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Record of Proceedings

Minneapolis City Council Budget Committee Regular Meeting (Budget Markup Continued): Elected Official Compensation, Q3 2025 Financial Status, and 2026 Budget Amendments

City Council — Monday, December 8, 2025

BodyMinneapolis, Minnesota

SessionCity Council

DateMonday, December 8, 2025

StatusFILED

Video Record

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Transcript — VerbatimClick a timed line to jump · ⧉ to share it

0:00

Good afternoon.

0:15

My name is Aisha Chugtai and I'm the Chair of the Budget Committee.

0:20

I'm going to call to order our regular meeting for Monday, December 8th, 2025.

0:26

Before we begin the meeting, I want to offer a friendly reminder to all members, staff,

0:31

and the public that these meetings are broadcast live to enable greater public participation.

0:36

These broadcasts include real-time captioning as a further method to increase the accessibility

0:41

of our proceedings to the community.

0:44

Therefore all speakers need to be mindful of the rate of their speech so that our captioners

0:48

can fully capture and transcribe all comments for the broadcast.

0:52

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

0:57

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

1:01

Council Member Payne.

1:02

Present.

1:03

Wonsley.

1:04

Present.

1:04

Rainville.

1:05

Present.

1:06

Vita.

1:06

Present.

1:07

Ellison is absent.

1:09

Osmond is absent.

1:11

Cashman.

1:11

Present.

1:13

Jenkins is absent.

1:15

Chavez.

1:15

Present.

1:17

Chowdhury.

1:18

Present.

1:19

Palmisano.

1:20

Present.

1:22

Vice Chair Kosky? Present. And Chair Chuck Tai? Present. That is 10 members present. Let the 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. Also remind my colleagues that we have a packed schedule today and we'll need to utilize our time wisely. Before we resume budget markup, we have two discussion items on our agenda today.

1:49

The first item on the agenda is regarding compensation of the mayor and council members for terms beginning January 2026.

1:58

I will invite City Clerk Casey Carl to introduce this item.

2:03

Thank you, Madam Vice President.

2:05

May it please the committee as stated I'm here to address compensation for the city's mayor and council members for the next elective term, which starts in just 26 days.

2:15

As indicated in your briefing materials, the subject of compensation for elected officials is the responsibility of each jurisdiction's governing body.

2:25

That's provided under Chapter 744 of Minnesota Session Laws of 1971.

2:31

Specifically, that law provides that compensation is to be set in the final year of an elective term, and it becomes effective in the next succeeding term.

2:40

The law also stipulates no change can then be made in the level of compensation during an elective term, neither to increase nor to decrease the rate of compensation for elected officials.

2:53

So compensation for elected officials in all cities can only be set at the conclusion of one elective term.

2:59

It becomes effective at the beginning of the next elective term.

3:02

So unlike with our employees where we do the salary setting every year as part of the budget, there is only one time to do that for elected officials.

3:10

In 2019, Ordinance Number 2019-44 was enacted, codified under Section 14.60 of the City's Code of Ordinances, which prescribes the process to consider any compensation to be paid to the Mayor or Council members.

3:26

and under that part of the code, compensation is to be set by a resolution that's considered first by the council's standing committee having oversight of the city budget prior to any final formal action by the full council as part of the adopted operating budget.

3:42

In 2021, a 2% increase in salary was approved for mayor and council members, which took effect in the terms starting January 2022.

3:50

At that same time, council directed the clerk to conduct an analysis of elected official compensation in peer jurisdictions, given the change in the city's government structure that was approved that same year by voters.

4:03

In response to that directive, the city engaged an outside agency, Guidehouse, to conduct the analysis of comparable peer jurisdictions.

4:12

guidelines. Guidehouse evaluated compensation paid to the mayors and council members of

4:17

those jurisdictions that shared the following key features. First, each of those cities

4:22

must operate under a charter that defines the elected mayor as being the jurisdiction's

4:27

chief executive officer with similar scopes of powers and responsibilities as those provided

4:32

for the mayor of Minneapolis. Second, each jurisdiction must have a full-time legislative

4:38

body, council, that has legislative policy making and oversight powers similar to those

4:43

provided for the Minneapolis City Council.

4:46

And third, each jurisdiction must have a population similar to Minneapolis, meaning that it has

4:51

a similar gross domestic product or GDP, a growing population, or one which is identified

4:57

as a greater Minneapolis-St. Paul partnership peer city.

