Good afternoon.

My name is Oreen Chowdry, and I am the vice chair of the committee of the whole.

I'm going to call our call to order our regular committee meeting for Tuesday, October 21, 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 will ask the clerk to call the roll to verify the presence of a quorum.

Councilmember Payne.

Present.

Wandsley is absent.

Rainville?

Vita.

Present.

Ellison is absent.

Osman is absent.

Cashman, present.

Jenkins.

Present.

Chick tag.

Present.

Koske.

Present.

Palmasano.

Present.

Vice Chair Chowdry.

Present.

And Chair Chavez.

Present.

There are 10 members present.

Let the record reflect we have a quorum.

The agenda is before us.

Are there any amendments to make?

I will call on Council President Payne.

Thank you, Chair Chowdry.

I would like to amend the agenda add item number four, which is a resolution uh recognizing administrative support for the Board of Estimate and Taxation.

Second.

Great.

With that motion to amend the agenda and a proper second.

Um to add that item.

All those in favor say aye.

Aye.

Those opposed say nay.

The ayes have it, and we will take that item up at the end of our agenda.

First, we will begin with the reports of our standing committee before our consent agenda.

I will first call on the vice chair of the administration enterprise oversight committee, Vice Chair Palmasano.

Thank you.

Um The Administration and Enterprise Oversight Committee is bringing forward 16 items for consideration on Thursday.

The first is a professional services contracts ordinance.

Item number two is a gift acceptance for transportation meals and lodging, as is item number three and four uh for city staff.

Item number five is a contract amendment for the first Avenue South Sanitary Sewer Reconstruction.

Item number six is a contract amendment for the convention center concessions remodel.

Item number seven is a contract for ready mix contract concrete.

Item number eight, a contract amendment for the Fremont Avenue South Sanitary Pipe Replacement.

Item number nine, a contract amendment for lead service line replacements.

Item number 10 is a contract amendment for Hawthorne office build out.

Item 11, a contract for the second street North Sewer Improvement Project.

Item number 12 is for the Boston Terrace Sanitary and Storm Sewer Improvements.

Item 13 is a bid for the convention center's Mill City Kitchen Concessions Remodel.

Item number 14 is a collective bargaining agreement.

Item number 16 is a big one.

It's master contracts for workforce development services for the next two years.

And these are just eligible uh contracts.

This isn't something that we are authorizing at this time.

I'm happy to try and answer any questions.

Thank you so much, Councilmember Palmasano.

I have Council Vice President Chugtai in Q.

Council Vice President.

Thank you, Madam Chair.

Um I'm wondering if um uh council member Palmasano can um just remind us um whether any of the gift acceptances that will be coming forward on Thursday are gifts that have our uh for for the dates that have already passed.

Oh yes, actually I mentioned this uh at the last agenda setting.

The gift acceptance for travel for police chief Brian O'Hara would have passed it was October 9th and 10th, and the reason why it was coming through this cycle was because he was not asked to present until you know whenever it was that they'd have to submit for this committee.

So that's the reason why it is in arrears, so to speak.

Gotcha.

Thank you, Madam Chair.

Seeing no other questions, I will next resign recognize the chair of the audit committee, Council President Payne.

Uh thank you, Vice Chair Chowdry.

Um as you all know, the audit committee doesn't bring actions forward, but uh during our meeting yesterday, we took up uh one, two, three, four, five, six, seven items.

Uh the first two were updates on uh audits with MPD, including fleet management and off-duty work.

Uh, we were expecting MPD to participate in that status update, but they were not available and declined to participate.

We did get an update on our uh off-duty uh audit from our auditing team, uh, but we did not have MPD there.

Uh we actually had a fairly robust conversation about the role of MPD in the audit and their lack of participation in certain audit activities, uh, which resulted in us taking action on recommending that the auditor um issue a letter to MPD leadership, the mayor, and uh city council to outline some of the um roadblocks that he's received and to seek remedy to those roadblocks.

Um we got an update to the uh enterprise risk assessment and risk-based audit plan to amend it to add uh a workforce optimization benchmark study.

Uh we heard from the city auditor on uh draft changes to the audit charter, and we got a report of the city auditor, our standard report, where he shared his uh uh concerns involving NPD.

And I will stand for any questions.

Seeing no questions, I will next call on the budget chair, Council Vice President Chug Tai.

Uh thank you, Madam Chair.

The this council cycle, the budget committee has been hearing departmental presentations from the Minneapolis Park and Recreation Board, the Office of City Clerk, the Office of City Auditor, the Community Planning and Economic Development Department, along with the regulatory services and health departments, the youth coordinating board, and the information technology department and the technology improvement plan.

We've also received a report on municipal revenue from the uh legislative research and oversight division.

Um the committee is not bringing forward any items for the body to consider on Thursday.

Thank you.

Are there any questions for council vice president?

Okay.

Seeing none, I will next give the report for the business housing zoning committee.

Item number one is approving a liquor license with business conditions for the Cedar Inn.

Item number two is approving a fine and tobacco dealer license suspension for campus market.

Item number three was a license revocation for noon restaurant.

However, the clearance letter has been received, and this will be deleted from the agenda on Thursday.

Item number four is considering a combined trade trades license revocation held by PMR Mechanical Inc.

This item was forwarded without recommendation.

Item number five is approving one liquor license.

Item number six is approving 26 liquor license renewals.

Item number seven is accepting a grant for regulatory services to attend the best friends conference.

Item number eight is approving applications for the fall 2025 Brownfield grants.

And the last item, item number nine is authorizing an ownership and opportunity loan for vital 24 LLC.

With that, I will stand for any questions.

Great.

Seeing none, we will go to climate and infrastructure for its report from its chair, Councilmember Cashman.

All right.

Thank you, Madam Chair.

The Climate and Infrastructure Committee is bringing forward six items to council on Thursday.

