, but um comparison to some of its other peer cities, the city of Minneapolis is um slightly more reliant on um federal, state, and local government revenues as a source of income.

Next, we're gonna look at special use taxes.

Um so Minneapolis currently has an entertainment tax uh that is three percent citywide.

Uh that can apply to admission fees, um, sporting events, concerts, um, it uh lodging, sales during the events.

Um, and I did note again it's a it's interesting to kind of read what qualifies and what doesn't because everything all the way down to pub games like um pool and darts uh is somehow covered.

I'm not sure how the city's collecting that, um, but the fact that those are noted was of interest.

Um for things that are not cat uh currently covered uh by this uh 3% entertainment tax, um, any transportation fees, so anybody that's traveling to or from any of the events, uh there's no 3% addition that's included on that, and then athletic health and golf clubs uh or facility fees is not included.

The city also has a lodging tax of 3%.

Um it is a 3% on just room rental expense explicitly.

So there's also a state requires a city's combined lodging tax cannot exceed 6.5%.

Uh and then also just to get an idea for sort of where these are right now for 2025, the entertainment tax is budgeted to bring in uh 26.9 million, and the lodging tax was budgeted at uh 8.6 million dollars.

Next, uh the other additional tax that Minneapolis has is a Minneapolis downtown taxing area.

Um this is an additional three percent that applies to a restaurant and liquor sales within the boundary that you can see outlined in red.

Um the biggest issue with this, and I believe this has been something that the city's identified as a legislative priority.

I'm not sure where it's at um this year, but when this map was drawn, I believe the city of Minneapolis looks slightly different.

The thing that's the most notable with this map is that the Minneapolis downtown taxing area was intended to tax um again, essentially entertainment districts.

Um one of the city's more recent entertainment districts is almost entirely cut out.

Um that's the North Loop.

Um so obviously the issue that you have there is that um in the span of one block, there could be venues that are operating outside of that 3% tax, whereas you know, one block in the other direction um they're gonna be subject to that tax.

So just something to identify.

I'm sure if we sat here and everybody drew a circle around what they thought was downtown, they would all look different.

But I don't know that anybody would draw a map that looked like this.

Next, um we get into license and fee revenue.

This is something that exists across any city that um we're gonna look at.

However, for the city of Minneapolis, uh, this is the biggest, this is currently I think our biggest bucket as far as where we're bringing in the most revenue.

Um, which is looking at some examples of this, it's uh we have charges for services, those are services that are provided by the city that can include water, waste, utilities, um inspections, our charges for sales, uh I think that one matches up with exactly what it sounds like, just uh the sales of equipment parts, uh supplies, and things like that.

Um, our licensing and permitting.

Um obviously there's a very you know wide range of licenses and permits that are required for different things, um, like also brings in 46 million.

Um looking at that in the two different categories for non-business licensing and permits, um, that can be again building, planning, plumbing, mechanical, that's that 31 million, and then uh rental housing, liquor beer sales, food, business, and amusement or in the business licenses, uh, that's 14.9.

And then finally, the um something that most people are familiar with if you especially if you own a property, um, special assessment fees are currently at 34 uh million dollars.

Um next, uh so for all of these services, um most of them primarily there's gonna be license fees um that are established by the city.

These usually come up for review annually.

Um just have an example of um one of the sheets that you've probably seen come before you recently for the proposed 2026 license fees.

Um the fee schedules are broken down into very broad categories.

Um I think the last I was looking, the city had more than like more than 600 at least.

Um so again, I'm sure it's a lot to review, but it's something that comes up from time to time.

Uh, there is currently a fee study that's also being done to kind of see where these fall in relation to comparable cities.

Um but the most familiar ones that people are gonna know would be parking ramps, lots, and meters.

Uh, that's 41 million dollars that are brought in by that.

Obviously, that's something where you know with the tipping point, you can increase it to a point.

But you know, if it gets up too high, then individuals can't afford to park.

If it's if it's too low, you're missing out on revenue.

Um and lastly, for this section, um there part of the request was to look at um departments that were funded.

I actually believe it was worded uh departments that were funded outside of the general fund.

Um and so what I'm gonna note here is that from digging into some of this and and like starting to pull out some of these pieces, it seemed easier just to identify what is on the general fund because almost you know almost every department in the city is has at least one or two different funding sources that it's pulling from.

Uh and it can often be extremely complex.

