St.

Paul City Council Finance and Budget Committee to Order.

Good morning, everyone.

We are have three presentations today.

I am open to the order.

We were gonna maybe do shortest.

Start with the shortest ones first.

Is that all right with you?

We'll have a 15-minute presentation for SBNN and then we'll go second.

Yeah.

So we're gonna change the order up just a little bit for order of operations, just for time meetings of staff.

Thank you again for your flexibility.

Um I would like to then welcome up who are our presenters.

We have for us PNN.

Oh, we've got Chase Maxwell, Bonnie Schumacher, the executive director from St.

Paul Neighborhood Network, and Chase Maxwell, Communications and Digital Media Manager from OTC.

Hello, welcome.

Thank you so much for being here.

So we're budgeting about 15 minutes.

We've got three presentations today, so if you can kind of keep it within that time, that would be wonderful.

And I will kick it off to you.

Thank you so much for being here.

Um great to be here.

Um Chair, Council members.

Uh Chase Maxwell Communications and Digital Media Manager in OTC.

Uh my team uh is the folks who are in the control room who actually do the broadcast of our telecast services.

Um I'm excited to be joined by Bonnie Schumacher, uh, the executive director of St.

Paul Neighborhood Network.

I'll just let you briefly introduce yourself.

Hi, as Chase said, my name is Bonnie Schumacher.

I'm the executive director at SPN, St.

Paul Neighborhood Network.

I've been with SPNN for um almost twenty three years.

Um the executive vector for the last year and a half, and um we're a community media center that um works within the city limits.

Great.

That's fun.

So uh today we'll just give you uh a broad understanding of what our telecast services.

Uh, what are the services that my team provides?

Uh we'll talk about the current telecast service model in the city.

Uh we'll talk about why uh we're entering into some important milestones in 2026 related to telecast services that we want to make sure the council is is fully aware of.

Um Bonnie will speak to some specific national trends impacting community media.

Um I'll talk briefly about meeting resident expectations for information, all the different ways that my team and folks throughout the city uh try to get information in front of residents in addition to what we do through telecast services.

Um and then we'll briefly talk about um some potential options uh that we're considering as we look at modernization of telecast services uh into 2026.

So first, uh, how does public access work?

Uh what are telecast services?

Uh throughout today's presentation, we'll use an acronym known as PEG.

PEG stands for Public Educational and Government Access.

This concept was really kind of inaugurated through the Cable Act in the 1980s.

Really, it's the way that through cable franchising, our franchising authorities provide resources to communities to allow them to do telecast broadcast of public meetings and providing information through cable to residents.

What you may not know is that as part of the telecast model and as part of our Comcast franchise agreement, we have a relationship with St.

Paul Neighborhood Network.

They are what's known as our designated entity in the franchise agreement, uh nonprofit to provide the public and educational access through the channels that they maintain that they broadcast on.

So think of SPIN as sort of the P and the E of PEG, and then my team in OTC is the G.

So with that, um I want to talk about the current telecast service model.

So first starting with the city charter.

So the city charter specifically requires that OTC ensures number one, the council meetings air live on our government access channel, uh, that meetings are replayed within two days on a council approved schedule, and that meetings are streamed live and remain available online afterwards on the city's website.

So digging into the model more specifically, what does OTC's video team do?

How do we support these meetings?

So my team directs and records approximately 200 meetings a year.

Uh that includes meetings of both the city council, our boards and commissions, and then also uh the Ramsey County Board of Commissioners as well through the joint City Council telecast service agreement.

What does that look like kind of operationally?

So uh my team members are in the control room, uh, they're running our live broadcasts, they're switching between our robotic cameras here in the room, um, they're managing audio levels to make sure that we can hear folks on the live stream.

Um, they're doing all the on screen graphics, the captions, um, the agenda items that appear during our broadcasts.

They're also ensuring that the cable and the streaming feeds don't fail, uh making sure that they're they're resilient and that we're addressing issues that emerge as fast as possible.

Uh, we're also ensuring and publishing the replay and on-demand video on our cable channel and on the web so that both the meetings that we record here and additional video information, information about the council and the administration are available on our channels as well.

Um, in terms of the team, it's a small but mighty team.

Um, so um, in addition to me as the manager, uh, we have one Josh Leader in who's our media services coordinator, he's our team lead for the video team.