Item one is a resolution approving municipal consent for MINDOTS University Avenue Northeast Improvement Project.

Item two is a resolution approving 2026 proposed services and service charges for the legacy special service districts.

Item three is a resolution adopting the water and sewer service line repair assessments.

Item four is authorizing a temporary construction easement at 2225 West River Road North.

Item five is a resolution authorizing a grant application for the 2025 local road improvement program for projects on 35th and 36th Street, Lindell Avenue South and First Avenue North.

And finally, item six is a resolution designating the West River Parkway Phase 2 project for the Upper Harbor Terminal, adopting the report and cost estimate related and setting a public hearing for December 4th.

I'll stand for questions.

Great.

Seeing no questions, we will go to our last committee report from for the public health and safety committee.

We'll go to its chair, Councilmember Chavez.

Thank you, Chair Trottered.

The Public Health and Safety Committee will be bringing forward five items.

Item number one is a resolution recognizing the month of October as Health Literacy Awareness Month.

Item number two is approving an appointment to the Homegrown Myanmar's Food Council.

Item number three is accepting the health block grant for internal and child health initiatives.

Item number four is accepting a racial and ethnic approaches to the community health grant for chronic disease prevention.

And item number five is authorizing a contract with the Minnesota Timberwolves for bond detection security services.

I'll stand for any questions.

I don't see any questions.

Before we go into the consent item, I do know that in the beginning we voted to move the walk-on item from Council President Payne to the bottom of the agenda.

I'm going to suggest we take it up as our third item after item number two in discussion and then take our receive and file if there is no objection.

Great, not seeing any objection.

There is only one item on the consent agenda, and that is adopting the 2026 transition calendar for regular meetings of the city council.

Is there any discussion from committee members?

Okay.

Seeing no one in discussion, I will move the approval of the consent agenda on that motion.

All those in favor say aye.

Aye.

Those opposed say nay.

The ayes have it, and that motion has carried.

Now we will move on to the discussion portion.

We have a legislative directive to discuss items related to the enterprise wide salary and compensation study produced by Guide House.

Councilmember Koskey, would you like to speak first on this item?

Uh thank you, Madam Chair.

Thank you, colleagues.

Uh today I'm bringing forward a legislative directive requesting that the mayor provide the city council with the enterprise wide salary compensation study that was conducted by Guide House Inc.

In plain terms, this kind of study takes a comprehensive look across an organization, every department, every job classification, every salary schedule to understand how a pay structure functions and how it compares to the broader labor market.

These studies are standard in government because they give cities a clear data-driven view of how compensation systems are performing and where adjustments may be needed.

They show where pay may be too low to retain or attract staff and where it may be too high compared to the broader market, where compensation has become inconsistent across departments or classifications, resulting in unequal pay or unequal pay for similar work, and issues like compression or inversion, where new hires earn as much as or more than long-term employees, which can erode morale and trust.

In short, these studies help cities determine whether their compensation practices are fair, competitive, and fiscally balanced.

The foundation for maintaining a strong workforce and long-term financial health.

For the council, this kind of information is fundamental.

We are responsible for making budgetary and policy decisions that shape the city's workforce for years to come.

In the short term, studies like this inform mid-cycle and next cycle adjustments, things like targeted pay increases, reclassifications, or updates to cost of living adjustments.

In the long term, they guide multi-year financial planning by helping us understand when it would cost to correct inequities, how to phase those costs responsibly, and how to structure compensation in a way the city can sustain.

And right now they inform the 2026-2027 biannual budget, where salaries and wages make up a significant share of our spending.

Roughly one quarter of all citywide expenses and nearly half of general fund expenses in the 2026 recommended budget.

With that in mind, earlier this fall, I reached out to the administration, specifically the chief operating officer and the human resources director to ask about the city's most recent salary study, our history of compensation studies, and any related information.

Weeks later, we received a summary of the report, not the actual report.

A study in a report that was approved under a $150,000 contract.

I then informally requested that the study in its entirety be shared with the council in accordance with the city's enterprise policy on council administration interactions that we adopted under resolution 2022 R326, which encourages informal requests as the first step before any formal legislative action.

However, after not receiving a response from the administration for another week, the only remaining path to obtain this information, information directly tied to our ongoing budget decisions, was to compel it to be shared.

The city charter is clear.

The mayor must make available to the city council any information we request in support of our legislative policy making and oversight functions.

The charter also establishes the council as the city's fiscal authority, responsible for the budget, financial policies, and overall stewardship of public funds.

So not only does the charter make it clear that fiscally and financially consequential matters like this fall squarely within the council's responsibility.

Once I notified the administration that I would be bringing forward a legislative directive to formally request this information, their response made one thing clear.

They never had any intention of sharing the report with the council and still don't.

The administration asserted that this report cannot be shared because it is classified as non-public data.

That may be true for the public, but we are not the public.

We are the city council.

If confidentiality is a concern, then set up a process through which each council member can securely review the information in a confidential manner.

I don't particularly care what that process looks like.

But considering that the council members have been provided non-public information many, many times before, there are already practices and procedures in place for doing exactly that.

So please do it.

The administration's refusal to provide this information through informal requests has already violated our adopted policy on council administration interactions.

So let me be clear.

If this legislative directive is ignored, that will not just be another breakdown in council administration interactions or shared governance.

It will be a violation of the city charter.

If I sound frustrated, it's because I am.

Because it has become too because it has become far too difficult to do the basic work of governing when collaboration and transparency aren't treated as shared policy shared priorities.

This shouldn't be complicated.

The City Council should not have to fight for access of information we are legally entitled to.

Information that directly informs our work on the budget, on financial planning, and on oversight.

This is about accountability, transparency, and respect for the structure of government our residents expect us to uphold.