Sometimes those funds are gonna be exclusive to the service that's being provided.

Sometimes it's gonna be more of a general fund that can get moved around.

Um so tracing all of those back is certainly something that is worth worthwhile, but it would create probably more confusion for the purposes of a presentation.

Um I'll also note that uh for some of the just because a group is not listed as general fund only, doesn't mean that everything's equal as far as how much of their budget is being funded through again one of these other government funds, whether it's special revenue, capital projects.

Um I think the actually city clerk is a good example uh because when this came up I had asked our city clerk, and I think I believe he said that the um outside funding that's captured for the clerk's office is something that we get uh for running the printing center, and it's like a couple thousand dollars.

So that's obviously gonna pale in comparison to some of these buckets that might be you know millions.

All right.

Now to get into our national landscape.

There's a lot on this slide.

Um I will note too that on this one, the municipal state aid was copied over from the previous one, so that's actually five, not seventeen, but local government aid is correct.

Uh the reason I put this together, it's almost deliberately a lot.

And the whole idea is to show why it's a massive challenge to compare municipalities, um, apples to apples, because you know, every city is structured differently, every city has access to different resources.

Uh, they might operate in different um environments as far as regulation.

Um, and so cities, you know, it falls to the cities to best design um you know a revenue stream and revenue options that match you know their individual circumstances.

So again, while this is by no means exhausted, um, just pulled out some um uh items for comparison from Minneapolis to Kansas City to Boston.

Um so some of the things that you'll see that are very different.

Obviously, Kansas City, um, there are limitations uh from their truth in taxation policy that's a limiting factor on them increasing their property taxes.

Uh so that's uh that base for them is a lot smaller than what we're gonna see.

Um however, they have a 1% city earnings tax uh that's taken off of, I believe it's any resident of Kansas City or anybody that's earning that more that income is earned in Kansas City.

Uh, that brings in 373 million dollars to offset um their shorter intake of or their smaller intake of property taxes.

Um again for the city, you just saw me go through all of these.

Um just kind of highlighting some areas where there's very large discrepancies that again could be looked into further.

The hotel and motel tax in Kansas City is 36 million, whereas um what we brought back for the lodging tax, um I think I think puts budgeted in 25 was 8 million.

So I'm not sure again uh what are they doing to pull in you know the significantly more revenue from um their lodging tax.

Um looking at uh there's also the marijuana tax sales in both sides.

Again, those buckets are extremely different.

Um you would expect Boston as a bigger city to be higher.

It's not, um, just based on the way that the states uh regulate and allocate the funds to municipalities in each of those locations.

Um that is something that I know is rolling out in the state, so something to keep an eye on as far as what they impact is for the city.

Um also Boston has Logan International Airport.

Um they have a tax on, I believe it's uh I can't remember a couple percent on uh every gallon of fuel that's sold at the airport, so that's a $57 million, or sorry, 40 million dollars that they're bringing in.

They also have it's essentially I think a pass-through tax where the state's levied its authority um to do a tax in lieu of uh property tax, and that's through the motor vehicle.

Um it's $25 per $1,000 evaluation, so every vehicle in Boston has to pay that.

That generates $59 million.

Um so again, just the way that the cities work with the state, the way that counties work with the state, um it you know, it really does make it hard apps and standardization to do sort of that apples to apples because obviously with a county and a school district and um and a city operating in the same space.

Um there's a lot of room for overlap, and how the house services are provided, isn't always gonna be seen as an apples to apples thing.

All right.

Now getting into our national landscape comparison.

So um we had worked with Guide House to review um it's actually nine comparable cities and plus Minneapolis is 10 to identify similarities, differences, um, where there might be opportunities to look at um different revenue sources and kind of what those structures would look like in the city of Minneapolis.

This comparison required the data to be standardized, as I alluded to in the previous slide.

Just because again, all those complexities and available revenue sources.

So the data source that they used has a good formula and like a complex methodology that is able to accomplish that.

And then I will note, again, as a further encouragement to read through Guide House's deck that everybody should have based on the city council's direction and input on high priority revenue generating strategies.

All right.

So just to highlight from, and this is all also available in Guide House's preliminary report, but a summary of findings, and I'll just these are in italics because I just pulled direct quotes, so I didn't want to misrepresent anything.