Uh, we also then have three video production specialists who actually do the day-to-day um operations.

So I want to talk about why uh why we're here today uh is because we do have some major milestones ahead of us that I want to make sure the council is fully aware of.

So, first, um, and and we've started to have conversations with all the council members about the Comcast franchise renegotiations that are happening.

We're at the point where we're in the process of renegotiating that 10-year franchise agreement with Comcast.

In addition to that, we are uh at the end of a two-year telecast service agreement between the city and the county that governs how we do telecast services in this space.

And then, in addition to that, we have a naturally occurring vacancy on my team.

One of my team members who's been with the city for nearly 30 years is planning a retirement.

We're really excited for him and his next journey.

Um, and so there are just some things here that that we're preparing for as we're looking at the telecast service model.

And I think the most important thing is we want to ensure that we're protecting uh uninterrupted access to uh, of course, broadcast of our of our city and county meetings.

Um, and then there's some other opportunities here as well as we look at St.

Paul Neighborhood Network's role uh in the community media ecosystem within St.

Paul, and then also looking at how can we navigate this without additional burdens on the general fund for the city, um, and then also looking at how we can strategically look at that naturally occurring vacancy on my team.

So, with that, I'm gonna turn it to Bonnie to talk about some trends in community media.

And really quickly, um, we've got a quick question from the council president.

Yeah.

Uh thanks, Chair.

Mr.

Maxwell, thanks for that uh information.

So I understand that the franchise fees don't cover salaries or operations.

So that's covered by the general fund, they cover physical infrastructure, capital, the technology, that kind of thing.

Do they fully cover those costs?

Uh in terms of the infrastructure costs for the cable to broadcast activities.

Yeah.

Uh, in terms of uh the costs, so there are some technology subscriptions with Branicus, so some of our technology tools that actually the technology that allows us to broadcast.

So to that question, it's it's a mix of funding sources, and we have some additional information on that at the end of today's presentation.

Thank you.

Yep.

Thank you all for allowing me for just a few minutes just to talk a little bit about the trends of community media across the nation.

And as everyone does, as you know, most people are not uh subscribing to uh cable anymore.

So as less and less people subscribe to cable, less funds come in to the government or in through the PEG fee or the franchise fee.

And just to clarify, like there's a franchise fee that's five percent that actually does come to the city of St.

Paul's general fund, I think.

It is not part of the, and then the Peg fee is what is um put aside for equipment and capital money, and that's a portion of that is what comes to St.

Paul neighborhood network to SPNN for us to be able to use for our operations.

Um as less and less people subscribe to cable, the amount of money that comes in from those fees continues to decline.

Um, for example, at SPN, we've seen a 40% decline in the last five years of our income.

So around $300,000 is what we're bringing in less than we did just four years ago.

And so, but that is a nationwide um uh uh process that's happening all across.

And so organizations like ours are doing their best to be able to try to diversify our funding, um, charging for um services.

We have low membership rates, but our goal and our mission is to actually be able to continue to make sure that we're providing services to anybody in the city of St.

Paul who wants to come in, learn media, and be able to use that to then share back.

As we all know, the more folks who are sharing their content, sharing their stories, the more robust and equitable uh community we actually have.

And so um part of what we do, um just gonna talk a little bit about what SPNN is.

So we've been around for over 40 years.

Um we operate the four channels in St.

Paul.

So we have the public, which are two channels, channel 14 and 15, we have channel 19, which is everything that SPNN produces itself, and then we have 16, which we share with the St.

Paul School District, and so we do school board meetings, um, honors concerts, things like that, things that are important to the school system.

Um so we have someone who operates who's a master control operator who makes sure that those things are being shared with the community, that audio and video sounds good.

We have a production team, um, it's two folks who do a lot of work.

So we've done a lot of the mayoral forums, we do candidate um debates, we host events, we work a lot with nonprofits to be able to record the events.

We just did a thing with um uh Ramsey County on uh on a in-house training that they were working on.

Um so we do a really host of different kinds of productions with our production team, and then we have our education team as well, which is the people who actually have classes in the evenings for folks to come in and learn.

We run our documentary series, so we have four of those programs.

We have after-school programs for youth that we have people come in, we do tours like this morning.

