Good afternoon.

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

I'm gonna call to order our regular meeting for Monday, June 8th, 2026.

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.

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

Councilmember Payne is absent.

Wandsley present.

Rainville?

Present.

Vita presence.

Warren.

Present.

Osman.

Present.

Stevenson.

Present.

Chavez.

Present.

Whiting.

Absent.

Chowdry.

Absent.

Palmasano.

Present.

Vice Chair Schaefer.

Present.

And Chair Chuktai.

Present.

And Councilmember Payne.

Present.

That is 11 members present.

Let the record reflect that we have a quorum.

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

So please make sure to sign in.

Colleagues, the agenda for today's meeting is before us.

I have one walk on related to a request by staff for a gift acceptance for interim deputy city operations officer Katie Topinka to attend the strive together 2026 Policy Summit and City Accelerator Cohort Meetings.

You have a copy of the RCA in front of you, and staff are also available to answer questions.

I'll move to add this as part of our consent agenda.

Are there any questions or any other amendments related to the agenda?

I'll note that we've been joined by Councilmember Chowdhury as well.

With that, may I have a motion to uh adopt the agenda as revised.

So moved.

Second.

All those in favor, please signify by saying aye.

Aye.

Those opposed say nay.

Any abstentions?

The ayes have it, and that motion carries.

The one item on our consent agenda is the gift acceptance for interim deputy city operations officer Katie Topenka.

I'll move approval of this item.

Is there any discussion?

I'll recognize council member Wandsley.

Hey, Chair.

Um Chuktai.

Oh, sorry.

Never mind.

Actually, never mind.

Sounds good.

Um, seeing no further discussion on the consent item uh on the motion to approve, please.

All those in favor, please signify by saying aye.

Aye.

Those opposed say nay.

Any abstentions?

The ayes have it, and that motion carries.

Our next item is discussion item number one on our printed agenda, which approves a staff direction to uh research a potential payment in lieu of taxes or pilot program.

I'll ask Councilmember Wandsley to speak uh to this item and move approval.

Thank you, Chair Chuck Thai.

Um, so many of you are aware that earlier this year the council and the board of estimate and taxation received a pretty elaborate report and presentation regarding potential ways in which the city could increase uh revenue.

And the report was not only extensive, but it highlighted uh specifically that when compared to our peers, Minneapolis generates less revenue per capital.

Um, it also highlighted something that we already know, and we're gonna receive a presentation covering that in a bit, but that our city is heavily dependent on property taxes, which indicates that we do have the opportunity and a necessary opportunity to diversify how we generate and receive revenue.

Um, that report also provided a number of recommendations in which we could pursue to again pursue revenue uh generation.

Uh, some of those changes will require state-level actions and will take more time, but there are some strategies that will allow us to move forward uh independently.

And one of those recommendations uh show that we could implement something called pilot, which is voluntary payment in lieu of taxes, and this particular revenue option uh will allow the city to increase revenues and focus on entities that receive a significant amount of city resources but do not pay uh property taxes.

Um, the report also highlighted in terms of how much revenue could be generated from this program.

Um, it showed that uh estimate um highlighted that we could collect anywhere between 10 million dollars to 19 million dollars and again in the presentation that we're about to receive is very clear that we know that we have a precarious state of our city's financial well-being um and it's placing a unsustainable burden on most of our working class resident shoulders and it's that sobering reality um that should implore all of us to seriously look at how we can implement a multitude of initiatives that will help our city raise significant uh funds and revenue in a sustainable and equitable way and pilot could be one of those tools that we could potentially use so this legislative directive allows us to get more clarity on the type of potential organizations or institutions that could participate in a pilot program and provide crucial information we would need if we opted to implement it.

So with that I look forward to getting more information when this gets back and working with my colleagues on next steps.

With that I will motion this item for approval second um we have a proper motion before us is there any further discussion on this item.

Thank you chair uh say uh councilmember once you just uh off the top of your head what type of um organizations do you think uh this might uh highlight to us you have any idea yeah so member once would you like to address that yes I'm more than happy to uh council member Rainville I'm just looking up the report made by Guy House that we received and it gave a definition of some of those organizations that could participate um they highlight it could be higher ed institutions healthcare institutions educational specifically educational medical and cultural sectors um they have a whole elaborate definition of of what programs could qualify under it in that 32 page report thank you very much wonderful um I'll next recognize council member warren thank you um chair um may I also ask another question because I know this is a a staff directive so it's nothing that will take um necessarily direct impact or what have you but this I mean if we're looking at higher education institutions and um things like that I'm thinking about the lower to moderate income families that are paying into those institutions and what that may possibly do for the fees that families are paying to have their children to attend these different education institutions or what what that does to to the people that are that are eager to you know if you have a student that's attending the university in Minnesota and the family is already you know struggling to pay that tuition I know because I just did it with my son graduating then what is the cost then does it change the cost would these increases of taxes then come down on these institutions or what does that look like.

Councilmember onesley would you like to address that?

Yes I would uh council member warren I think one thing to emphasize is again this is a voluntary program so any department or institution that will opt to participate um they're doing it under their own volition.

This is also not considered because of that voluntary status a new tax.

It's essentially we already provide services to many of these institutions, but we don't receive revenue because they don't pay property taxes.

So this is getting a sense of what are those services what would be the fiscal amount to them if we actually charge some of these institutions but I think it's important to highlight that in the report, it does say we need to do further analysis.

This is what the legislative motion intends to do.

This is simply voluntary of a program.

It would not be leveraged as a new tax as a result of that.

And in the report, it does talk about University of Minnesota um in the university of Boston as an example where this has been effective.

So I would encourage to also check out that as an option.

Okay.

Thank you for that.

Thank you.

Seeing no further discussion on the motion to approve this item.

All those in favor, please signify by saying aye.

Aye.

Those opposed say nay.

Any abstentions?

The ayes have it, and that motion carries.

Next, uh, our next item is a report regarding the estimated revenues and expenditures for the 2027 to 2028 budget.

Um we will have a presentation from the budget department.

I will invite budget manager Justin Carlson to join us and begin this presentation.

Welcome, Mr.

Carlson.

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

My name is Justin Carlson.

I'm the budget manager in the Finance and Property Services Department.

I'm joined today by Deputy Chief Finance Officer Jane DeSenza and Principal Budget Evaluation Analyst Ben Zimmerman.

And we are here to present on the 2027 and 2028 current service level or CSL budget calculations.

Also, like to take this opportunity to thank the budget team who joins us today, Liam, Enos, Daniel, Bethlehem, and Margot for their tireless efforts to get to this point in the budget process that is coupled on top of implementing a new budget software platform, ClearGov.