5:02

Under the Kahn rule, also Minnesota Statutes 205.84, the City Council experienced two consecutive

5:09

two-year terms to adjust for the redistricting of population following the 2020 Census.

5:15

Therefore members of City Council qualified for a potential increase again for its current

Discussion Breakdown — Share of Meeting

Fiscal Sustainability████████████████████████████████████████40%

Public Safety██████████████████████████████30%

Council Governance████████████12%

Economic Development██████6%

Community Engagement█████5%

Pending Litigation████4%

Personnel Matters███3%

Summary of Proceedings

Minneapolis City Council Budget Committee Regular Meeting (Budget Markup Continued)

On Monday, December 8, 2025 (afternoon session; committee noted a hard cutoff at 4:00 p.m.), the Budget Committee—chaired by Council Member Aisha Chughtai—met with a quorum (10 members present at roll call; later Osmond and Jenkins joined) to (1) act on elected official compensation for terms beginning in January 2026, (2) receive the 2025 third-quarter (through Sept. 30, 2025) financial status report on select city funds, and (3) resume 2026 budget markup, voting on several amendments and adjourning to continue on Tuesday, Dec. 9, 2025 at 10:00 a.m. The committee also announced the final public hearing on the 2026 budget: the statutory Truth in Taxation hearing on Tuesday, Dec. 9 at 6:05 p.m.