Actually, we have about 20 students coming in from Johnson High School who are gonna get exposure to our space and system, so they'll do a little bit of video, a little bit of photography, a little bit of audio.

Um, and it's a way to really build expose young people to learning how media might be able to impact their lives and how they can use media to uh change the narrative and tell the stories.

Um as we continue to see these declining um revenues, we have increased looking for outside funding, grant opportunities, earned income.

So we do start charging for some of the services that we offer.

Um so for example, now when we partner with the St.

Paul um League of Women Voters, we do charge for some of those services at least to help try to recoup some of our costs.

Um but our production team is very um knowledgeable and has a good understanding of how to work in a lot of different environments, and we've partnered with um Oak D on some of the other um projects that they've been working on as well.

So oh, and we do an AmeriCorps program as well, so which we have um 20 individuals serving in different nonprofits teaching digital literacy skills, which I also think is a really important piece that we should be thinking about as we move forward is that whole digital literacy piece.

Thanks a lot.

Great.

So I know we're running out of time, so I'm just gonna go uh directly to the proposals that that's okay for the council.

Um so you know, as we look at those milestones that are coming up that are converging for 2026, we wanted to be very intentional about looking at um different ways that we could approach telecast services and think about modernization here.

So we looked at status quo.

Um we uh we really do enjoy um doing this work, and uh the team does continue to have the capability to do this work.

Uh we also looked at option two, which I'm calling the community partnership model.

So St.

Paul Neighborhood Network is our community media partner, um, counterpart to OTC.

Um, they have the capability uh to do this type of broadcast work.

Um so looking at this specific proposal, and I'll get into it in a little bit more detail when we look at a potential accountability model for option two.

Um, this would look like OTC continuing to be accountable, uh providing oversight for broadcast and telecast services with St.

Paul Neighborhood Network staff supporting OTC by running the meetings in uh the control room.

Um I think what's important about this proposal is we are trying to keep a general fund neutral.

So when we look at um, and we've been working closely with OFS on this to make sure that we're we're thinking creatively about how we can make this work.

Um, and so we'll we'll get into some potential numbers, sort of a before and an after picture as we look at at that option.

And then finally, we did look at option three, which would be vendor managed services.

So Granicus, uh, which is our technology partner for broadcast, uh, does have some services that are more full service, fully managed, meaning the Granicus would would run the cameras in here, uh would operate with a continued oversight from OTC, but Granicus technicians would be doing that.

Of course, uh we think number one, this would be a higher cost than the other models, um and also doesn't align with city values in the sense that we would be you know, more money would be leaving the St.

Paul community, and uh we don't feel that that's aligned with our values.

So, as we look at the community partnership model, um, so uh in terms of responsible, um, SAPOL Neighborhood Network staff would operate our live meeting coverage and would ensure that those meetings are just as they currently are, no interruption to service, that those are posted when they need to be, that we have our meetings go live, um that they're replayed on our cable channel, um, and that folks can access that online.

Um, OTC, so my team specifically in partnership with Josh, who's our our team lead, would oversee uh sample neighborhood network staff to make sure that they are maintaining the same quality and uninterrupted services that uh the council and Ramsey County currently do depend on.

Um, of course, we want to make sure that all of our elected officials and policymakers are fully uh supportive and and aware of these different options.

And then, of course, we'll also need to uh inform uh residents, media, and city staff is needed.

Um so you can see some additional information here around the managed service option in terms of what the scope of services would look like with St.

Paul Neighborhood Network.

We have done some estimations here based on just historical trends and data about the number of meetings that my team covers across both the county and the city and uh making sure that we're we're addressing that in the actual contract scope.

So just very briefly, we'll we can get into the numbers here.

So there are four buckets here to be aware of uh operations, streaming and public access tools, that's technology, capital and chambers infrastructure, and then our peg allocations.

So currently, um OTC through our general fund in terms of the capacity and the staffing on our OTC video team provides the overall operations day to day of our broadcast services.

Um we put the specific account units there if if you're interested in digging into those numbers.

Uh for streaming and public access tools.

So, as I mentioned to the council president, um, through our Central Technology Services Fund, this is how we actually fund our Granicus tools that allow us to actually broadcast in terms of the technology platforms to the public.

Capital Chambers, so as part of our telecast service agreement with Ramsey County, uh both the county and the city every year contribute funds to a shared council chambers technology fund.