So it's been a very busy team, and I'm grateful for all of their work.

I'm also pleased to introduce the city's new budget director, Sean Green, who joins us in chambers today.

Sean most recently was leading a team at the National Geospatial Intelligence Agency in Washington, DC.

I know I and the rest of the budget team are very grateful that he will be here to share his expertise and lead our team.

He just finished week one here at the city, and I know he looks forward to presenting to you all in the near future.

This presentation covers the estimated revenues and expenses for next year's start to the biennial budget, which includes the 27 budget, which will be adopted this December, as well as a plan for 2028, which will form the starting point for the 2028 budget process.

The CSL calculation is an important reference point in the budgeting process required both by financial policies and the charter.

Mr.

Carlson, do you have a presentation that you want to have?

Okay, perfect.

Getting to the agenda here.

Yep.

It's required by city financial policies and the charter to show revenues and expenses.

We're policymakers to take no action to increase or decrease the budget.

This presentation will also be given to the Board of Estimate Taxation later this week on Wednesday.

So to the chair's point, this is a brief walkthrough here on the agenda and our plan for today.

So we want to take you through the budget building blocks so that you understand the journey of the budget process from December 2026 to now.

We will review expense drivers and why we're seeing the numbers that we're seeing specifically within the general fund.

We'll close things out with a revenue forecast and next steps in the budgeting process.

While this is a technical presentation, narrowly focused on the 2027 and 2028 CSL.

You can expect to hear more information on department programs as part of the budget committee's work later this fall.

Throughout these slides, you'll see bar charts that show prior year actual spending as well as projections.

Historical actuals were included as a reference, but they're not the focus of our presentation.

This is a forward-looking discussion as we move through the 2027 budget process.

I'll now pass it over to Deputy City Finance Officer Jane DeSenza, who's going to touch on some key financial takeaways.

Good afternoon, Jane DeSenza, Deputy CFO.

With uh many decision points to come in this budget process.

This presentation is one stop along the way to a balanced budget in August.

Finance will be working throughout the summer to refine the data that you're seeing today, and also to incorporate any Merrill recommendations before transmitting that budget to all of you.

Today's presentation does not include any new decisions.

So this is a transparency measure indicating a starting point before policymaker input.

And it's important to provide some guardrails around this information.

As is typical at this point in the year, not all funds are completed.

Notably, our capital budget, which constitutes hundreds of millions of dollars, is still under committee review.

So you will notice that exclusion of that fund from the overall data.

It will be added in the August recommended budget along with our enterprise funds as well.

So again, we continue to refine all of that data with stakeholders across the enterprise.

Today we should think of these numbers that we're providing to you as estimates, and please know that there's a focus on the general fund.

As Justin noted, implementation of the new budget software has impacted our work this past spring, including our timelines for analyzing the data that we've presented.

So as always, we'll continue to refine throughout the summer.

So far, though, when we look at all funds, we are seeing modest increases in both revenues and expenditures.

If we look at all funds, expenses are increasing about 3.1%, while revenues are increasing at about 2.6%.

As we narrow down into the general fund, we see a sharper contrast, but the same trend.

Expenses in the general fund are increasing at a rate of 5.1%, with general fund revenues only increasing at 1.9%.

And that does not reflect any updates to the property tax levy.

It is typical at this point in the year to show a gap between expenses and revenues.

Due to the nature of the current service level methodology, our expenses and many categories grow from one year to the next, but our revenues do not inflate in the same manner.

So this year we enter decision making with an estimated gap between expenses and revenues of between 28 and 33 million dollars.

That becomes the problem to solve throughout the summer as part of the mayor's budget process, alongside consideration of any other funding needs.

Again, this problem will be addressed with a balanced budget recommendation to this body in August.

The reforecasting process, which began in January, revealed cost increases in several categories, which will all be explored in future slides.

In short, though, the cost of providing internal services to all city departments is impacted by broader economic factors.

So we are experiencing increases across our internal service funds, and that's driven primarily by inflationary impacts on fuel, utilities, parts supplies, and maintenance costs.

It's also important to note that the city's fund balance decline, which you've heard about from the city controller, has an impact on future revenues.

So as we have fewer dollars in our accounts, we are generating less interest for the city.

We are forecasting reduced interest earnings that equate to about one point on the property tax levy.

As noted, this presentation is largely focused on the general fund.

However, there are many levies that comprise the overall property tax levy that we discuss and that the city adopts in December every year.

So this slide is meant to show you all of those levies that combine to the overall property tax levy, and this is with no changes as adopted in December of last year.

We are most often referencing that total property tax levy line towards the bottom of this table.

But you can see at the orange arrow at the top is the general fund portion of that levy.

There are also levies for the park board and the BET in this table, among others.

So the levy represents the percent change in the dollars collected from one year to the next.

In short, how much more money does the city need to bring in from the prior year?

We anticipate many increases to our expenses year to year, and those are reflected in this table.

We plan on consistent pay raises for our personnel to keep up with steps, colas, and bargaining unit negotiations.

We plan on health insurance becoming more expensive year to year, and we also assume some inflation in our internal service charges.

So as you can see, we had already planned for the property tax levy to increase by 5.4% in 2027.

But we know that we have to revisit our assumptions annually to make sure that we have captured any changes that need to be made.

So that is the objective of this presentation.

Informing you of those changes, that you understand the updates to our cost drivers, our revenues, and how that might impact your future decision making.

As we talk about the general fund, this slide gives you a sense of the scale of general fund as it relates to other funds.

So the general fund is the blue portion there.

So we're looking at $744 million or about 40% of the overall budget as we've calculated it thus far.

The general fund is the focus because it is predominantly property tax supported.

And fund descriptions for the other areas are included in the budget books as well as the quarterly financial reports.

And if you need help understanding or navigating any of those, please just reach out to finance.

This slide gives an indication of our reliance on property taxes over the years.

So we've broken out our general fund revenue in this visual to three categories.

The blue line on the top represents property taxes.

Below it is the red line for non-levy revenues, so things like fines and fees.

Green shows intergovernmental revenues like local government aid.

So as you can see here, the red and green lines have remained relatively stagnant.

As expenses increase, that means that a greater share of those costs are being shouldered by the property tax levy.

And while we're not talking about the capital improvement program today, it is an important part of the city's budget, and is the uh function within our budget that has the most public engagement.

So our capital long range improvement committee does really excellent work vetting the capital budget requests with city park board and the MBC.

That work is ongoing, so what we're showing you today is what was adopted in December of last year.

You could consider the 2027 planned column as the current service level for the capital budget.

So $343 million of planned capital spending is already included in the CIP for 2027.

