St. Paul Finance & Budget Committee Meeting: OFS, CIB, & Debt Updates (Oct 22, 2025)
St. Paul Finance & Budget Committee Meeting: OFS, CIB, & Debt Updates (Oct 22, 2025)
The St. Paul City Council Finance and Budget Committee convened on October 22, 2025, to review the 2026 budget proposals for the Office of Financial Services (OFS), the Capital Improvement Budget (CIB) program, and city debt management. Presenters included Laura Loxon, Interim Director of OFS; Michelle Botcoe Woods, Senior Budget Analyst; and Neil Younghands, who was scheduled to present on debt. The committee focused on staffing, budget variances, grant management, and concerns regarding equity and transparency in the CIB approval process.
Consent Calendar
- No consent calendar items were discussed or listed in the transcript.
Public Comments & Testimony
- Councilmember Johnson: Expresses strong concern regarding the significant $1.5 million variance between the 2025 budget and actual spending, noting this pattern occurs across the city. Speaker advocates for real-time budget-to-actual reporting and quarterly reviews to inform decision-making, rather than relying on end-of-year data. Speaker argues that current transparency levels are insufficient, particularly regarding transfers and the timing of expenses.
- Councilmember Johnson: Raises concerns about equity and representation on the 18-member CIB committee, specifically noting a lack of representation from Ward 4 and the disproportionate reduction in funding for historical organizations in the North End. Speaker states that the current process lacks clear documentation of the reasoning behind project selections, making it difficult for the Council to assess or oppose specific recommendations.
- Council President: Reiterates concerns about the lack of detailed minutes explaining specific CIB project prioritizations. Speaker notes that decisions appear influenced by who attends public hearing workgroups rather than a transparent scoring rubric narrative. Speaker supports the Audit Committee's findings and calls for direct engagement with the CIB Committee Chair to better understand the rationale behind funding allocations, emphasizing that equitable investment is diminishing in the North End.
- Councilmember Bowie: Echoes concerns regarding the lack of Ward 4 representation on the CIB committee and the historical reduction in investment for North End organizations. Speaker highlights that only two committee members were present to review a pitch from a North End organization, suggesting that absence of key voices affects equitable outcomes.
Discussion Items
- OFS 2026 Budget Proposal: Laura Loxon presented the 2026 budget, which proposes a net general fund increase of $34,000. Speaker details a shift of 1.5 FTEs from the general fund to special funds (fleet and business support), a reduction in the attrition budget from ~$96,000 to ~$100,000, and proposed investments in grants management software, a consultant for priority-based budgeting, and a facilities management study. Speaker attributes significant 2025 underspending to intentional delays due to the July cyber incident and planned vacancies.
- Councilmember Johnson: Questions the sustainability of the attrition rate and the 45% variance in budget-to-actuals. Speaker inquires whether the proposed vacancies will be filled in 2026 and asks for clarification on the total proposed budget ($5.1 million) and the mechanism for funding changes.
- Councilmember Johnson: Requests a process for moving toward quarterly budget-to-actual reporting, noting that staff lack access to the Infor ERP system for real-time data and that transfers create opacity in the financial picture.
- Laura Loxon: Responds that staff can access daily data in Infor but that monthly/quarterly reporting requires significant additional effort to map out and qualify due to variable transaction timing. Speaker agrees to a follow-up meeting to discuss the feasibility of improved reporting.
- CIB Process and Transparency: Michelle Botcoe Woods provided an overview of the Capital Improvement Budget, noting that local general obligation bonds (including the CIB) make up only 3.7% of the 2026 budget, with most funding coming from other sources like MSA and assessments. Speaker discusses the front-loading of bond funds in the 2021–2025 cycle to capitalize on low interest rates, resulting in reduced available funds for 2026 ($3.9 million) compared to the standard ~$11 million annual allocation expected in 2027.
- Councilmember McCullem: Clarifies that "local general obligation bonds" and "capital improvement bonds" are distinct but related components of the funding structure.
- Council President: Questions the transparency of the CIB committee's decision-making, noting that minutes do not reflect the specific rationales for individual project selections and that scoring occurs privately without narrative documentation. Speaker requests that the CIB Committee Chair attend the November 10th meeting to explain their decisions.
- Michelle Botcoe Woods: Acknowledges the difficulty in documenting the reasoning for individual decisions and the variability in committee scoring. Speaker notes that the committee has received Audit Committee recommendations and is working to improve the equity and transparency of the community proposal process but admits that minutes may not capture the full depth of deliberation.
- Councilmember Johnson: Highlights the decline in funding for North End organizations and the absence of Ward-specific representation during project reviews, arguing that the current process fails to ensure equitable distribution of resources.
- CIB Representative: Confirms that the CIB committee meets monthly (next on November 10) and expresses openness to coordinating with the Council to present recommendations and answer questions.