That fund is intended for capital replacement, um, for replacing equipment in this space in the control room, making sure that our equipment remains modern and uh up to up to par with current trends in media.

And then finally, the PEG allocation.

So both the city and St.

Paul Neighborhood Network take a portion of the PEG fee.

Our team takes a smaller portion of that.

I'm currently about 185,000 a year.

And as Bonnie shared, that is restricted to capital.

So we can only use that primarily on equipment.

Um so you'll see that as we look at the future state, um, moving to sort of option two that I laid out with St.

Paul Neighborhood Network, uh, the community partnership model, um, you can see here that um essentially we are uh doing some reallocations specifically with the capital uh capital chambers infrastructure fund.

Um so uh essentially taking more of our peg allocation and transferring that to the council chambers uh fund to make sure that we continue to invest in that fund at the same level that we currently are, and then reallocating uh essentially both Ramsey County and the city's contributions to that fund to support the contract with St.

Paul Neighborhood Network.

So what you're seeing here is uh what we'd like to call a general fund neutral proposal.

Um we're not doing any additional expenditures through the general fund.

Um we are just reallocating um specifically those capital dollars to make sure that we can continue to contribute to make sure that that council chambers fund um is robust and capable of uh supporting our roadmap of enhancements.

Uh we work closely with Jay Wilms on on that roadmap um to make sure that that he's aware and that he can make the council members aware of uh some planned upgrades and enhancements that we have to make sure that this room can continue to do broadcast in the way that uh that we all expect and that our residents also expect.

Um so with that I will pause for any questions.

Um, and I know that we're uh a little over time, so I apologize on that.

Council President.

Thanks, Chair.

So it sounds like looking kind of at the next steps roadmap slide.

This isn't really a question to the council.

This is a direction that you're planning to go.

We we would like to go in this direction.

Um I would say that Bonnie and I have really um become closer partners and collaborators.

Uh we we both realize the the trends that are impacting community media, and in that spirit of collaboration and ultimately wanting to serve our residents and get them the information that they need in the way that they they want to receive it.

Uh, we feel like this uh proposal um is sort of a win-win-win for the city for sample neighborhood network and our residents.

And and no problem with that, I just wanted to make sure I was I was understanding what was being asked of us or not.

I guess I'm just curious two questions.

Would would SPNN staff be on site during our council and other meetings then to be okay?

Because we sometimes have those moments of uh voice activated projector, etc.

That we would just want to make sure.

Okay, yep.

Um and secondly, how would this affect or would it affect is this just broadcast?

Would OTC's number of hours that they contribute to that they that contribute that they a lot to the council still be accessible to us for other things and absolutely and that's what we're really excited about is this would allow us to do more of that strategic communications work that we love to do, partnering with you on video storytelling, uh, website content strategy, social media strategy.

And so, yes, this would give my team more capacity to support council with those efforts.

Thank you.

Yep.

Yeah, Cherrier.

Thank you, uh Chair.

Well, I just want to say thank you for your presentation.

All of the information is very straightforward, and I do appreciate you laying out here.

Are the different options that we do have that way we know what's outside of the preferred preferred option?

And I just wanted to um weigh in by sharing that I do a support option too.

Okay.

Thank you.

Wonderful.

Seeing no other questions, thank you so much for your time today.

Thank you so much.

Thank you.

We're gonna hard pivot.

We're hard pivoting to debt.

Um sometimes there's no good transition, so you just announce you're taking a hard pivot.

Um we would love to welcome our debt manager Neil Youngins.

Should I worry about getting correct?

Um and this, as you remember, was sort of the third and final presentation from OFS, and we just really wanted to give debt sort of the proper amount of time.

Um, and so thank you all to my colleagues for that flexibility, and thank you to Neil for the flexibility.

Um, and we are very excited to hear your presentation day.

Um, you've got, I think we're budgeting about 30 minutes for you, so we'll see how far we get because we have Hero directly afterwards.

So thank you so much for being here and your flexibility.

Take it away.

Uh well, good morning, uh chair and council members.

Um my name is Neil Younghans.

I'm the debt and investment manager in the Office of Financial Services, and uh I am gonna kind of complete the rest of our OFS presentation.

Um so, of course, I'm gonna be covering the debt uh our debt presentation.