And we have over the six-year plan about 1.7 billion dollars of capital projects.

And with that, I will turn things back to Justin.

Thank you.

Alright, so diving into the CSL.

I'll first note the CSL does not bind the council to any action regarding the budget in the future.

Rather, it explains where the budget would sit if we made no changes for 2027.

It indicates what the city would have to spend to maintain programs at current levels with current revenue estimates and known expenditure growth, such as changing wage levels and inflationary pressures on internal service costs.

It is a calculation and budget methodology.

It is not a great tool for retroactive analysis, but rather it provides a framework for what eventually becomes the adopted budget following policymaker decisions this summer and fall.

Without this baseline of the CSL, it can be hard to trace the impact of the decisions you all make.

So again, this is a snapshot in time, but the figures do help us understand the impact of policy choices, especially around the property tax levy.

There are three components that make up the CSL, as you can see on the slide.

These are personnel, internal service charges, such as fleet, rent, IT, and general liability, as well as non-personnel, such as professional services and training and office supplies.

The nonpersonnel base budgets are held flat.

So the only adjustments made to this component is the removal of one-time new budget proposals from the prior year that are not appropriate into the following year.

Throughout you'll see references to our city financial policies.

Those were adopted in December, and we provide those as references so you can dig in further if you'd like.

This slide shows you the roadmap and how we develop the CSL.

On the far left, our starting point is the 2026 adopted budget.

You can see the three expense components as well as revenue forecasts, which are updated and compiled to complete the 2027 CSL.

At the start of each biennial budget, we host a budget kickoff for departments where we provide a training about the specifics of the budget process and discuss budget capacity for the next year.

To develop the CSL, we are running many processes concurrently as we update personnel, allocation models, revenue forecasts, and we place a lot of demand on city departments, especially this year with the implementation of ClearGov.

So we're grateful for their partnership and the time it takes to develop the budget.

The processes are guided by financial policies, again, that you all review and adopt.

So looking at the general fund, over the next few slides, we'll be diving into a snapshot of the CSL expense budget for 2027.

While this is just one side of the equation, it is prudent to understand the current costs of the 2026 adopted budget when rolled forward before turning to how to fund these expenses.

This slide is focused on the general fund, which is where a majority of our programs are budgeted, is heavily funded by the property tax, and it is where strategic decisions are made by policymakers to get us to an adopted budget in December.

It's important to note here that this is the cost of last year's budget today.

This does not include any new spending or reductions to existing programs.

Collectively, we see that salaries and fringe costs are increasing nearly $36 million from the 2026 adopted budget, and internal service charges are increasing $9.2 million within the general fund.

Policy allows for growth in the budget for personnel and internal service costs, while, as I mentioned, the non-personnel or discretionary base is held flat.

This ensures that policymakers are able to weigh requests against each other.

We'll now take a closer look at personal and internal service charges, those components of the CSL, starting with personnel.

With over 4,000 FTEs budget for the city, personnel is a significant portion of the total city operating costs.

We work closely with our partners in human resources and departments to complete our annual review of personal expenses in accordance with our financial policies, finalizing budget FTE counts and salary infringed for each permanent position to develop a comprehensive budget position by position plan that drives that budget amount for the following year.

Looking at positions within the general fund, salary infringed expenses have both increased in the 2027 CSL over what was included in the 2026 adopted budget.

Growth infringed expenses is outpacing growth in salary expenses with growing health care employer costs driven by a rise in the cost of medical care, as well as budgeting for costs associated with the state's paid family medical leave program.

The city has seen effective management of its medical self-insurance fund, which has allowed for more modest growth in premiums than was previously planned, and that helped that fund remains healthy.

But this year we are seeing a reversion to the mean as we join other entities in experiencing growing medical care costs.

The budget division plans for annual increases in personal costs based on growth assumptions that we revisit annually in collaboration with human resources.

The 2027 CSL general fund budget for salaries, wages infringes higher than planned, which can be attributed to those growing medical care costs, as well as administrative ads and reclassifications of positions that while budget neutral do increase the budget within this expanse category in personnel and job and class maintenance studies as well.

Additionally, we are more accurately calculating and budgeting for personal expenses as implementing our new budgeting software has allowed for us to correct for known limitations in our previous system.

You may note because this slide shows two years of historical actuals alongside the budget amounts, there are some differences in the categorization of expenses.

We currently budget all salaries and wages under base compensation, which you can see in the blue, and then as employees elect to use various leave and absence types such as vacation or sick leave, those are coded under leave and absences category.

Another note per financial policies, inflationary growth for agreed-upon cost of living adjustment step increases and the full cost of fringe benefits is accounted for within department budgets.

An exception to this is overtime, which per financial policy 1.5.5 is not inflated and requires mayor and council approval for departments requesting an increase to their overtime budgets so they can provide rationale to support their overtime needs.

To better illustrate how budget positions are adjusted as part of the CSL, we have a simple scenario to walk through.

In this example, a position that is budgeted as a salary of 120,000 with 48,000 in fringe benefits for a total compensation of 168,000 in 2026 could experience the following adjustments within the CSL.

The position is covered by a collective bargaining agreement that receives a 3% cost of living adjustment in 2027.

The current incumbent employee will move from step two to step three in the wage schedule.

These two adjustments have led to an $8,400 or 7% increase in salaries from 2026 to 2027.

Fringe benefits driven by salary increases such as FICA, Medicare, PERA, long-term disability, sick leave severance, and paid family medical leave grow proportionately with the increase to salary.

In this example, health insurance premiums are projected to increase 5%, and dental insurance premiums are projected to increase 3%.

And the rate of paid family medical leave is projected to increase by 0.1%, leading to a second increase in the budget for PFML.

These adjustments to fringe have led to a 1,845 or 3.8% increase in fringe from 2026 to 2027.

This annual growth in salaries and fringe has led to an increase in the budget for this position of 10,245 or 6.1% overall.

Applying this increase across over 4,000 budget positions is the main cause of increased personnel costs year over year.

As a reminder, this is just a simplified example, many factors influence these adjustments.

For example, if the health insurance premium is projected to increase 10% instead of 5%, that will double the premium increases for this position to 2,300 and raise the total fringe growth to 6.2% year over year.

Changes at the individual employee level can also have an impact, such as an employee who celebrate a life event that shifted them from individual coverage to family coverage can result in an increase of over $16,000 in the budget health insurance cost for that specific position.

Other changes may lower the budget amount for the following year, such as when a tenured employee who is at the top step of a wage schedule separates from the city and a new employee is hired at a lower step in the wage schedule.

This is all to note that while there is predictability to annual changes in personnel expenses, they're highly variable and change frequently at the individual position level.