Discussion Items

Elected official compensation for terms beginning January 2026
- Presenter: City Clerk Casey Carl (City Clerk).
- Legal/process context: Compensation must be set in the final year of an elective term and becomes effective the next term; no changes (up or down) can be made during the term (referencing Chapter 744, Minnesota Session Laws of 1971; City process codified in Ordinance 2019-44 / Code §14.60).
- Peer city survey (Guidehouse):
  - Surveyed 22 cities; received 19 responses (86% response rate).
  - Mayor pay (2025): Minneapolis mayor salary $140,814 (set 2021). Average of peer mayors $197,565; Minneapolis described as about $56,000 below the average and in the bottom 15% of responding cities. Minneapolis was second-lowest, above Omaha ($136,942) and below St. Paul ($153,579). San Francisco listed at $320,831.
  - Mayor pay (anticipated 2026): Peer average projected to rise to about $205,998; staff stated Minneapolis would be more than $65,000 below that average if unchanged. Reported anticipated increases ranged 2%–3% in 10 cities; Atlanta and Boston noted at 16% and 20% increases.
  - Council pay (2025): Minneapolis council salary $109,846 (unchanged since set in 2021). Peer average $105,908 (about $4,000 below Minneapolis). Staff stated Minneapolis ranks around the top 60% among responding cities.
  - Council pay (anticipated 2026): Peer average projected to rise to about $112,000; staff warned Minneapolis would slide downward in the middle range if unchanged.
  - Mayor–council differential: Staff stated Minneapolis has the smallest salary gap among peers (about $30,968). Examples cited: San Francisco gap $184,937, Columbus $152,460, St. Paul about $76,000 (with a part-time council).
- Staff recommendations:
  - Set mayor salary at $187,000 starting Jan. 2, 2026, held constant during the term.
  - Keep council salary unchanged for the first two years of the next term (stated as $109,847), then starting Jan. 2028 apply annual increases equal to the COLA approved for the majority of collective bargaining units in the prior year (rates to be calculated by HR and programmed into the budget).
- Council discussion:
  - Council Member Wonsley thanked clerk staff and expressed concern about a letter (attributed to Mayor Frey) seeking to shift compensation-setting authority away from council to the Charter Commission; she stated a desire to “hold the line” on council authority.
- Action: Committee approved forwarding the draft resolution to the full council (voice vote; one “no” was heard, no tally provided).
2025 Third Quarter Financial Status Report (select funds)
- Presenters: City Controller George Hardgrove and Deputy Controller Robert Lang (Finance & Property Services).
- Timeframe & caveats: Report as of Period 9 / Sept. 30, 2025, forecast work performed mostly in October; figures unaudited until year-end close and annual report.
- Citywide highlights (Hardgrove):
  - General Fund forecast spend-down increased to about $67–$68 million (up from $60 million previously forecast).
  - City maintained AAA bond ratings from Fitch, Moody’s, and S&P, with concern expressed about sustainability of General Fund spend-down.
  - Property taxes projected $17.4 million under the fully levied amount (delayed/uncollectible collections and court/judgment adjustments cited).
  - Downtown Asset Fund softness noted: September collections down by almost $2 million vs. 2024.
  - Police and Fire projected combined overage cited at about $25 million (Hardgrove), and later detailed as major contributors to General Fund overages.
  - Self-insurance fund: stated as above the minimum policy of $117 million by about $85 million, while also described as carrying a negative net position due to large potential claims.
  - Cash & investments as of Sept. 30: about $1.186 billion, an increase of about $140 million year-over-year.
- General Fund detail (Lang):
  - Projected 2025 year-end General Fund cash: $166 million (down from $234 million at end of 2024).
  - Projected 2025 year-end fund balance: $141 million (down from $209 million at start of year), a projected $67 million decrease year-over-year.
  - Budgeted use of fund: Lang stated the $67 million use was largely budgeted, comprised of a $24.6 million planned use plus $41.8 million rollover use (and minimal amendments).
  - 17% minimum balance policy: minimum calculated at $109.1 million; projected fund balance $141 million leaves $32.5 million above minimum.
  - After commitments/restrictions (including $8.7 million planned use into 2026 and $14.2 million restricted for public safety aid and North Commons), unassigned fund balance projected at $118.6 million, leaving about $9.5 million above the minimum.
  - Revenue shortfalls: Revenues projected $18 million under budget, including property taxes $17.5 million under, licenses/permits $4.5 million under (mostly building permits), and franchise fees $2.8 million under; service charges $3.9 million over.
  - Collection performance: 2025 revenues shown at 97.3% of budget vs a three-year average 99.9%.
  - Expenditures: Public safety $12.8 million over budget; Public Works $3.6 million over (nearly offset by service charge revenue).
  - Departmental overages called out included: City Attorney $490,000 over (settlement agreement work referenced), Assessing $200,000 over (CAMA project), Office of Public Service $50,000 over (unbudgeted COLA), Fire $5.5 million over (overtime), Police $19.5 million over.
- Q&A themes and follow-ups:
  - Property tax shortfall: Staff attributed to lower collection rates over recent years (e.g., declining from ~98% to under 96% forecast) and court/judgment adjustments; Finance agreed to follow up on how much of the shortfall is due to court-ordered adjustments.
  - MPD overspend drivers (MPD Finance Director Becky Troswick and OCS/MPD leadership): explained as (1) back pay (cited as $2.5 million), (2) settlement agreement expenditures not budgeted, and (3) new hires—stated as 174 sworn-position hires in 2025, including growth in Community Service Officers (budgeted ~20–23 CSOs, stated currently 74).
  - Overtime: MPD reported critical staffing overtime (CSOT) of $16.5 million in 2025 vs $15.6 million in 2024; total overtime + CSOT reported as $31.0 million in 2025 vs $27.1 million in 2024 (a 12% increase). Budgeted overtime cited as $5.9 million in 2025 (vs $13.7 million in 2024), with reliance on vacancy savings.
  - Fire overtime: Fire leadership stated eliminating overtime entirely is not feasible, but estimated at least 45 additional firefighters would be needed to reduce most overtime tied to minimum coverage.
  - Self-insurance liabilities: Finance stated reserves reflect known potential claims in coordination with the City Attorney; City Attorney advised that case-specific reserve discussion is privileged, but general reserve-setting could be described and closed sessions could address threatened/initiated litigation.
  - Multiple members requested memos providing: (a) multi-year General Fund “above target” history, (b) reasons for departmental underspends/overspends, and (c) more detail on MPD overspend categories.

Key Outcomes

Forwarded elected official compensation resolution to full council for action with the 2026 budget (voice vote; motion carried with one audible “no”).
2025 Q3 Financial Status Report received and filed (no vote recorded in transcript beyond direction to file).