So I'll be going over our debt outstanding, um, how we're planning for longer term debt uh obligations so through our debt model, um, any upcoming sales we might have this year or next year, and then some potential refundings, which I can explain more as we get there.

Um so if we're bonding in debt, when we're when we're thinking about uh city bonds, we're thinking it's um these are really IOUs is uh maybe the uh best way to think of them.

Um so the city uh agrees to repay the principal and the which is the original amount borrowed along with interest to investors over time.

Umibonds are issued by states, cities, counties, and other governmental entities.

Um these municipal bonds kind of come in two different flavors.

So we have general obligation bonds and notes, um, and when you hear general obligation, um we're thinking that these are repaid by the property tax debt levy, and that goes to uh support our uh CIB, St.

Paul Streets and Millen Overlay programs.

Um on the other side we have revenue bonds and notes.

So these are supported by revenues uh depending on the uh the credit and source.

So we have sales tax, so our sales tax bonds are supported by our half cent sales tax.

Uh parking bonds, those are supported by uh parking revenues.

Uh similarly, sewer, water, and recycling and solid waste funds, those are all uh supported and repaid by their utility funds.

So in total, uh as of last August, our outstanding debt portfolio uh for our journal obligation bonds was uh a little over 250.4 million dollars, or a little under 250.4 million dollars.

Um and traditionally we are right in this range, about 250 million dollars.

And then on the other side of that, we have our revenue bonds.

So this is closer to 380.7 million dollars.

And um traditionally we look at uh the city usually has like a portfolio of about 250 million general obligation bonds outstanding and then 250 million in revenue bonds outstanding, but the water revenue bonds have been increasing uh in the last couple of years due to that Lake McCarran's water treatment plant project.

Um so we've issued quite a bit of debt for that project as well as the lead service line replacement program.

So that's kind of pushing up that revenues side of um our total outstanding debt.

And so this only incorporates principal outstanding, so none, this doesn't look at interest.

This is just uh debt that we're principal that we need to repay.

And I'm happy to answer any questions unless you want to wait till the end.

I'm sure my face looks like a question reservation.

That's why.

Um president agree with that one.

Thanks, Chair.

This is always dicey.

No one is at all foggy this morning.

Um I am wondering, I'm trying, I don't think I see it on future slides.

Is the 631 million where percentage-wise in terms of overall city capacity?

What percent is that, and what is best practice in terms of percent of debt to overall general fund or budget in general?

Um I don't think we've refreshed some of our uh I guess metrics for like recently.

Um so I can't tell you off the top of my head uh where we're at for our total debt outstanding and where we are for our target, our internal targets for the city.

Um I will say that the city of St.

Paul for our triple A rated credit has uh more debt outstanding than I think our median peers, but I'm happy to supply any of that information, I guess like after the presentation.

That would be great.

Okay, now I'm gonna uh move into our debt model.

So um it looks a little daunting, uh, but the city uh projects out our debt obligations for 15 years in um kind of a complicated uh spreadsheet.

Um but this is just a five-year look at our uh debt obligations plus any future issues that we're planning to uh bring on to be repaid from our debt service fund.

So you can see in 2026 we have 34 or 35.4 million dollars in existing debt service, and that that starts to um uh roll off by 2030.

Um but of course, every year we're bonding for these same annual programs, and so we're gonna be increasing uh the uh the future debt service unplanned issue.

And so you can see in total that we have 38.2 million dollars in 2026, and that uh pushes up into uh 40, a little over 40 million dollars by 2030, and some of this is due to um interest rate assumptions in our modeling.

Um and then on the financing side of things, uh we take uh several different uh revenue sources to pay for our debt obligations.

Um so I'll go through our other revenue sources first.

So we have transfers, there's some transfers that we have from uh enterprise funds, we use special assessments to pay down some of our debt.

Um we have interest earnings that we also use.

Um we I believe there's eight or nine different revenue sources that we use to get to this 13.5 million dollars.

Um but over time that number uh we are becoming less dependent on some of our transfers and other revenue sources.

So you'll see that that property tax line, which starts to kind of take over a larger share of the revenue sources, starts to um increase over time.

Um so to ensure that the debt service fund is uh balanced over the long term, we are recommending a one and a half million dollar increase of the property tax uh debt levy.