Financial policies guide our team to budgeting for these increases to ensure departments have sufficient resources to cover known personal expenses in the following year.

Since 2023, the total budget FTE count has grown by nearly 270 FTEs across all funds and 166 FTEs in the general fund.

As we look at the change in FTEs from the 2026 adopted budget to the 2027 CSL, we see an increase of 18.77 FTEs within the general fund.

The table shows these changes by department for those that have planned changes in general fund FTE counts from the 2026 adopted budget, as well as administrative FTE changes made this year.

For example, two positions in the 311 Service Center are planned to start in 2027 to align with the opening of the South Minneapolis Community Safety Center.

These positions were included in the five-year financial direction of the 2026 adopted budget and are now reflected in the 2027 CSL.

Administrative FTE ads that were approved this year are also reflected, such as the arts and cultural affairs increase of one position that was presented to this committee in the quarter one update on administrative ads.

Additional administrative FTE changes reflected in this table will be presented in the quarter two report.

There are also planned funding shifts for positions that are moving on to the general fund.

For example, as the federal safer grant funding ended after Q1 of this year, those positions are now fully on the general fund.

In 2026, those 15 positions had 25% of their time budgeted to this grant, and starting in 2027, they will now be fully budgeted in the general fund.

That leads to a 3.75 FTE increase to the general fund from 2026 to 2027.

These changes to budget positions lead to these increases in the general fund personnel expense budgets for 2027.

I'll now turn to internal service charges.

Internal service departments are those that provide goods and services to other departments within the enterprise on a cost recovery basis.

The primary purpose of internal service funds is to enhance the efficiency and effectiveness of city services by centralizing shared resources across departments, which is an approach that is considered a best practice.

Property services, IT, fleet, and general liability are the ones that we mention here because they are allocation model driven to distribute their costs to departments.

We asked the departments who provide these services to generate an expense budget that maintains current service levels.

This process begins in January.

We then review those expense budgets and their proposals alongside the controller and the CFO and decide what is a current service level that is appropriate to fund for the following year.

This is the same process that was followed last year.

There are no changes to methodology.

Those budgets are then allocated out to departments according to each internal service department's allocation model.

These cost models are determined using considerations like department FTE counts, historical actuals, identified department specific projects and needs, and for general liability and actuarial report we receive annually helps informs the numbers we see there.

These charges are about 14% of the total operating expense budget, and the charges have increased across all funds by 16.8 million and 9.2 million within the general fund in the 2027 CSL compared to the 2026 adopted budget.

Increases are primarily driven by those inflationary pressures to service delivery and supplies, growth in the total square footage of facilities managed by property services, and higher general liability projections to account for the financial risk of future claims.

This is a visual of the four allocation model changes and their charges within the general fund as we look at year over year impacts.

It's also important to note that changes in personal costs feed into growth in internal service charges.

As we add positions, we probably need to add workspace or technology or perhaps a vehicle.

Another example is when buildings come online.

There are increased needs for custodial and security services.

General fund departments are provided the budget to pay for their internal service charges each year for financial policy 1.5.6.

So there's no impact on their operations, although there is a real impact to expenditure growth within the general fund.

That concludes our portion on expenses.

I'm now going to hand it over to Ben, who will discuss revenues.

All right.

Thank you, Justin.

Good afternoon, budget committee.

My name is Ben Zimmerman.

I'm a principal budget and evaluation analyst in the budget division.

To this point in the presentation, we have largely focused on the city's current service level expenses.

And now we'll transition to here about how we're paying for those through our revenue forecasts.

We will first briefly be looking at all funds, then diving a bit more into local option sales taxes and downtown assets.

And then ultimately the general fund.

As has been noted several times previously, we will largely focus on the general fund and some key revenues there, because broadly speaking, that is where funds are most flexible and most decision making is made.

Revenue forecasts are developed through extensive collaboration with subject matter experts throughout the city, so I do want to give a quick thank you to the dozens of individuals citywide who've furthered this work.

Okay, before getting into local option sales taxes and the general fund, we will first walk through one brief slide on enterprise-wide revenues into all funds.

As with all revenue slides we will be presenting today, two revenue categories are omitted transfers and use of fund balance.

This is because it is more instructive to look at revenues from operations as opposed to revenues from decision points like using existing funds or transferring funds.

As was stated earlier, revenue forecasts for enterprise and capital funds, as well as certain special revenue funds like grants and the downtown assets are still under development.

When finalized in the coming month or so, the 2027 and 28 revenue forecasts will be updated.

The inclusion of that revenue data will shift these outlooks higher, correcting what is currently showing this visual as a contraction.

That's just the reality of data availability and the timing of the budget process.

Alright, and now we have a few more slides getting into, or before getting to the general fund.

First, first we're gonna have a slide on local option sales taxes or lost revenue, which is the primary revenue into the downtown assets fund.

Second, we have a slide showing the fund balance outlook for the downtown assets fund.

And third, we have a slide unpacking the downtown assets transfer to the general fund.

I know I previously stated that no transfers would be included in these visuals.

This transfer is the loan exception because it's an increasingly noteworthy expense to the downtown assets fund, as well as an important revenue to the general fund.

It is important to grapple with these slides collectively because the health of the lost revenues and the health of the downtown assets fund have direct implications on the ability to do that transfer to the general fund.

With that, let's first take a look at this visual of net lost revenues.

Generally speaking, it can be easier to talk about gross lost revenues because that makes for more of an apples to apples comparison year over year.

This is because in the past five years or so, there have been substantive shifts in what is withheld annually for things like the US bank stadium debt or the state of Minnesota Department of Revenue admin costs over these funds.

And with that said, to set the stage for our 2027 lost outlook, I think it can be useful to pause and briefly talk through the gross revenue trajectory since 2020 because this was a revenue hardest hit by COVID in the city.

The period from 2021 to 2025 can be characterized in three phases, following uh 2020 gross revenues falling off sharply, contracting 45% down from 92 million down to 50 million.

We first had phase one recovery where there was rapid growth growth largely in 2022, when our gross revenues got back to near pre-COVID levels.

In phase two in 23 and 24, we still saw heightened or elevated annual growth of these revenues about 9%.

And then phase three is where we find ourselves today.

Uh, in a post-recovery leveling out, our 2025 revenues came in largely flat, and the outlook moving forward is much lower and more moderate growth for these revenues.

To move into 2026, our Q1 gross revenues were nearly 2% ahead of 2025 Q1, which is surprising given operation metro surge.

But what we're seeing in the reporting is that while certain sectors like food service were significantly impacted during Q1, sales tech, sales tax collections in aggregate across all industries actually remained relatively strong.