But again, they found Minneapolis is relatively more dependent on intergovernmental revenue as a share of total revenue and generates less revenue per capita than most of its peers, and which indicates an opportunity to expand and diversify owned source revenue.

Minneapolis also can increase revenue generation by implementing new strategies inspired by peer cities.

That one's just building on that, you know, that lower generation per capita that we're seeing.

Leading examples that they observed of revenue generation strategies included land transfer tax, various forms of income tax, business tax, congestion pricing, excise tax, uh payment in lieu of taxes, and service fees.

Minneapolis is dependent on property tax revenue, indicating an opportunity to diversify its tax portfolio within the limits of state law.

That last part's going to be really big because what we are allowed to do by state law is very, very narrow.

Um compared to a lot of other cities, uh Minneapolis is very restricted in terms of anything that even starts to resemble a tax becomes an issue at the state level.

Um just to highlight a couple pieces from uh the Guide House report.

Um of the 10 cities that were reviewed, Minneapolis uh ranked ninth in per capita revenue.

Um so I think only Minneapolis was at uh $7,500 and three dollars per uh per capita, whereas uh Kansas City was the only city that came in lower at $6,578.

Um just a couple other ones just to indicate where the scale was at.

Um Atlanta was 8,135, uh, Seattle was up to 11,000.

Um looking at the next one, uh, Minneapolis ranked 10th in per capita revenue generated from taxes alone.

Um so the closest uh Minneapolis came in at $2,421 per capita.

Um the next uh in ninth was Kansas City with 3,239.

Uh that scale keeps going up with Portland at 4,266, um, Seattle at 5,167.

So obviously there's uh was quite a bit of space between um where the city sees itself now and where some of those cities are operating.

Um Minneapolis does have relatively higher property taxes um rates compared to pure cities.

It was third out of 10, um, and it does face limitations again with how much we can increase these rates without seeing some adverse impact.

Um however, the thing I will note uh too, I think Minneapolis was 1.25.

Um the one the only cities ahead of it, Kansas City was 1.37 and Portland was 1.68.

Um another area of complexity with this is that again there are some cities where we see high property tax or we see low property tax rates, but a high property tax bill because this is gonna always um correlate to what the property values are in a certain area and how they're applying the tax.

So again, um having a higher low property tax rate doesn't necessarily equate um you know on a direct basis to a low property tax bill.

Um and then last, Minneapolis was fourth out of ten in per capita revenue uh from charges for public services, um which I talked about being one of our bigger buckets.

Um we did see a couple cities that were coming in higher.

We were at $2,000, Seattle was at $2,400, uh, Denver 3,700, and San Francisco was, I think, all the way at $5100.

All right.

Um so right here I wanted to pull out obviously this is all provided in a lot more detail um in Guide House's preliminary report where we can actually get into some examples.

I'll touch on some now.

Um but these are the three main buckets where you know revenue sources are gonna come from, um, taxes, charges, and miscellaneous revenue.

Um for taxes, again, looking at you know, like some of these different options that I've mentioned before.

If we want to look at specific programs uh for excess our excise tax, um, this would be something like a beverage tax.

Uh the city currently has uh it was plastic bags, I think it's maybe expanded to just bags in general.

Um so things that are targeted at one specific um, you usually a specific item or activity.

Um the income tax, uh I touched on Kansas City having that 1% earnings tax, uh, Philadelphia also has an income tax that's related to funding its schools.

Business taxes, Seattle actually had two of the most kind of discussed examples for this where they had their payroll tax for companies for individuals that were paid over a certain amount.

And then they also have a percentage base tax on businesses that ties into the city's social housing work.

The land transfer tax is increasingly common.

It's also been referred to as a mansion tax.

New York and San Francisco are the two kind of notable examples there right now.

Looking at pilot, pilot stands for payment in lieu of taxes.

This has been an increasing source of revenue for a number of cities.

Boston is sort of the primary one in this space right now.

Again, it's been a number of years and they're kind of continuing to revise it, but it basically stemmed from them realizing that half of their potential tax base was exempt.

There's obviously with Boston, there's a lot of schools, hospitals, you know, things that are going to be outside of tax collection.

But those all of those organizations were still still leveraging city services, roads, emergency services, things of that nature.

So Boston came up with the formula.

They did a again a lot of work group and a lot of collaboration with these with these organizations to figure out what their potential tax bill would be.

And then in order to offset that, they did um they have a formula to acknowledge again the public benefit from the opera from the existence and operation of those entities.