I'm asking my colleagues to support this legislative directive so that we can move forward and do our jobs to govern responsibly, make informed decisions, and ensure the people of Minneapolis have a government that operates with transparency, accountability, and sound stewardship.

Thank you.

I will next recognize Council President Payne.

Thank you, Vice Chair Chowdry.

I think it's improper to say I'm happy to support this legislative directive because I'm not happy that we're here.

This shouldn't be a legislative directive.

This should this could have been an email.

And the fact that it has risen to the need for this to be a legislative directive is a reflection of a breakdown in how this new form of government works.

And, you know, I kind of glossed over this in my report out of the audit committee, but I mean this made news last night that the police department was withholding information from our city auditor, which is a violation of the charter.

Um, but this is a reflection of a culture problem where broadly speaking, this administration is withholding information.

And so you know, at the beginning of this term, we had a regularly scheduled leadership meeting with council leadership and admin leadership, including the cabinet and the mayor.

Um the overarching theme of those conversations was that we can either do this organically and collaboratively, or we can do it according to the text of the charter.

Um I my preference is that we work collaboratively and not have to have formal actions taken just to do the business of the city, but um the mayor canceled that meeting, and uh we've been left exclusively with the charter uh as our guide to figure out how we're gonna navigate this new government structure.

So I'm grateful that you're bringing this forward.

I'm disappointed that it had to come to a legislative directive rather than just a collaborative sharing of information so that we can collectively govern and make good decisions and make wise choices as we're going into a tight budget.

But um that that's the broader context here is uh we we we need this information.

It shouldn't have to take big formal actions just to collaborate, but this is where we are.

Thank you.

I put myself in cue.

Um I just wanted to kind of reiterate to those that are kind of listening on and to us as a body and to our city enterprise.

Uh it really it really matters to me that we get this information because this is 650,000 dollars of taxpayer dollars that we approved as a city council to get valuable information to make determinations about our city workforce.

And not only is it $650,000 of taxpayer dollars, it is valuable American rescue plan dollars that we got from the federal government in COVID utilized for this report.

So I was very startled to learn that we weren't going to get this information requested and formally for us to do our business.

I share the sentiment that I'm disappointed and a little frustrated that it would take us using our legislative directive authority to do so as a city council.

We have a very specific bid business interest to this information, whether it is confidential or not.

And we have had several moments on the city council where we have received confidential information and there has been processes in place for us to have it so we can have the discussions that we need to have and make decisions for our constituents and for the health of our city, especially as it comes to budgeting conversations.

Now, I don't see this as a way for us to put uh put conflict um and blame onto uh our administrative staff.

I see this as an on-wrap to correct the situation.

And for us to never do this again.

This is an opportunity through this legislative directive to create that confidential process that council member Koskey has asked for and said it doesn't particularly matter to her what that looks like.

Same goes for me.

This is an opportunity opportunity for us to turn around the situation and take a step towards changing our culture.

I do believe that culture change needs to change at the top as well as it comes to collaboration, but here is an opportunity for us to change and grow and learn from this moment, which I really do believe that we can do, both as a city council and as an administration and as an entire enterprise.

This work is too important not to.

So I will be supporting this item today.

Thank you.

Um I will next recognize councilmember Palmasano.

Thank you, Madam Chair.

Um I guess I'll support this motion because I'm for being able to have access to more information, but I don't see it as being necessary.

Um this really feels like you're politicizing something needlessly here.

And when staff members came up and asked me about this situation in this study last week, um, I asked and was told we could do small briefings on it.

We could um yes, the council has a right to this information, but we're it's not something that is going to be released publicly.

So councilmember Koske is right in that it is non-public data.

Um personally, if this is a 600-page-long document, I don't really see a need to learn every gritty detail to complete our governance role.

I don't think that you bargain and negotiate salaries for non-represented employees.

That's not what we do up here.

We don't get into the weeds on individual employees or individual things.

Um I think that the comments from my colleagues are pretty rich in that last year you literally took away the raises for this set of employees.

So I appreciate that you say you see this as a way to um a path forward and in hopefully trying to give them back some of that salary increase that they were due last year.

So go ahead and take a briefing instead of trying to make some kind of political point.

I think that if you want culture change up here, we need a different level of maturity and less gameplay.

Thank you, Councilmember Palmasano.

I will recognize Councilmember Chavez.

Thank you, Chair Chadery.

I can I get some why does this need to be a briefing and why can't this be made public?

I just need some information on that.

More than half a million dollars from my understanding was spent in taxpayer dollars.

I'm not sure why we're having a conversation of having private briefings, closed door conversations.

It just doesn't make sense to me.

So why is this not public?

That's confusing to me.

I feel like that might be a question that could be answered by our city attorney.

So I will look to City Attorney Abelson.

Thank you.

Thank you.

Uh Vice Chair Chowdery, Chair Chavez.

Um, the information in this study is not public labor relations data under Minnesota statutes 13.37.

Um so that statute covers data that will be used in preparing management negotiation positions uh for compensation both for represented and non-represented employees.

I think in in council member Rikoski's initial remarks, she sort of talked about you know all all the ways that this study um can be used to impact compensation.

So for that reason, it's not public data.

Now, of course, the council has a right to access not public data when they have a business reason, and certainly the council has a business reason with its um, you know, charter function um over the finances of the city.

But so we do need to do it um in in a not public manner, whether that be briefings or or otherwise um distributing, you know, the report in a way that'll stay not public.

Interesting.

Thank you.

Councilmember Kosky, I see you next in queue.

Yeah, thank you, Madam Chair.

Yeah, I just want to be clear that, and I'm gonna repeat this half of our general fund is personnel salaries.

Half.

And so why do we want to see this report?

Because this will help us inform decisions of short-term and long-term budget and fiscal responsibility that we have.

And I am merely just following the policies that we have adopted so that we can have shared information.