Looking ahead to 2027, we are presenting right now the planned growth of 2.9% in the 2026 adopted budget.

We're still in the process of developing the lost forecasts because it's best to give ourselves an additional month or so to continue observing current year performance before we lock in our budget for next year.

But tentatively speaking, given what we're currently seeing in 2026, and alongside the forecast data we leverage for our work, we do not anticipate the 2027 to 2032 forecast to shift uh substantively, and again, that's annual growth in the 2.5% to 3% range.

Now that we've talked through the downtown assets revenue, let's move to another slide to talk more holistically about the fund balance outlook in the downtown assets fund.

As a note, the convention center downtown assets and target center finance plans are still under development.

So here again, we're looking at data corresponding with the 2026 adopted budget.

Despite this, the data is still quite informative.

Looking at our six-year outlook for the fund balance, we have it forecasted at 81 million in the downtown assets fund in 2026, dropping to 48 million in 2031.

Since this outlook again coincides with the 26 adopted budget, there are no further updates from the current year, so no current or revised actuals.

So for example, the $7 million transfer for the small business resiliency fund, again in response to Operation Metro Surge is not reflected, including that would bump the line graph down.

So lastly, uh I do want to note that we've included the financial policy language relevant to downtown assets fund balance requirements here on this slide.

Okay, now that we've talked about again those the revenues and the downtown assets fund balance outlook, let's move on to one final slide on this topic to explain more about the downtown assets transfer to the general fund.

Before the lost revenue can be considered for transfer, it is it first supports debt service obligations, operations and maintenance and reserve requirements of downtown assets.

Again, these downtown assets include the convention center, the target center, withholding for US bank stadium debt, PV plaza and the coal center.

Once those costs are accounted for, the general fund transfer is determined in accordance with the fund balance outlook, any fund balance requirements in financial policy, and again taking into consideration eligible spending in the mayor's recommended budget.

So the transfer determination is a matter of balancing the health of the fund balance and eligible uses in the general fund, namely speaking economic development.

So for an entirely theoretic example, if we're able to find $100 of eligible uses, that doesn't necessarily mean the entire $100 would be recommended for the transfer because we need to ensure that the transfer is fiscally prudent given all the financials of the city.

In recent years, the general fund transfer has been amended through the budget process as well as outside.

And so just to talk through the 2026 example, finance recommended a transfer for the 2026 budget of 47.4 million through amendments to the budget that transfer increased to 49.8 million, and that was for eligible uses being allocated in the general fund.

And then more recently, again, outside of the budget process in response to operation metro surge, the transfer was further increased to 56.8% to support the small business resiliency fund.

The bottom line, we're just trying to reiterate through these three slides together, is that moderating lost revenue growth and the outlook for the fund balance means the downtown assets to general fund transfer will not be as sustainable moving forward as a tool to support the current service level, and something we need to continue to monitor.

With that, we can now transition to focus fully on the general fund revenues.

And as I noted earlier, this visual excludes transfers and use of fund balance to focus on external revenues.

The outlook for 2027 remains slightly positive, though lower growth than prior years.

Specifically, we're forecasting 2.4% year-over-year growth in 2027.

Per the five-year financial direction, the general fund levy has planned growth of 4.8%, and the remaining general fund revenues here aggregated as non-levy revenues are forecasted to actually contract 0.6%.

For clarity, I will note that the levy revenue is included in the taxes revenue category on this slide, so that's the blue bar, and it is the majority of that revenue.

And we'll unpack that briefly in an upcoming slide.

In terms of the non-levy revenue, that's everything else on this slide.

And the modest forecasted contraction is different than what we've seen in prior years where non-levy revenues were typically growing closer to two to three percent a year.

One notable increasing revenue category is intergovernmental revenues, which are forecasted to grow 3.5%.

This is due to an increase to a few state aids, notably in the police and fire departments.

Broadly speaking, the growth is attributed to increased officer counts and MP MPD, because officer count factors into the level of state aid, and new revenue in fire, which is meant to offset PTSD leave.

In terms of notable decreasing revenues, interest revenue is forecasted to contract nearly 30% year over year or $5 million.

This is again largely due to reduced fund balance, but also worsening rates and yields for investments.

And so the year-over-year decrease in revenue outlook for the non-levy revenues, that's far and away the most noteworthy change here that's driving this contraction.

Franchise fees are also forecasted to contract about 3%.

In 2024 and 25, franchise fees revenues came in about $3 million under each year.

This forecast does take into consideration the increased revenue from the recent rate increases approved by council last fall for implementation in the current year.

The modest contraction is a right sizing just for the under collection the last two years.

Lastly, non-business license and permit revenues are forecasted to contract about two percent.

This is largely a dampening of expectations for revenues related to development activity in the city, specifically reduced permitting revenue and plan review revenue in CPED and less fire inspection revenue and reg services.

Those revenues did underperform in 2025 as well by $3.5 million, and 2026 is off to a sluggish start.

Staying within the general fund, we have two final revenue slides just to drill down into the two largest revenue categories: taxes and intergovernmental revenues.

First, taxes, which is the largest one into the general fund.

The property taxes or levy revenue accounts for the vast majority of this.

In 2025, levy uh revenue was roughly 54% of general fund revenue.

The property tax revenue forecast shown here does follow the five-year financial direction as documented in the 2026 adopted budget.

One final note that the plan levy presented here does not take into consideration new or reduced spending.

Again, it is directly from the five-year financial direction in the 2026 adopted budget.

And lastly, intergovernmental revenues are the second largest revenue in the general fund, and local government aid or LGA accounts for the majority of this.

LGA is about 10% of the general fund revenue and roughly 80% of intergovernmental revenues.

2027 LGA is forecasted to hold flat from 2026, and which is essentially on par with this revenue level before COVID.

And total expected LGA from the city in 2027 is 71.7 million.

And lastly, I will note that the total city of Minneapolis LGA certification is forecasted closer to 82 million, but per ordinance, nearly 12% of that is shared with MPRB and a smaller amount with MBC.

And with that, I will turn it over to Jane.

Okay, thank you all for your attention.

We've we've given you a lot of information today about the budget process and the trends identified in the data.

So we started with that estimated gap between expenses and revenues, and then we explored more deeply why that gap exists, even with a planned levy increase.

On the expense side, we walked through the three main expense categories and then covered the revenue trends as well.

The general fund, as we've said, is the portion of the city's budget where you all spend the most of your time in decision making, and it is that most flexible portion of our budget.

Despite that, there are elements of the general fund budget where we have less control.

Some non-personnel expenses are impacted by inflation and tariff policies.

Personnel costs are subject to collective bargaining and state requirements like paid family leave.

And so all of these factors influence the budget context that we find ourselves in.