Um so on this slide you can see it maybe a little bit easier, but we have uh a $1.5 million uh uh increase in 2026, um, and that correlates to a total debt levy of 25.7 million dollars, and that uh to again to make sure that our debt service fund is balanced over the longer term, we need to continue to increase uh that amount by 1.5 million dollars.

Um eventually uh to roll off that we will uh come down to about a million dollar increase in 2032.

Um we by 2035 we would not need uh uh a debt service increase.

Question Thanks, Chair.

And that Mr.

Youngins is assuming we issue no more debt.

Yeah, this is based totally on our uh the annual programs that we are issuing for now.

So that's the $11 million in CIB.

Um that's the $12 or uh the $15.5, which includes the uh our regular street uh street reconstruction bonds plus our mill and overlay.

So that's just within our uh our current programming.

So this is just modeling out um adding those future bonding amounts and what we would need to do to uh continue to um keep the fund balance over the long term.

And what what is the regularity with which we actually add more bonds to that normal annual amount?

I mean, I know we've done sales tax bonds to get additional investments at a time when the financial outlook was good.

I'm just curious, is it is it typically the case that we're just doing those annual amounts or are we often doing additional?

Um we are typically, I mean, we're now doing kind of more of a cash flow basis for bonding, but it uh generally we're just doing the 11 million dollars for uh CIB.

Um, you know, I think there are years every once in a while that we have the opportunity to um bond additionally, but this doesn't assume any of those one-offs in the future.

But I think the last time we did any increase to CIB was uh I think we added streets in 2006.

Um, and I can go track down that information as well.

Hey, thank you, council everybody.

I um I appreciate this overview.

I guess for me, especially as a council member that's just reviewing just like how the city has just been really bonding and debting um our our services.

Um I would really um think it'll be beneficial to know when like the time frame of when, like, for example, like the revenue bonds for sewer, like when would that actually establish uh for water recycling, solid waste, and I think we'll just mention also two million overlay because I think it's you know it will be helpful, especially you know, maybe through the budget committee for next year to really just have a stronger analysis of how the purpose of these bonds and how the city actually utilizes our issues debt.

So as a as a follow-up, I just wanted to mention.

Um so to go over our what we've issued so far this year and get into what we're gonna issue kind of the latter half of this year or whatever is remaining of it, uh, and then for 2026.

Uh earlier this year we issued 17.6 million dollars for our geovarious purpose bonds.

Uh we also issued $35.5 million for street reconstruction bonds, which uh also included a refunding of a prior issue.

Um and then we also issued $10.5 million for our sewer revenue bonds.

Um we are in the process of closing on a $28 million note with the public facilities authority, which offers subsidized rates for uh municipalities.

Um and we actually just closed on our the $7.5 million for the lead service line uh treatment plant project.

Or sorry, lead service line replacement project.

Um and in 2026 uh we'll be issuing $10.7 million for our uh capital improvement bonds, uh $2 million for our capital notes, um, and I guess backing up for a second, that $10.7 million also includes some uh authorized but unissued bonds from the prior year.

Um we've been uh issuing bonds like kind of this rolling basis uh based on when departments are planning on spending them those dollars to make sure that um we're most efficiently using bonding.

So if a department, you know, they have the budget bonding authority uh in you know one year and they don't plan on spending it that year, we'll hold off and just issue it the next year.

So we're not paying interest on something that we that we're not planning on doing that year.

Um and then so we're also gonna be issuing $15.5 million for our uh shooter construction bonds, which includes some uh three and a half million dollars of mill and overlay.

Um and we will also are planning on doing seven million dollars for our sewer revenue bonds, and then we are finishing the water uh McCarrian's plant treatment plant project uh financing.

Um so this is the end of that you know quarter of a billion dollars in financing that we've done for the project.

So they have one last tranche of funding to do.

Um and then we're planning on doing seven and a half million dollars for the lead service line replacement project.

So um, and I think we I typically get a question similar to this, so I I figured we'd include it in here, but you know, what is the cost to increase CIB bonding by a million dollars?

So we looked at this in two ways.

Um uh what's a one million dollar one-time increase to CIB bonding versus you know what's a million dollars ongoing in the program.

So on the left you can see this is what it would uh what the debt levy increase would need to be for a one-time increase.

Uh so it's it would be 130,000 uh every year for 10 years, and then the 11th year it would roll off.