And that is what I am requesting today.

When I first uh sent the request, it like President Payne said, it could have been sent to me within moments, all of us.

It could have been printed out, 13 copies with written across confidential and brought to our desks within hours or even days.

Instead, we are looking over a month for us to get this information so that we can make sure that we're fully informed as we go through this budget process.

Thank you.

Thank you.

I will recognize Council Vice President Chug Tai.

Yeah, thank you.

Um thank you, Madam Chair.

You know, I'm I'm feeling um a little bit frustrated by the characterization that this is uh gamesmanship or um the characterization that this is politics.

Um you know, I I've been included in in all the communications with um the appropriate staff um asking for this information.

Um it's it's been uh number of uh follow-ups have taken place um over the course of I, you know, I want to say it's been a month and a half at this point.

Um and then this is this is the logical endpoint.

So um, you know, I I just don't know um how else to put it.

Thank you, Madam Chair.

Thank you.

I will recognize council member Chavez.

Thank you, Chair uh Chattery.

I also want to push back on this assertion that this is political.

It's not, it's literally just asking for information that we're required we're allowed to ask under our city council authority.

The other component I like to mention is even the concerns that we have with Alice and Lucher and Davis Materi cases, council always has to beg for more transparency, more support, accountability, oversight, and that's personally frustrating when we literally have to ask for the law to be followed.

That's just it's just weird to me that it has come to this point here in Minneapolis.

Thank you.

Is there anyone else?

Okay.

Um I putting myself in cue.

I'm just gonna say I'm I'm looking forward to this again.

I think this is a part of our oversight function that is given to us by charter as the Minneapolis City Council.

Um I still believe that this is a good turning point and a good place for correction.

I think we just can do better as a city.

And I think when we make remarks saying that asking for $650,000 of taxpayer dollars, how how they're used um to be shared with the council as political or games and ship, it doesn't help us.

I think it just further divides us in a moment where we just need to come together.

And not lost on me.

The council definitely needs to participate in that doing better.

Um and here is a good inflection point for us to make a choice to either do better or not to, and I'm hoping we can choose to do better.

So on that motion, is there a motion before us and is there a second so move?

Second.

Great.

On that motion, um, I will have the clerks call the roll.

Councilmember Payne.

Aye.

Rainfill.

Vita, aye.

Cashman, aye.

Jenkins.

Aye.

Chuktai.

Aye.

Koskey.

Aye.

Palmasano.

Aye.

Vice Chair Chowdhury.

Aye.

And Chair Chavez.

Aye.

There are 10 ayes and no nays.

Great.

The motion carries.

Madam Chair.

Yes, Councilmember Palmasano.

It's my understanding is that you will update this last paragraph so that it doesn't say it would be available available to the public via limbs, right?

That you're going to bring an updated version forward Thursday, because that's what I read.

That's what I was reacting to, that you want this information out on LIMS.

And that's clearly not where this conversation is gone.

So I'm just making sure, and I see Councilmember Chuck that's the same.

Councilvice President.

Nodding her head that you're going to actually modify this language to substantively change it and bring this updated language on Thursday to pass it.

That's a great point of clarification.

I'm going to ask the author if she could weigh in on that.

Yes, thank you, Madam Chair.

We just heard from the city attorneys.

Uh I do have some language, but I want to make sure that we run it by them so that we have the correct language.

But we will have that updated by Thursday.

So I'm just pointing out that we just voted affirmatively on something that is wrong and against data practices, but we will have it corrected by Thursday.

I would make the argument that in our legislative intent, we said if it needs to be confidential, we'll make it confidential.

So I I would appreciate I I would appreciate that fact about what we put into the public record, and I am appreciative that Councilmember Koskey is willing to amend that to reflect our comments and discussion today.

Can you tell me where it says that in the RCA?

As I said, that is what we discussed today on the dais to put in the legislative record.

I see.

So I I mean I'm just saying I'm taking your word on this, and I voted yes to take your word on this that this is being corrected and brought forward for a legal vote on Thursday.

Excellent.

That sounds like what the author is planning on doing.

Great.

Wonderful.

We will now move to Oh, I apologize, Councilmember Chavez.

I mean, we can redo the vote if you if you feel comfortable, Councilmember Palmisano.

So then you can change your vote on Thursday.

Otherwise, I do want to ask City Attorney as well.

The council does have authority to release more public information.

So maybe a follow-up over a memo.

I'd like to know uh what we what we would need to do for that.

Okay.

I will recognize um city attorney Abelson.

Like uh Chair Chowdery uh and Councilmember Chavez.

The City Council does not have the authority to waive the data practices act.

Um you may be recalling the City Council waived attorney client privilege, which is within the city council's legal authority, um, but the city council does not have authority to make um not public data public.

And and neither does the mayor, that's set in law.

Okay, great.

And then for attorney Abelson, just jumping off that.

So even if this item passed forward, there would be no legal way for this to even be attached to limbs because we are prohibited by state law, correct?

Chair Chowder, correct.

As long as the data remain not public.

I mean, at some point in the future, the status of this could change, you know, if once it's used, but yes, as long as it's continues to be classified as labor relations data, it is not public data.

Excellent.

So I think we can all find some peace of mind that this will not be attached to limbs, and it never was going to be.

Thank you, Madam Chair.

This is a resolution recognizing the relationship of the Board of Estimate and Taxation and City Council.

Some of you may have followed along, but uh we knew we now have a full-time staff member uh supporting the Board of Estimate and Taxation.

Ms.

Cutterling is in the audience.

Thank you for being here.

Uh and you actually got to see a little sampling of that collaboration between council and BET uh in yesterday's budget presentation around municipal revenue.

Uh that was a body of work that had kind of some muddled uh sourcing about the initiation between interest on the board of estimate and taxation and city council also having an interest in it actually grew out of a commitment that I made with the mayor that we as a city will be uh doing research on new revenue sources.