Part of our charge in finance as we're going forward in this biannual budget process is to limit risk and to make sure that the city remains an affordable place to live.

So we will be spending our summer looking at all possible levers within our control to maximize revenues and thoughtfully prioritize spending needs.

So in May, we had departments submit reviews, budget proposals for submission to the mayor throughout June and July.

We are here presenting to you at Wednesday to the BET.

And we're also making presentations to the mayor for his consideration for budget items for 27 and 28.

In August, we'll have the mayor's speech and concurrent with that.

Our budget book will go live.

In September, the budget is really formally transmitted to this body, and so there will be some form of budget overview presentation from the budget division, as well as department reviews.

In September, the BET will set that maximum property tax levy, which sets the sets the ceiling of what we can spend for 2027.

And then throughout the fall, of course, we'll have public hearings in a format to be determined by the budget chair along with final budget markup in mid-December.

So with that, we're concluded with our presentation and can stand for any questions.

Thank you for this presentation.

Mr.

Carlson, Ms.

DeSenza, and Mr.

Zimmerman.

Colleagues, are there any questions related to this presentation?

Can I pull up here?

Is that management quick?

I believe President Payne is first.

Yeah, I'll recognize Consul President Payne.

Thank you.

Thank you, Chair Chucktai.

Uh I have a few questions, so I'll just maybe go from the top of the presentation down.

Page four, you know, I'm it's kind of alarming to see this 28 to 33 million dollar gap between revenue and expenses.

I did go back and look at past presentations, and it looks pretty standard that there is this mismatch at this stage.

Um but in the other presentations, we don't have a real sense of the scale of that gap.

Um so as an example, the general fund gap here, well, it's not one-to-one, but it's five percent expense and increase to roughly two percent revenue increase.

But then in previous years it was uh 3.89% expense increase, 3.64 revenue increase, which is pretty close.

Um, a decrease of 0.48 and a decrease of 3.64 in 2024, and then we only had the uh total fund delta 2.1 uh increased expense, 4.3 increase in uh revenue.

Uh I didn't get a sense of the actual dollar amount in those past presentations.

So as like an administrative follow-up, could we get a sense of those dollar amounts?

Um through the chair, council president Payne.

I the one that I have on the top of my head, I think in the 2024 budget process, we had about a 20 million dollar delta.

Okay.

Um so it is typical.

I think we are seeing um, I think the the revenue is a key part of this story where we are not seeing that natural growth in revenue anymore that has sort of picked up the tab.

We have we are also you know fully exited from ARPA at this point, which was an important way that we we paid for our expenses over the last five years.

Yeah, maybe if we could skip the administrative follow-up, could you just give me like a ballpark of what that gap is?

If it's like anywhere between 20 and 30 and that's normal and we shouldn't be alarmed, or if it's normally in like the five to 10 and we should still be alarmed, it would be a good to get that sense.

Chair Chugtai, Council President, this is a large gap.

Um, I won't I won't sugarcoat that.

We have a lot of work to do, um, and we will do it, but I would say that this is a substantial gap that we're facing right now.

Okay.

Um and then on page 16 for internal service charge allocation model.

Um, I don't feel like I've ever seen our allocation model before, and I don't know if I have a really strong sense of it.

I'm assuming it's based on activity-based accounting.

I'm assuming that there's things like interest and depreciation baked in.

I don't I don't know, I haven't seen the model before.

Um is that something that you could share with me?

Um, Chair Chugtai, Council President, there are different models for each of these four elements, and they're all they're all very complex, but yes, you're right.

They're based on property services, for example, takes a look at where everybody is sitting in the enterprise and figures out what it costs to provide that level of service for each of those desks.

So as departments are growing their head counts, those costs are going up as well.

Um technology is similar by FTE, you know.

Um, while not every city employee has a laptop, everybody uses our city IT infrastructure to some degree.

Um, so it's based on inputs like that, as well as specific um software software systems that those departments use.

So I don't know how illustrative just handing you the models would be, but I think if they're just have the models and dig into it if it's possible.

I I might suggest that we do some sort of study session to walk through that information, but we can certainly connect offline about that.

Let's connect offline and maybe do both.

Uh and then uh I'm not sure that overtime is accounted for in the CSL.

Is it?

Um that's correct.

I believe Justin spoke to that.

So overtime is not part of the personnel complement that inflates year to year.

So in financial policies, it's treated separately with the idea that this body is getting an explanation of what the overtime ought to be.

Um we were in the habit for many years of bringing you an annual overtime proposal.

That's that's fallen off, but um I I would anticipate that that will be part of our budget process this year.

Can you speak to like the model assumptions for forecasting overtime?

Um through the chair, council president.

Um the two main departments, of course, that use overtime in a significant way are police and fire departments, and we look to those departments to get us an estimate of what they would need year to year, which then finance would vet against prior year performance.

Um what becomes difficult, I think, when we're just looking at prior year actuals is of course those contracts have changed quite a bit.

So the hourly rates have have gone gone way up.

So you do have to do some analysis to figure out what that might be.

So I believe our approach this year will be to get those proposals from the departments, apply some rigor and friendly skepticism to everything that we get, and and make a recommendation to the mayor.

This is one I'm gonna be the most direct on.

Um absolutely not possible to accurately predict down to the second what overtime is gonna be, and you can never guess that a massive school shooting is gonna happen, elected leaders are gonna get assassinated, and the federal government's gonna invade your city.

These are not things that you build into your model typically.

Um so I wanna give the caveat that there's no way we would have guessed the right amount of overtime this last year, but they're at the same time a 5x delta is like you need to be within an order of magnitude in your forecasting as well.

And so my expectation is that either we're managing that overtime so it doesn't get so out of control, or we're accurately forecasting it, so we're not left holding the bag when we fall short of the amount of money that we were allocating for that.

And so I really want to encourage us to take a very realistic lens at overtime.

All we can do is approve the budget.

We cannot make departments manage to their budget, and so if we're going to be approving a budget, I want that number to be accurate and real and not off by orders of magnitude, but that's a that's just kind of a comment.

And then my last question, um the downtown asset fund was continuously decreasing.

I know we had a robust conversation about transfer, but I was just I I didn't necessarily walk away from the driver of that.

Are we expecting those decreases because we're decreasing our expectation of revenue collection, or was that more a reflection of what our approach is to the transfer to the general fund?

Um, Chair Chug Tai, Council President, it's both.

So we had um because of that rapid return to normal that that Ben talked about, the rapid recovery, the downtown assets fund balance grew to quite a high level several years ago.

And so the finance department recommended that we ramp up that transfer.

The general fund needed support coming out of ARPA, and there was excess fund balance.