2026 Budget Markup (selected amendments)

Amendment 16 — MPD off-duty fees implementation (Wonsley & Payne)
- Purpose/position statements: Authors stated the amendment would fund implementation resources for off-duty fee collection in 2026 and could help recoup costs (author stated “up to $1.4 million”) currently subsidized by taxpayers.
- Key clarifications:
  - Budget Director Juliana Descenza stated fees generally flow to the General Fund (unless specially restricted) and are not automatically returned to MPD under current service level budgeting.
  - MPD Finance Director Troswick clarified prior fee analysis was to calculate an ongoing fee for full cost recovery and did not include implementation costs.
- Vote: Passed 11–1 (Ayes: Payne, Wonsley, Rainville, Vita, Cashman, Jenkins, Chavez, Chowdhury, Palmisano, Kosky, Chughtai; Nay: Osmond).
Amendment 27 — 38th Street Thrive implementation (Chavez, Jenkins, Chowdhury, Wonsley; Cashman added as co-author)
- Purpose: Funding to implement the City-adopted 38th Street Thrive Plan (adopted year stated as 2019), including stabilization of physical property/infrastructure, events/marketing/branding, and ownership/preservation supports.
- Vote: Passed (initially recorded 11–0 with Vita absent; Vita later noted “in the affirmative,” making it 12 ayes).
Amendment 28 — Downtown street outreach / Warehouse District L.I.V.E. program support (Rainville)
- Program description: Contract funding for downtown weekend coverage (Fri/Sat 6:30 p.m.–3:00 a.m.) from May 26–Oct. 26; proposed staffing described as 6 street outreach workers, 2 unarmed security guards, 4 ambassadors, and 1 late-night safety dispatcher, serving areas including Nicollet Mall, the Hennepin Ave theater district, and the Warehouse District.
- Implementation/oversight: Amended to run through the Office of Community Safety with council review of vendor selection; OCS noted procurement could be RFP or sole source depending on service definition.
- Vote: Passed 12–0.
Amendment 29 — Nicollet Avenue public restrooms (Cashman)
- Introduced but not voted due to time; proposed $700,000 ongoing from the streetcar value capture fund to procure climate-controlled standalone public restroom units along Nicollet Avenue/transit corridor.

Adjournment / Next Meetings

Committee adjourned to Tuesday, Dec. 9, 2025 at 10:00 a.m. to continue budget markup.
Final 2026 budget public hearing (Truth in Taxation) scheduled for Tuesday, Dec. 9 at 6:05 p.m.

Meeting Transcript

Good afternoon. My name is Aisha Chugtai and I'm the Chair of the Budget Committee. I'm going to call to order our regular meeting for Monday, December 8th, 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 roll so we can verify the presence of a quorum. Council Member Payne. Present. Wonsley. Present. Rainville. Present. Vita. Present. Ellison is absent. Osmond is absent. Cashman. Present. Jenkins is absent. Chavez. Present. Chowdhury. Present. Palmisano. Present. Vice Chair Kosky? Present. And Chair Chuck Tai? Present. That is 10 members present. Let the 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. Also remind my colleagues that we have a packed schedule today and we'll need to utilize our time wisely. Before we resume budget markup, we have two discussion items on our agenda today. The first item on the agenda is regarding compensation of the mayor and council members for terms beginning January 2026. I will invite City Clerk Casey Carl to introduce this item. Thank you, Madam Vice President. May it please the committee as stated I'm here to address compensation for the city's mayor and council members for the next elective term, which starts in just 26 days. As indicated in your briefing materials, the subject of compensation for elected officials is the responsibility of each jurisdiction's governing body. That's provided under Chapter 744 of Minnesota Session Laws of 1971. Specifically, that law provides that compensation is to be set in the final year of an elective term, and it becomes effective in the next succeeding term. The law also stipulates no change can then be made in the level of compensation during an elective term, neither to increase nor to decrease the rate of compensation for elected officials. So compensation for elected officials in all cities can only be set at the conclusion of one elective term. It becomes effective at the beginning of the next elective term. So unlike with our employees where we do the salary setting every year as part of the budget, there is only one time to do that for elected officials. In 2019, Ordinance Number 2019-44 was enacted, codified under Section 14.60 of the City's Code of Ordinances, which prescribes the process to consider any compensation to be paid to the Mayor or Council members. and under that part of the code, compensation is to be set by a resolution that's considered first by the council's standing committee having oversight of the city budget prior to any final formal action by the full council as part of the adopted operating budget. In 2021, a 2% increase in salary was approved for mayor and council members, which took effect in the terms starting January 2022. At that same time, council directed the clerk to conduct an analysis of elected official compensation in peer jurisdictions, given the change in the city's government structure that was approved that same year by voters. In response to that directive, the city engaged an outside agency, Guidehouse, to conduct the analysis of comparable peer jurisdictions. guidelines. Guidehouse evaluated compensation paid to the mayors and council members of those jurisdictions that shared the following key features. First, each of those cities must operate under a charter that defines the elected mayor as being the jurisdiction's

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