We brought Ms.

Cutterling on uh as a full-time staff member.

She jumped right into that body of work, and we quickly ran into some things that we wanted to clarify, which is what is the role of the Board of Estimate and Taxation versus City Council?

What are those separations of power, and how do we best utilize um our staff time to support both of those bodies of work?

So this resolution essentially is just creating uh clearer guide rails around how we will interact with the Board of Estimate and Taxation and especially with our staff time as those two bodies are technically separate and independent.

Uh Mr.

Carl, would you like to speak to that at all and maybe make sure I'm completely accurate?

Welcome, Mr.

Carl.

Thank you, Madam Chair, and to Council President's pain.

Yes, all of those things are correct.

And in addition, the BET staff position is unique within the municipal enterprise.

It is a single unclassified position appointed by and under the authority of the independent Board of Estimate and Taxation.

However, it does exist obviously within the municipal enterprise, but there is no operational center for that position or for the Board of Vestimate and Taxation.

As a consequence, you may be aware or not, that the Board of Estimate Taxation through its bylaws has named the city clerk as its own clerk.

And so there is a relationship between the Board of Estimate and the Office of City Clerk, and that we clerk for them the same way we do for the city council and council committees.

We also provide an operational center for the council, such that between transitions and member support, we provide that administrative functionality.

So that includes, for example, financial and administrative assistance, personnel assistance, including payroll approvals, purchasing procurement, and other matters.

The BET has no such organizational center.

And so, as an example, when Ms.

Kiderling was hired, there was no one to bring her on board to train her to process her payroll, to approve her purchases, to authorize continuing education travel, those types of things.

So this resolution, there is a companion resolution for the BET as well to adopt, which would then be the two separate bodies agreeing that the BET staff position could be administratively housed within the legislative department so that the Office of Clerk can provide those types of assistance and support to the BET and to the BET staff position, which are currently lacking.

And then in addition uh to supporting the BET and the BET staff's executive secretary, it would allow some collaborative work between the BET staff position and our own legislative research and oversight division when that position is not otherwise engaged in BET support.

So I think it is a mutually beneficial arrangement between the two separate governing bodies uh within the municipal enterprise, the board of estimate and taxation, and the city council.

Happy to answer any other specific questions if there are any.

Thank you so much, Mr.

Carl.

Are there any members who would like to get into discussion for that?

Councilmember Rainville, I will recognize you.

Thank you.

Uh say uh Mr.

Clerk, you had mentioned that uh there's a certain percentage of uh uh the time that the staff was spent on BET in a certain working within yours.

What what percentages are those uh through the chair councilman uh councilmember Rainville?

I I can't give you a set percentage and it's not our intention to have a certain defined percentage, such as an 80, 20, 70, 30.

Uh the BET staff position is first and foremost a position that supports the BET.

To the extent that there is any time available for that person to assist with legislative research work, then that would be permitted.

So it'd be only to the extent that they're available.

Um because the BET staff position is required as part of their duties to have a background and expertise in policy research analysis, fiscal and oversight types of functions.

There is, I think, a natural affinity or synergy between the work of the BET staff position and the work that is being done and will be done into the future by the legislative research and oversight division.

Thank you.

Thank you.

Is there any further discussion seeing no further discussion?

Is there a motion to approve the resolution?

So moved.

Second.

On that motion, all those in favor say aye.

Aye.

Those opposed say nay.

Any abstentions?

The ayes have it, and that motion is carried.

Now we will be receiving and filing a presentation related to social housing and its overview.

I will welcome up Andrew Hawkins and Sarah Renner from the LRO for the presentation.

Thank you.

All right.

Um Good morning, uh Chair Chavez, Vice Chair Chowdhury, and members of the committee.

My name is Andrew Hawkins.

I serve as the director of the legislative research and oversight division.

Um since I know you heard from me at length yesterday, I'm going to try to keep my part as short as I can today and then turn it over to Sarah Renner for some of the details.

But we're here today to talk about the social housing overview and study framework.

Um just to start off with some background as we always do.

We always want to ensure that we're like letting everybody know essentially what brought us to this point.

Um this one was actually unique because it's the first time that we've got um I mean being a new being a new group, it had to happen eventually, but um where we received a budget allocation that was tied directly to work.

Um following this we sat down and to determine the best way forward um in terms of how we were going to be able to fulfill this request from council related relating to social housing and an eventual study.

Um we determined that um we would do a policy briefing.

Um the purposes were twofold.

Uh the first being that it would give um our staff a base of knowledge to operate from in order to pursue an RFP and effectively evaluate um the submissions that we were receiving.

And then the second piece that came out of it was um leveraging that uh policy briefing to share with you, which we'll be doing today to help ensure that whatever we're gonna be doing is kind of guided and aligned with um some of the different options that are being taken by other municipalities doing this work.

Um so being aligned with uh what council would like to see as far as how we kind of frame up this RFP and what our request is um request for proposals will be what the scope looks like, um, since there are sort of three main buckets um of social housing related work that cities are currently using.

With that, um I'm gonna go ahead and turn it over to Sarah Renner.

Thank you, Andrew.

Andrew, uh Chair Chowdry.

Um, gonna provide an overview of social housing, starting with uh so what is it?

Um social housing is uh rental housing that is owned and and managed by public or public oriented landlords.

Umstanding models, such as in Vienna, um, Singapore, and Montgomery County, Maryland, Maryland, have inspired a recent uh social housing movement in the U.S.

In the last few years, uh, some of them very recently, um, so social housing models have been adopted in Atlanta, Seattle, Chicago, Colorado, Rhode Island, Massachusetts, and Hawaii.

Driving this movement is the country's growing gap between the average their the average income and the cost of rent.