And so we have um drastically increased the transfers, that is part of it.

This body is has also increased the transfer above finance's recommendation for several years, so that's also part of it.

And we're also seeing this sort of plateau in revenues.

Um I guess one other factor that we should acknowledge is we added the coal center to the suite of downtown assets.

So we increased our uh responsibilities with those dollars before they can come to the general fund.

Um so this is why we revisit that transfer amount annually, just to make sure that we're leaving enough money for those those assets that are so important to our downtown and also alleviating pressure where we can and the general fund.

So, what we're looking at on that graph, and I don't remember that's the one slide I didn't write the page number down.

Um, because the timeline starts in 2024, we don't see the big Taylor Swift spike essentially, and the uh giant cliff drop from COVID.

And so we're just looking at the peak and then going forward from there.

Correct.

Okay, thank you.

Thank you.

Next, I will recognize Councilmember Wansley.

Thank you, Chair Chuck.

Hi.

Um, so back in April, uh Director Dizens in my office reached out to you about an update regarding the fee study that council passed nearly two years ago.

Um, and you shared that the fee study changes would be incorporated in today's presentation.

Um, and just for some clarity for some of my newer colleagues, um, council passed a uh legislative directive two years ago asking um for the administration to complete a comprehensive fee study um so that we could have a better understanding of areas where fees are not being fully optimized to cover the full cost of various city services.

Um I know I advocated for this because fees are currently a tool that the city can leverage uh to make city services more financially sustainable, um, and also thus offer relief to taxpayers, but I will know I'm not seeing anything related to this fee study or any specific changes to how fees will be increased or decreased in this presentation as was requested in that legislative directive.

It's also not clear what departments will be impacted and if the projections that we were told about or are looking at in this presentation take into account uh those potential changes.

So can you clarify?

Um, if the finance team actually did a comprehensive fee analysis, and if so, are those uh projections you're utilizing for 2027, or are you currently using our existing fee levels?

Chair Chuck Tai, Councilmember Wansey, I did promise your office an update, which is in my notes and I forgot to say, um, we are still underway with the fee study.

It's a massive endeavor with upwards of 600 fees and probably four or five departments, with you know, perhaps dozens of city staff um involved in the analysis.

And so we are continuing to do that work.

I would have loved to incorporate it in this uh presentation, but we do not yet have any findings.

Do you have a timeline?

Because again, this has been nearly two years that we've been trying to troubleshoot the completion of this.

You have a timeline of when we would get uh initial preliminary presentation on that since that didn't happen in this presentation.

Yes, through the chair.

I don't believe I promised to incorporate any findings in our email.

I'd have to go back and look.

Um, I'm more than happy to include in limbs as well.

Great, thank you.

Um I anticipate that we should have something in the next two months, and so if there is an ability to incorporate anything um in the fall, we can discuss it.

I would caution this body.

I don't know, we don't have any conclusive proof that that will mean revenues can go up.

There may be some that have to decrease as a result of the inquiry.

Yeah, and I think again, the intent of the legislative directive, because we have not gotten consistent understanding of what our fees are either being optimized or being underulized, which also comes with their various amounts of risk.

Um, but also meaning taxpayers are then showing shouldering the burden for some services like off duty, for instance, that could be transitioned off of the general fund and into an actual fee to cover the cost of that program.

Um so we do know that could have an impact when we're looking, you know, going forward on the actual numbers.

Um but that I will name in the email we were told by you we will get an update in this presentation.

We've been trying to get that for some time.

I hope in two months we will actually see a definitive update so that we know as we're having conversations about the upcoming budget and things of that nature, um, what we should be assessing as another way to offer some relief or make changes regarding our amendments.

So just want that update.

Thank you.

And finally, I'll recognize council member Rainville.

Uh thank you.

On slide 21, you show a drop in uh sales and use taxes.

And I'm just curious what why do you think that is, please?

Do you want to add one?

Um through the chair, Councilmember Rainville, are we looking at the 2026 revenue?

So I'm looking at the uh 2024 and then drops in 25 and it barely comes back in 26.

And it does show minimal growth, but I'm just wondering what was 24 just a really good year.

Is that what it was?

Through the chair, councilmember Rainville, that's a that's a great question.

I think we can get you a definitive answer in writing if that's right.

Yeah, okay.

Just I want to let you know I'm paying attention.

I see that.

Wonderful, thank you.

And then I'll recognize uh Vice Chair Schaefer.

I had some questions around just to kind of set the table, um, with this gap of 28 to 33 million with the 5.4% already baked in, um, are we sitting roughly then if we were to go directly from property taxes only without any efficiencies or other ideas and revenue growth, we would be close to 10% increase.

Is that what if it was about seven, forty million?

Is that about 1% increase for every 7 million?

Is that would that be an accurate?

What would be the number levy?

Not the levy number without any efficiencies or revenue growth.

I've made a pledge to never do math at the podium, but you can see the total property tax amount that we have projected to collect is 574 million, and so one percent of that you could consider a point on the levy.

So 5.7 million would be a point.

Okay, about six instead of seven.

Okay.

All right.

All right.

That's helpful.

And then, you know, as we head into these discussions individually in our wards with uh mayor, obviously, that's all to be happening.

But is there any high level from the staff's perspective?

Are you leaning into efficiencies?

Are you leaning into revenue?

Are you leaving into the levy?

Can you can you tell me where staff are paying attention primarily?

Mm-hmm.

Um through the chair, uh Vice Chair Schaefer.

Um I'm always careful not to get ahead of any uh any decisions, but I I think it's clear, and and this body's already had many conversations about about the overtime picture for our safety department.

So I think you should anticipate that we're we are very much interested in finance and not continuing to see the fund balance decline.

So that's a primary focus of our department.

Um the budget process was set up to allow departments to make asks of the mayor.

Um, and so that is important, I think, as having that method for departments to get feedback from the executive.

I think is is a valuable exercise, even if he has to say no to many of the requests.

Um revenues are that we have little we can control there.

We will of course, if there are fees that can be increased, that would be before this body in September typically.

Um I should say there is also a high level efficiencies effort to look at um to look at services that we might be able to trim back on or you know consider how we coordinate with other jurisdictions.

So all of those factors are swirling, but I would say the finance department most concerned about fund balance and and writing that ship.

Great.

And how would it be most helpful for staff to hear from council members around their ideas around those buckets?

Would it be defeated through the mayor's one-on-one short meeting?

Is it to maybe give you a list of ideas?

I mean, how how would you like, or do you want us to hold off until August and then dig in?

I I'm you know, being new, I think I just appreciate what is helpful, what is not helpful from the city staff perspective.

Sure.