Key Outcomes
- OFS Budget: The committee noted the 2026 proposed OFS budget of $5.1 million (a $34,000 general fund increase). Key changes include a reduction in the attrition budget and the reassignment of 1.5 FTEs to special funds. Speaker noted that two specific budget cuts (Accounting Clerk and Program Administrator) are intentional to meet reduction targets.
- CIB Funding: The committee confirmed that 2026 is the final year of a 5-year front-loaded bond cycle, resulting in a reduced CIB bond allocation of $3.9 million. Normal annual funding of ~$11 million is projected to resume in 2027.
- Reporting Recommendation: Council President and Councilmember Johnson recommended directly engaging with the CIB Committee Chair and members at the November 10th meeting to ensure transparency regarding project prioritization and scoring.
- Debt Presentation Rescheduled: The presentation on city debt, originally scheduled for the current meeting, was deferred to November 5th to allow for a full 30-minute presentation time.
- Follow-Up on Equity: Council President and Councilmember Johnson emphasized the need to address the documented decline in investment for the North End, citing Audit Committee data showing a 75% funding disparity compared to similar economic neighborhoods.
Meeting Transcript
Walking down the hall. Just myself. Yeah, it is. Oh, perfect, thank you. Hi. Calling the thank you, I'll just do this one more time. Calling the finance and budget committee of the St. Paul City Council to order. We have five present, two absent absences being uh councilmember Bowie and Councilmember Johnson. Um today we are having um two presentations packed in sort of one PowerPoint, but today we are reviewing everyone's favorite department, the Office of Financial Services and presenting from that department. We welcome our interim director of OFS, Laura Loxon to present the 2026 budget for OFS. So welcome to the chambers. This will be pretty dense, so we're gonna get rolling and uh we have 90 minutes. I kind of suspect we're gonna fill that time, so we'll kick it right off to you. Thank you so much for joining us today. Great, thank you for having me. I really appreciate it. Um for the record, my name is Laura Logson. I'm the interim director of the Office of Financial Services. Um really looking forward to sharing the great work that OFS does and talking about our 2026 budget proposal. Um after my presentation, Nishelle Botcoe Woods will come and present on the CIB budget, and then after Nichelle Neil Younghands will present about um city debt. So we do have a lot to get through. Um happy to answer any questions as they come up. So first, just for the agenda, um I'll be giving a summary of the 2026 budget for OFS, review some key highlights, um kind of budget recap from 2025. Um I'll get into details of the 2026 budget, our spending, FTEs, as well as some ARPA updates and updates about OFS revenues. So our high-level executive summary first. Um I want to start by saying what a privilege it is to work with the very dedicated, highly skilled and inspiring team at the Office of Financial Services. Um department is responsible for the daily functioning of the city, um, all of the money, cash that moves in and out of the city and all of our programs, the accounting for every transaction, planning, spending, um, adhering to budgets, um, investments, debt management, major um capital projects, real estate projects, and our fleet and vehicle maintenance. We have a really diverse set of work and our grants team, which I'll be talking about more. Um, so we're responsible for just really a high level of work at the city and making sure that the city can function and our work is really foundational. So I'm just super grateful to work with this team. Um, in addition to that, our 2026 goals and priorities are really focused on prioritizing our staff, staff development, succession planning, and meeting our hiring goals. Um, we're constantly thinking about and implementing ways to innovate and increase our efficiency. Um, some kind of key projects that we've been working on and we're gonna keep working on are um advancing and finalizing a citywide finance manual, continuing the timeliness that we've gained in our annual financial reporting, um, advancing our electronic payment projects and creating more efficiency there, and just ongoing process and policy documentation. Um we're also really engaged with um supporting long-term planning by departments related to grant funded initiatives and um in the coming year a shift to priority-based budgeting. Um, and then just at a high level, some key changes from 2025 in our general fund, our general fund allocation is increasing slightly by about 34,000. Um, there are several kind of reductions and shifts and increases that total that 34,000. So I will get into those details further down. So to recap our 2025 um budget, and it's been a really big year for OFS. Um, in 2025, we shifted um a high-level accountant position from special funds into the general fund. Um, and that um person supports citywide grants, so that's been super important, and that's been fully staffed all year. Um, there was a similar shift from on the Office of Financial Empowerment Team from a grant from a grant funded position, and the grant was ending into the city general fund, and that's been staffed all year as well. Um also this year, $90,000 was added for events and um events and festivals grant program, bringing that total budget to 155,000. Um, and that remains unspent for the year. In 2025, OFS's attrition budget was increased by 96,000, bringing our total attrition budget to a little over 300,000. And one thing to note here so while OFS has over 90 FTEs, only 30 of our FTEs are funded in the general fund. So to meet an attrition budget of 300,000, we would have to hold about you know three FTEs open per year, which means our attrition rate would be at 10% for those 30 FTEs. Kind of looking long term, that's not a super sustainable rate for OFS to keep you know three out of 30 positions open all year. So in the 2026 proposed budget, we've reduced our attrition budget. Also in 2025, there were investments related to climate initiatives.
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