Uh municipalities turn to social housing models out of frustration with not being able to meet their housing goals, despite maxing out state and federal support.

The models uh vary widely um reflecting local markets and priorities.

What they have in common is the desire to create permanently affordable housing.

Most of the social housing models do not rely or at least do not rely as much on subsidy on subsidies, and that includes the federal low-income housing tax credit.

Um and by avoiding these federal programs, they avoid restrictions and so therefore can uh generate permanent housing without deadlines.

In practice, the term social housing is used very broadly to refer to all sorts of initiatives.

Um the NYU Furman Center has uh defined the concept more tightly as a U.S.

public developer models.

In all such models, state or local government entities act act either directly as a housing developer or they work uh by formal agreement with development partners to ensure some degree of public ownership.

The advantages of public developer, the public developer models is that they bring a public mission to housing and can leverage tools that the private sector cannot, such as public land, favorable financing, and regulatory tools.

The challenges, however, are also considerable, and they include investing enough up front to establish a high skilled, high functioning public developer entity, which is a government entity.

Another challenge is building a system of public finance that is sufficient to sustain both the affordability and the quality of housing over time.

So in the context of consulting with the state of Rhode Island, the NYU Furman Center scanned, looked across the country at all the social housing models and developed a typology.

They essentially created three different groups.

The first group is group A, which is mixed income housing.

In group A models, municipalities or states establish a government backed revolving loan fund.

These funds offer developers lower cost financing in return for government ownership stake in the project.

Montgomery County, Maryland, for example, established a hundred million dollar housing production fund using bond issuances.

Their revolving loan fund provides provides low cost construction financing to developers, and it essentially replaces the role of private equity.

The counties, the Montgomery County's Housing Opportunities Commission charges the developers a 5% return, which is significantly less than what private equity charges.

In return, the commission demands a higher share of more deeply affordable units.

The county commission invests directly in mixed income housing, using the profit from their market rate units to subsidize the income restricted units and also reinvest it's the equity that they earn in other projects.

For this reason, group A models such as Montgomery County, they work best in higher cost neighborhoods.

Montgomery County generates units that serve households earning around 50 to 65% of area median income, AMI.

Chicago and Atlanta, also using this model, are aiming for a smaller portion of the units but that are available to people earning 80% AMI, but these are not yet built.

According to NYU, group A models are best used to fill affordability gaps for moderate income housing households.

And they also offer rental options for voucher holders who face challenges in the pro in the private market.

To work effectively, group A models require two things.

The first is multiple financing tools.

And this is in addition to the revolving loan fund and cross-subsidization.

For example, and this is just in order to make the units affordable or as affordable as possible.

The Montgomery County Housing Opportunity Commission, for example, uses tax exemptions, inclusionary zoning, and often leverages publicly owned land to lower the project cost, they estimate by about 10 to 15%.

Atlanta, Georgia also builds on publicly owned land, which they also, and they also draw on city-owned land as an additional form of equity.

Colorado and Seattle have adopted new taxes to pay for their social housing initiatives, specifically to raise equity in order to issue bonds for their revolving loan funds.

The second requirement for group A models to be successful is making sure to have sufficient upfront investment.

Essential to group A is a government entity with sound skilled leadership and a range of expertise, including in risk assessment, underwriting, and development.

The governance of such public developer entities is critically important.

Sometimes they are housed within public housing authorities, such as in Montgomery County.

Sometimes public developer entities are housed in a new nonprofit agency that works closely with the city and the county, such as in Atlanta.

And sometimes an independent entity is created, such as in Seattle.

And this is not like group A.

These models focus on creating new mixed income.

So group A focuses on new mixed income developments.

Group B depends on federal programs and focuses on expanding existing existing public housing.

And in this model, public developers open new units as opposed to new developments.

States and city cities employing group B models leverage the federal restore and rebuild program, which used to be known as the Fair Class Fair Cloth to Rad program.

They use this the subsidies from that program to redevelop public housing, contributing to deeply affordable housing units.

That means that federal law allows MPHA to operate an additional 900 units, which are not currently operational due to funding shortfalls.

MPHA is now piloting an initiative that draws on subsidies under restore and rebuild to develop 15 new develop uh deeply affordable units.

To be viable, group and there's potential, I should say there's potential scope for that to be expanded and accelerated, obviously from 15 to a larger number.

To be viable, uh group B developments require additional public funding in addition to the subsidies from the federal program.

The city of Minneapolis is familiar with this because they allocated a 1.3 million direct contribution to MPHA to support their pilot for 15 new units.

The Cambridge Housing Authority consults with other PHAs, uh public housing authorities, including in Boston, and they've been spreading the approach in New England.

Um adopting the requirement for group B models is really having a strong PHA with expert expertise and capacity to undertake large-scale development.

Group C models of social housing.

This is uh the final one.

This is uh known as affordable housing.

Um group C models use dedicated funding streams and portfolios of smaller properties to cross-subsidized development costs.

Um, examples in uh Dakota County, Minnesota and Idaho showcase how publicly driven development can sustain long-term affordability, um, sometimes without relying on the federal low-income housing tax credit.

Dakota County, Minnesota, for example, owns and operates more than 1,700 uh senior units in 30 properties for households with incomes at or below 80% AMI.

Uh the work is carried out by the county's independent Dakota County Community Development Agency, which operates as both a public housing authority and a housing finance agency.

Um, they're underlie the success and state sustainability of group C models.

First, they rely on a large portfolio of units, usually developed over decades, as in Dakota County, to spread out the costs of financing management and repair.

Second, they have found a way to avoid or to manage competition with nonprofit uh developers for government subsidies.

Um for the last 30 years, Dakota County has avoided uh this kind of competition with nonprofits by drawing on a tax levy as a dedicated source of funds for for housing.

Uh and they also use their bonding authority to finance uh affordable projects.