Um Chair Chuck Thai, Vice Chair Schaefer.

I think those one-to-ones with the mayor are really the best way for you to share that direct feedback with the mayor.

Um, you know, staff tries to not be uh advocating for one policymaker over another, but I think that's a great area to dig in and share your thoughts.

We have robust interactions with mayor's office over the summer as we're building the budget, and those conversations that you all have with the mayor do typically wind up in our decision meetings, so they they do matter.

Um, so I would start there.

I'm of course, you know, always happy to hear if there are things that you all want to prioritize, and you can feel free to email me with those.

Um, happy to take a look and offer feedback if you want feedback.

Thank you.

I'll just want to say thank you for this presentation.

It's very interesting, and I'll look forward to looking into it and more carefully.

And then just anecdotally, I've heard our parking fee ramp or our city parking ramps are very um uh low in price to compare.

I've heard from competitors, you know, that we you guys are undercutting us all the time.

So that's just anecdotally, I'll share that.

Thank you.

And then finally, I'll recognize council member Stevenson.

Um, these questions uh may or may not be for staff.

I think they're probably for my colleagues, um, but they were just brought up questions that I had based on on what I heard in the presentation.

So maybe you chair, uh, might be the first person to take a stab at these.

Um, it was mentioned that uh departments have to ask for additional overtime.

Uh that's not been my experience, uh, my short experience.

Can you tell me more about that?

Uh I actually I don't think that's that's what the that's what staff was sharing.

What staff was sharing is uh overtime costs are not built into the current service levels assumptions about growth uh year after year, and that financial policies dictate that changes to overtime budgeted costs must be brought before uh decision makers as part of the budget process every year.

So they we have to reassess them in a way that that isn't um that doesn't assume growth over time.

Um Mr.

Senza, did you want to add anything to that?

Chair Chuck, I agree with that assessment.

I think the distinction is the budgets versus the actuals.

So the finance department similarly does not have a stop where we say, okay, the police department has spent X on overtime for this month and they're done.

Um which I think is what you're driving at.

Okay.

That's correct.

Um another question that is not for staff, but maybe for my colleagues, just to help me understand.

And I'd like it if we could all hear it at the same time.

But what are our powers around budget deviations?

That's the million dollar question.

Um, two billion dollar question.

Yeah, funny.

Um, generally speaking, I think our financial policies outline the levers of control that are um that different actors are empowered to utilize, whether that's the council, whether that is finance staff, budget staff, um, etc.

The chapter nine of the city's charter outlines all of the different financial responsibilities of the city and and um gives most of those to the city council, with the the significant exception of the uh proposing of the annual budget that that lies with the mayor.

Um the council adopts the annual budget every year, and um budgets uh are managed by departments.

The management of departments happens at the executive level.

Okay.

Just at a very high level to attempt to answer that.

No, I appreciate that.

Could I actually ask the same question to the attorney?

What are our powers around budget deviations?

I think this yeah, just keep in mind that you're not gonna be able to.

Correct.

Um through the chair, that's just kind of an impossible question to answer in general.

You know, each time there's a budget amendment that comes in, you know, that's something in the budget process.

The city attorney's office, along with staff, along with policymakers, evaluates, and we determine, you know, on a case-by-case basis, you know, how that's gonna work.

So it's not something that's very easy to just kind of give an answer to uh, you know, from the dais, you know, in a short way.

Okay, all right.

Thank you.

I just really wanted somebody to tell me that there were no rules uh out in public.

So thank you for uh for humoring me.

Lots of rules actually.

Okay, sounds good.

Um I'm not seeing any further discuss.

No, we are seeing further discussion.

Is that the president in queue?

Council President Payne.

Thank you, Madam Chair.

I actually was just gonna take an attempt at answering uh councilmember Stevenson's question and do it in a very simple way.

Um I think the only thing that stops this institution from overspending is the public and their relative engagement on what we do here and whether or not they are outraged or supportive of it.

That political pressure drives everything else, right?

So the authority to make sure that a department doesn't overspend is solely with the mayor.

Uh it's delegated down through the hierarchy, it's the department head that's responsible for managing that budget, it's individual frontline workers to manage their schedules and the supervisors to manage their schedules.

But when things are out of out of control, that all is under the authority of the mayor, and it is the outrage of the people at whether or not that is under control or not under control that leads to behavior change and consequences.

Oftentimes those consequences are electoral.

We have just had an election, so it's just a matter of if people are upset about the way the money is being day-to-day managed, we need to hear about it, and specifically the mayor needs to hear about it when it comes to managing to that budget.

We get to set the budget, we are the authority that sets that budget.

Uh, but it when it comes to the day-to-day management of that but budget, the ultimate authority is with the mayor, and the only thing that can affect that is the relative engagement of the residents of Minneapolis.

Uh Councilmember Wandsley.

Thank you, Chair Chuck Thai.

I would speak to what's within our will house.

I would say um looking at financial policies, that's actually an area where myself, I know Councilmember Chugti, we have brought forward um financial policy changes to really um deepen oversight over what feels to be continue uh just mismanagement of our city's resources at the most baseline by the administration.

And one of the fruits of that is um we passed a policy amendment last December that says as it relates to any council appropriations, um, those implements or the implementation of those, or if there's any changes that the administration wants to make to not implement um any, you know, council initiated budget amendments, they need to come before this body and ask for our approval or for uh denial essentially because what we have seen for far too often is we will make budget amendments and then they would not be implemented and then they would be um routed towards other city programs.

I can think of several examples, one being sidewalk plowing.

We allocated two years of funding for that back in 2023 and then learned that money for that was taken to another program and that was not in alignment with the budget amendment, and we had to do another one to save that.

Um, same with safety ambassadors.

It took a while to get that uh implemented, and we did a budget amendment back in 2023 for that.

So um those are one of the areas where we have been able to try to strengthen our oversight, um, at least on the budget amendment process so that the resources that we're moving to get the needs of our residents may met, that they're actually being enacted.

Um I would just want to highlight that as an example.

So look at other cities, like what are some of the financial policies that their legislative branches have utilized to make sure that resources are going where they're intended to go, um, and use it as a baseline to look at how we can revisit our financial policies here as like a legislative conversation.

Wonderful with that, I'll ask the clerk to file that presentation.

Thank you again to staff for bringing that forward today.

And with that, we've concluded all business to come before the committee today, and without objection, we stand adjourned.

Thank you, everyone.

Okay, so I think that's a good idea.

Okay, I think that's a good idea.

Okay, I think that's a good idea.

Okay, I think that's a good idea.

I think that's a good idea.

I think that's a good idea.

I think that's a good idea.

I think that's a good idea.

I think that's