So you know, Harvard, Boston, you know, Boston College, Boston University, like so that offsets uh like that total payment, and then they come up with what's left, which is their pilot um payment.

As far as how you know that that operates not being a formal tax, it's sort of works on an honor system.

They make everything public so um you know, residents, whoever's interested, can go look and see what percentage of that um dollar amount each organization that falls under the pilot program um has paid to date.

Um I will note too for Kansas City, I think they had a much smaller amount, but um they've started they I believe started to look at kind of something similar as well.

So uh under recognizing that our options are limited when things start to resemble a tax because of the voluntary nature of the pilot program.

I think that one operates outside of that space.

Um and then last, the empty homes tax.

So that is something that the city has, you know, but it's more in relation to abandoned uh homes that I think is more focused on blight.

Um but there are some cities that are looking at empty homes and taxing them since obviously that impacts you know your your house, your available housing stock.

And so whether that's you know, um seasonal residences, uh homes that are uh being used for again the VRBO and like things like that.

Um, but like it's I think cities have realized that there might be an opportunity there um to track and um receive some revenue from those.

Looking at charges uh real quick, just congestion charge, New York did it, everybody's heard of that one.

If as far as going into the area of recommendations, uh that one likely requires federal approval because it's gonna touch um roads and department of transportation, which I think right now is probably viewed as a limiting factor.

Um asset monetization is just looking at you know what do we currently have in the city that's you know that we could be leveraging some kind of income from, outdoor advertising was one that's talked about there.

Um service fees you've already heard me discuss, um, and then miscellaneous revenue, special service districts, which we're already um currently operating, um, or betterment levies.

Uh very often we see these um apply to cities where parks um operate within the scope of the city as a department.

All right.

Challenges and opportunities, and this is my last slide.

Uh so again, challenges.

State laws and regulation.

Um I started by talking about it, and we're gonna finish by talking about it because it's inescapable.

That the current the state is very, very restrictive on this, and so at the you know, to the extent the city wants to pursue some of these, it's gonna be important to figure out what's going to be palatable at the state level to get the approval to go forward.

Uh capacity and structure, beyond just putting something in place.

Uh, again, like I'll use the pilot program as an example.

You know, like either what capacity and structure does the city have to collect the revenue, or if it doesn't exist, what is the capacity and structure look like?

Um so what would we have to build out?

Because obviously, if it's anything in addition to what we're currently doing, um, does that how is that cost offset by what we're gonna be collecting?

Um, and then again, the adverse impact.

And so for that one, like I said, for you know, as prices go up, there's gonna be behavioral changes, you know, in another area.

So it's just something with each with each of these, considering you know the entirety of the impact is gonna be a point of um emphasis.

Um, however, uh looking at opportunities.

I think that we can um again that identify potential high revenue options for additional review, um, and then we can discuss those further in November.

Uh, but also again, like just considering the city's legislative priorities.

It's one thing to go forward with a new tax that we're proposing, it's another to bring again that map.

Um, you know, to just like it's something tangible that they can see and potentially understand that like this, you know, that what we've called downtown and doesn't necessarily reflect what anybody else might view as downtown, um, and that it's putting, you know, it can it's putting other businesses at a disadvantage and incentivizing potential development and operation and explicitly in certain areas of the city.

Um and then last, uh monitoring related work that uh may impact city revenues or how city allocates its money or its funds.

Um so with the the one I'll note there's an ongoing fee study uh that's currently underway, and I did link to the led directive just to uh reference.

And then additionally, I think this is in very early stages and they would have to speak to it directly, but the uh the city auditor has their workforce optimization and comparative benchmarking study that I think is uh again the intent of uh looking across at the landscape of other cities and how they're doing this and how resources and uh funds are allocated compared to how we're doing to see if the city is low, high, or otherwise.

Um and then additionally, I mentioned it earlier, but the continued rollout and implementation of state cannabis um regulation revenue collection and um if whether or not the money that's received from that will offset anything for the city.

With that, um I'll conclude my presentation.

I'm more than happy to stand for any questions.

Thank you for that presentation, Director Hawkins.

Um I understand that you will be returning back um before this body to further discuss with us um along based on um based on some additional work that needs to be done um following this preliminary report um about the feasibility of some of the specific um tactics or or uh taxation tactics that have been identified so far.