The structure of their bonds allows them to pool revenue from across their large portfolio of developments to service their debt and to spread out the cost of repairs.

To keep things affordable, group C models focus on developing smaller scale and less expensive projects.

In high cost housing markets, group C models are not financially viable typically and they're more difficult to sustain.

And with that, I will turn it over to Andrew to talk about next steps.

All right.

Thank you, Sarah.

We'll be real quick and just wanted to go over some potential next steps with this.

Obviously, there's going to be options that aren't covered by this, but we thought these were kind of a couple line items we wanted to make sure that we put before you all.

So in the event that we want to go forward with any um subsequent RFP for a deeper dive into this, please reach out to our office and to indicate them or today.

I mean, pass a note, whatever.

It doesn't really matter how it happens, but just to make sure that we kind of have an understanding for, you know, if there's any consensus on the preferred group, obviously just going forward kind of broadly is an option as well.

The request for proposals will identify the preferred approach to be prioritized.

But I do want to emphasize that just because we prioritize something doesn't mean that we're going to block out you know the consideration of any other um you know opportunities that are identified along the way.

Umce we get to the the this point, uh LRL staff will coordinate an enterprise review panel to review those emissions.

Um reason I wanted to make sure that that was noted was because uh again, social housing is a very um it can be it's a very complex and um involved you know thing, and as much as you know, but we want to um learn as much as we can to support the work.

There's also subject matter expert staff on the um uh administrative side that are going to be responsible for some of the areas that are very key to this.

So uh we want to ensure that we're reaching out and uh doing this collaboratively so that there's buy-in and um everybody's on the same page going forward.

Um and then lastly, um uh once we get the content, you know, once a contract when and if a contract is established on this item, um, a timeline will be established with the selected vendor that identifies uh specific stages of work and very clear reporting deadlines so that they can keep council um abreast of uh the work as it proceeds um likely into into next year.

Um with that um I will conclude our presentation and uh Sarah and myself are happy to stand for questions.

Thank you so much, Mr.

Hawkins.

I will recognize council member Cashman.

Thank you, Madam Chair.

Um thank you, Director Hawkins, thank you, Sarah.

I had a couple questions about uh your research here.

So on page nine, uh the NYU Furman Center advises that public development models be used when they add to the affordable housing landscape rather than replace existing capable partners.

So I've been thinking about how social housing can actually be uh part of a solution to specific needs in the housing sector that aren't being being addressed by other public or nonprofit or private partners.

And so I'm wondering if you have a sense of what uh those needs are in Minneapolis, like certain types of housing that we're just not getting through other uh sources.

Um I think that's that is that's the kind of question that will be answered in our study because they're gonna be looking at the landscape and doing a feasibility.

So that's that's much more the type of texture we did not uh this was really meant to give us a sound basis.

Um with that said, I mean the NYU work does point out some of the particulars that um that a public entity can do instead of a rather than a private uh uh developer.

So using public land is one of them uh converting um abandoned properties.

Um those are some of the things that uh there's a comparative advantage, obviously, for having and some of the financing tools as well.

Uh so there's a you want to emphasize the comparative advantage of of your public developer as opposed to uh the nonprofit and the private sector actors.

Thanks.

That's helpful.

Um the second question I had was kind of related to the one we had yesterday about municipal revenue.

I think it's pretty linked given that like becoming a public developer would be a way for us to kind of invest in properties ourselves and see the see the impact of that like in the public realm as well.

So how do you think that the social housing study can kind of complement the thinking on municipal revenue chair Chubb as uh council member Cashman, thank you.

I was actually just standing over there thinking that I should have mentioned we always love it when um it's always nice when some of our work, you know, when um different projects can kind of intersect like this in a way that we're able to demonstrate and leverage.

Obviously, in this scenario, having stood here you know 24 hours ago, um it's an even you know it's a much closer example, but um as far as where they're related and how they can inform each other.

I think there was an example yesterday, and I'm gonna forget already because we've moved into this, um, the tax that it was, but uh the city of Seattle has a tax that's explicitly related to social housing.

Um I think by on the municipal revenue side, as far as where there's challenges and barriers um to get some of these things through um you know state legislatures and approved, being able to tie them directly to projects um is always uh like was definitely one of the things that stands out from cities that have implemented um these types of practices.

So I think that there's a way through this work on uh social housing.

I mean, again, like the um idea would be that it's identifying, you know, I think the size and scope but also the cost um of the program.

That's something I know Sarah covered.

Um we can't you can't ignore it.

Anything that we do that's new is gonna have a cost.

And so understanding what that cost looks like, um I think is it has a direct correlation to you know the us needing to figure out how we're going to fund it, um, whether that's through existing funds, whether that's through going to the state and requesting a new tax that um would be intended specifically to um provide either funding in full or funding in part um to any kind of social housing program.

Um I also think that being able to do this deeper dive where you know we're putting together a more complete roadmap um will would be a critical piece of any uh request for approval of a new tax by just simply showing that you know this is something that's totally fleshed out where we know what we're looking.

We know what we're looking at, we know what the our landscape is, what we're gonna do, um as opposed to kind of just going broadly and saying, well, we think we want to do this, it'll cost roughly this amount.

Um I mean this is gonna give us probably the strongest case uh to make because we've done the like at that point we will have done all the work to have a very clear idea for what we're doing going forward.

Um and if I didn't answer parts of your question, just remind me and I'm happy to follow it.

Well, is there is there a revenue benefit to the to doing social housing from a financial sustainability perspective for the city?

Uh yep, so I know you have some pieces uh like on this, but uh just from the municipal revenue side of work, uh one of the things I talked about was like leveraging assets, so the city having the ability to uh revitalize properties um and build out uh neighborhoods that might have not otherwise received the same attention.

Um certainly has uh again, it's a trickle uh I guess a generating capacity where once you know once something's there and you have a population there, you're gonna get other you know, stores, shops, um additional properties um that can go into the same location.

So I think it's a way for the city to play a role in um like providing a jump start for some areas.

Um but I know Sarah has a piece as well.

Yeah.

Um Councilmember Cashman through the chair.

Um the example of Atlanta is interesting here because they really emphasize uh leveraging uh city owned assets and and land in particular.

Um again, they use land as collateral for uh well as uh as equity, I should say, um, for uh developments uh for public it not only is the is the uh are the public developments actually they're just in process of doing their first one in Atlanta, but um it is being built on public land and at the same time the land is being used as equity.

Uh so that it there's some interesting examples in that in that uh there's some interesting pieces in that example for how to sort of maximize um city assets.

Um as well, I I mean this is definitely a cost.

There's no this is a a huge expense, right?

But uh at col the state of Colorado and Seattle both had propositions uh that tied new sources of revenue to social housing, and they both passed.

So it it's a it's a way of um uh sort of telling people where the money is where the revenue that's generated is gonna is gonna go and and giving them a colorful example of how it can be proactive in solving problems.

Um the Seattle example is interesting, they used a tax on excessive compensation and anything over a million dollars.

Uh they charged uh the bit if if uh a company was uh charging was was giving a salary of a million or over, they would charge uh five dollars for every one dollar over a million dollars.

So uh that's the fund that they that's the tax that they use specifically for social housing.

Um the state of Colorado actually uh um targeted a piece of their state income tax uh specifically for this.

Um so there are some interesting examples.

Um Dakota County also has a specific levy that funds its uh senior public housing uh initiatives.

Okay.

Thank you.

And then finally, just wanted to ask about the state legislature took some action on social housing last year.

I believe that there was uh some funding appropriated for piloting social housing.

Are you familiar with that bill?

I believe it was representative Igbaje who carried it.

And where and if that's an opportunity for us.

Yeah, I wasn't I I I've been speaking with the people involved, but I wasn't aware that it actually passed.

So I will look I will look at that and uh more closely I can follow up and send information, but that's very interesting.

Okay, yeah, thank you so much.

Next, I'll recognize Council President Payne.

Thank you, Madam Chair.

Uh I really want to just express my gratitude for this presentation.

When we pass this budget amendment, I just assumed that we would go straight to RFP and and you know start re you know reviewing contracts and just getting the work in from whatever outside party, but this foundational research I think it is really helpful because even for myself, having this typology helps reframe it a little bit for me because you know my my my big worry and concern has been that uh a lot of our housing policy is currently designed for a market with zero percent interest.

So, like our affordable housing trust fund was a great innovation when the private markets were lending and we were able to shift how those projects came together through a smaller investment under these current lending markets.

I don't know that the Affordable Housing Trust Fund is as successful at achieving our goals, and it's really good to see this typology so that we can make sure that whatever path that we take, it's aligned with our current market context and reality.

So I was leaning more towards the Dakota model because I was biasing, oh, that's in the state of Minnesota.

That means that there's not a state law barrier, so maybe we should try to replicate that model.

But you know, even just this small sample of the complexity of it shows that maybe in our housing market in Minneapolis specifically, maybe that's not the best alignment.

So I'm really looking forward to the the deeper research, but I'm really glad that you took this opportunity to do a policy briefing first so that it would inform that research so that we could actually really cater it more specifically to Minneapolis.

So thank you.

Thank you.

Thank you.

I put myself next in queue.

Um I would love an opportunity to just kind of sit down with you offline to dig a little bit deeper.

I I certainly have a lot of questions.

Um just ranging from how how do we get the the capital funding to develop something as a municipality and what others have done, what is building look like, what is contracting look like once it's made, what is management look like, how successful has it been for the tenants that um end up taking up social housing, and I'm also interested in that group A conversation.

Um I'm interested in seeing what it would mean for the city of Minneapolis to have market rate housing and how higher value housing in that way uh to leverage to create more affordable housing.

Um I hope in the deeper research study that we get back, it can go through not only that capital stack to actually get the development going, but year after year uh what it what did expenses for management, maintenance, and then return look like, and then how was it utilized by other municipalities?

And I think group A is the one that kind of more um cleanly lines up with what our state legislative delegation has been working on.

I believe it was uh led by two Minneapolis delegation um representatives, one in the House, Representative Agbaj, and one in the Senate, but I can't recall the Senate author.

But that's yeah, those that's just kind of my two cents on this.

I I think there's just a lot to learn here, and I'm interested in seeing what kind of what kind of model would work best for the city of Minneapolis and also understanding maybe maybe there's a way for us if to look at pursuing um multifamily housing that also has commercial on the bottom and what it means to lease that out and create small business opportunity um in the future as well.

Yeah.

Um are there any other members that would like to get into queue?

Okay.

Great.

Well, thank you for the presentation.

Seeing no further discussion, I will ask the clerk to receive and file it.

Um without objection, we are I have a qu I have a point I want to make.

Thank you, Chair Chuck.

Councilmember Chavez, is it regarding this item?

I have a question for the suit attorneys on the item that we just discussed.

Okay.

I will recognize you, Councilmember Chavez.

Thank you, Chair Sharley.

I just like a memo on the on regarding item number one to the city attorney's office.

Specifically since the item we talked about, there was a survey conducted by Guide House, which completed an analysis of compensation in twelve peer US cities that was made public by staff.

And I just want to understand how that was made public and how we received a a council action on that and how that is different from the other compensation study.

That was in November 2023.

It was a compensation analysis conducted by Guide House.

And if we're using statutes 13.435 salary benefit survey data, I just want to know how that's different, and maybe that could just be a follow-up over a memo.

Councilmember Chavez, we can follow up with a memo.

I wouldn't need to review that study in that item.