Um so I want to note that uh for colleagues as we begin discussion.

Um I see two members in queue, so I'll recognize Council Member Cashman, followed by Councilmember Palmasano.

Thank you, Chair Chugtai, and thank you, Director Hawkins.

I just wanted to start by um thanking you for all of this great information.

Um I think it's gonna be useful, you know, not just for us, but for a lot of um other people in the city, park board, board of estimate taxation, other levels of government who are grappling with these questions.

And um I wanted to express to the city council to my colleagues that I have been supportive of expanding the downtown taxing boundary, and I know uh representative Igbaj has carried a bill on that, and I think it's really wise for us to expand into the North Loop, but I did support lowering the food and beverage rate from three down to 2.5% because I feel that for downtown residents, a lot of the restaurants like we don't have a lot of um uh grocery stores downtown, so restaurants are a source of food, and so having a higher um tax on food in restaurants downtown, I think is per makes downtown a more expensive place to live.

Um but I just wanted to ask you a couple questions about property tax exemptions in the city.

Which types of buildings are currently exempt from paying property taxes.

And did you look into if any of the other cities have modernize that or change that over the years in terms of um religious or nonprofit institutions paying property taxes?

Um Chair Chucktai, uh Councilmember Cashman.

Um offhand, I don't know um what the city's current definitions are outside of the traditional um you know, like entities that we'd see with um like higher education, hospitals um and nonprofits.

Um I know there's an application process, and like I think our assessor actually maintains um, because that's what I was using, just to sort of get a base um for what was exempt and so going through it.

Um those are the three main buckets, but I um I can certainly look into that and get and respond back um via follow-up.

Um I think it is I mean, even looking at Boston, um the way that they went about their pilot program, obviously one of the you know, I think things I mentioned was um religious organizations, um, churches aren't included in their pilot program.

It looks like it's explic it's explicitly um working with universities, uh hospitals, and then I believe there's a um certain categories of nonprofits, like the I think the Philharmonic is one of the ones that they get um a pilot payment from.

So uh if that's something the city wants to look at, then I think getting that list and figuring out how we're doing the classifications and whether or not that needs to be revisited is definitely a logical step.

Thanks.

And then did any of the other cities that you looked at have a land value tax, which is something I know the state legislature has proposed and move forward that would enable Minneapolis to do that.

I'm not gonna be able to remember offhand who it was, but yes, uh like there's definitely cities out there that have um again in the uh land value taxes, um and I'm sure I'm trying to think there's one other that's escaping me that was very similar.

But as I mentioned, this is uh we're not the only you know, that we're not the only people experiencing the same issue right now.

And so cities you know across the country are currently trying to look at you know um every other potential revenue source they might have because um you know the the continued increase of the levy as as our you know source as our main source of income isn't sustainable.

Um so yes, I know I do know that that is something that's in place and I can figure out uh exactly where um and if you want me to follow up with that.

That would be great.

Yeah, I would appreciate that information.

Thank you so much, Chair.

Thank you.

Next I'll recognize Councilmember Palmasano.

Um thank you for this presentation.

A couple of clarifications.

We I don't believe special service districts provide the city with any additional revenue other than the services that they are buying up and paying for, right?

But where you did you mean that they could be like we could basically upcharge them?

Um no, sorry, um good point of clarification, uh Chair Chuck type Councilmember Palmasano.

Um so special service districts um more broadly, but I actually think this is still the same to the city.

Anything that's um allocated or brought in like has to apply to the district itself um directly.

So I can't remember if uh in the city if we're currently leveraging any revenues from them, but there are other cities that operate special service districts where there's a some degree of a revenue generating component that then is used to fund the special service district.

Um I see.

So they're running at a profit in other cities and we're doing this as a pass-through type service.

I believe so.

Yeah.

Um also you mentioned plastic bags.

That five cent fee is charged and kept by the business.

That's not a revenue stream that comes into our city.

Are you suggesting that in other cities that the bag fees go back to the city somehow?

Yep.

Uh I that that is correct.

Um so again, I I know firsthand from living in uh Washington, D.C.

when they passed it, it was used to I think the clean up the Anacostia River was an explicit fund that they had established uh for that fee.

So I don't know if that's something the city can explore.

Um but it's certainly again how what it looks like across municipalities is obviously not the same.

Yeah.

Um that brings me to my interest in the challenge you list state laws and regulation.

Um does Minneapolis have any authority to pursue a new tax or other income revenue option without state intervention.

Um I'm gonna cautiously look at our city attorney and who can jump in if I uh like start to dive into any areas that uh I shouldn't, but uh like I think I'm gonna keep it pretty high level.

Uh from like uh from the preliminary look at this, uh anything that be you know that we consider a tax um or that's applied in the same way that a tax would be applied, we need to go it requires state approval.

Um so I think that that is something where the city's very limited outside of what it currently has and is collecting.

So as far as other sources of revenue, I think that's more open-ended.

Uh like I said, with with the pilot the way that other cities have done the pilot um collections is that it's again, it's voluntary, so it's not a tax.

Um it's you know the businesses are willfully paying in um because they're benefiting from city services that they may not be paying for um through the traditional tax method.

So that's gonna um the the voluntary nature of it is what um is getting those in place in cities um that have pretty similar laws to what we have here.

So pilot taxes might make sense for like the unit colleges and universities that you mentioned, but in my understanding, pilot were about things that we don't really have here in our city, like DNR land, state parks, um watershed management entities and that sort of thing.

Is that also your understanding?

So it's gonna depend by city how much of an actual base they have for pilot.

Um in the city, you know, in Minneapolis, just looking through the, you know, we do have a decent amount of exempt, it would be a matter of having to kind of figure out exactly what buckets those are in.

Um we have you know, the the university one, like depending on how much land, you know, the U has it's something that you could you could probably scope out fairly easily in terms of what we're what we're looking at as far as cost, you know, revenue you know, participation-wise.

Um St.

Paul uh recently, again, it's not not an apples and apples thing, but uh I believe that the tax at St.

Paul or the increase in the levy that they had approved um last year, the year before, um the justification for it was in part that they have a high volume of university and state government um land in St.

Paul that was out that obviously was not a usable tax base.

Um so again, whether or not that's a complete correlation or just a you know a talking point is not for me to decide.

But uh, I mean it is fair to say that there's a good volume of land in St.

Paul that's um that would fall into the same situation that Boston had.

Uh so where the city's at, I think again, uh it would be easy enough just by pulling the the exempt rolls um, because I believe that has usually the square footage or the frontage of the property um as well as the estimated values of the property um are assessed as well.

So outside of pilots, again, the cer uh the city's main you know revenue generation is gonna be the service, the services provided.

So the services and the fee schedules, which like I said, I know there's currently um work going on to look at what those how those compare to other jurisdictions, but that's something that again the city council would have uh more control over because those come back to you for approval every year.

Um so if there are some outliers or some areas where we're just not collecting what we should be, um it's worth the discussion.

Um I'll also note too that even you know there to the extent that we can collect something and the extent to you know to the extent that we are uh may not be in perfect alignment.

Um I'll also note too that even you know there to the extent that we can collect something and the extent to you know to the extent that we are uh may not be in perfect alignment a lot of these again it's uh they can be very resource intense like um intensive to collect um everything that the city might be able to I think that right now um the rental lodging tax um and how that applies to Airbnb um VRBO type rentals um I'm like I don't know um I I know that's been a point of conversation so that's something that again there's um better places in the city of Reg Services to speak to it uh than myself but um I think it's it can be hard to track um all of those especially if they're operating outside of the city's um current um uh rental home permitting system okay thank you wonderful council president payne thank you vice president thank you for this presentation and I also just wanted to thank President Brent for joining us and helping uh initiate some of these conversations on the board of estimate and taxation also wanted to thank Councilmember Wandsley who brought forward the initial staff direction it was later refined um uh to represent the fact that we were doing this in a more collaborative way with the board of estimate and taxation but I think this is just really critical work as we look to the future because uh I don't think we can depend on just a pure property tax levy anymore in the way that we have historically done that and I'm looking forward to working especially with um chair of IGR Councilmember Chowdry on uh maybe doing some power mapping all around where the state legislature is in terms of some of these really tactical recommendations that were brought forward so just really appreciate this work wonderful with that we have concluded the discussion on this item we look forward to having you back in November I will ask the clerk to file this presentation um and with that we have concluded all business to come before this committee today and without objection we are adjourned until our next meeting which will take place on Monday October sev 27th at 10 a.m where we will receive our final set of departmental presentations prepared by uh the climate legacy initiative and the city's capital budget.

Thank you everyone