So, and then if we look over here to the right, we have what does a 1 million ongoing uh increase look like.

So you know, every gradation in the color here is layering on 130,000 on top because each year you're issuing 130 uh a million dollars, which in year one you're paying 130,000.

So by year 10, you're getting to 1.3 million dollars uh for a 1 million dollar increase in CIB bonding.

Okay, I'll keep going.

Um so kind of the last part of the presentation here is uh what is on our horizon right now.

Um so the Federal Reserve is starting to uh cut interest rates.

Um so that offers uh some opportunities for the city to save on interest cost.

Um so like refinancing a mortgage, uh, you know, we can we refund bonds when it's advantageous, so when we can uh save money on interest uh uh on interest.

So we'll refinance to lower the interest rate.

Um and then sometimes we'll do so to restructure debt or you know, removing some kind of onerous uh restrictions that we've had to enter in uh and pass.

Uh so some of them have reserve requirements or covenants that say are kind of prescriptive, so we'll um try to uh by refunding we can get out of some of those.

Um so for an example, if we're looking at a 250,000 home uh with a 30-year term uh at a 7% interest rate, you know, refinancing by hundred pay 100 basis points lower, uh that could be you know $60,000 in interest cost over the life.

So there's some um large savings that we could realize by uh refinancing some of our old debt.

And uh this chart here is just a uh get at um and it's even out of date now, but uh the interest rate environment, the Federal Reserve says sets the uh uh Fed's uh excuse me, Fed funds target rate range, um, and they are starting to cut uh cut rates.

So as of I think October 28th or 29th, they even cut rates even lower.

Um so I think we're at the 3.75% range right now.

So and projected to keep coming down over the next year or two.

So what does this really mean for the city of St.

Paul?

It's just an opportunity for us to refinance and save on interest costs in the near future.

Um this chart here is what we look at when we're uh looking at pricing across the entire market for municipal municipal bonds.

So this is called the municipal market data curve.

Um it basically just shows you uh you know, for uh a municipality issuing debt at a 10-year term versus a 30-year term, what's the interest cost or the interest rate uh for each of those?

So you can see as we're uh on this chart for like September 2025 that rates are starting to come down.

So that's good news for the city because we'll find some ways to save interest costs.

I have a quick question.

Are there any um like so you were talking about sort of restructuring and refinancing to kind of get out of onerous terms and onerous sort of structures of a loan?

Um recognizing that we kind of took on a lot for the McCarran's, but also the lead water service replacement type better way of saying that, but the lead pipe replacement.

Um did we take on that debt, and then would they be eligible for potential refinancing?

Like is there sort of a bulk or percentage of our portfolio right now that we're sort of protecting out, looking at the rates going down saying there's a really big opportunity, and if so, do you have a sense of like what fra what percentage of our portfolio could be considered for refinancing?

Wouldn't they be eligible?

Yeah, so uh I guess to your first question on the uh PFA notes with uh St.

Paul Regional Water.

I don't believe those are available to be refunded, and those come at a much lower interest rate than what's currently in the market.

I think some of our even higher interest rates are probably lower than what we'd even get refinancing at the moment.

Um and even for some of those came with some reserve requirements that we know that we have uh agreed with PFA that we would no longer be into.

So we actually don't have to go through that process with Lake McCarran's as far as I am aware.

Um but I guess for our total portfolio, we we do go check out you know what is uh what is available for refunding.

Um I don't have like the actual percentage of uh of all our debt outstanding what's able to be refinanced, but as you can see, this list right here is all the debt that's uh available to be refinanced.

Um so I think it's I think we have uh 14 or 15 bond issues outstanding right now that are technically uh callable, aka we can uh we'd be able to um we have the legal option to refund them if we would like.

Um not all of these are in the money, so we uh we are trying to save interest costs.

So some of these aren't quite there to realize interest savings.

Um, but we're always have our eye out for you know, we're we're watching the market very closely.

Yeah, council present.

Thanks, Chair.

And and we've seen and uh just how successful your team is at doing that.

I know we've processed several of those refinancing um items on the council agenda.

So that's that's great to know, and it's good to see that the environment is becoming more favorable for that.

I'm curious when we do the refunding, any dollars that come back in as a result of that, or that we save over time in the debt fund.

Do those do those get put into the model, and does the model get updated in terms of how much we're bringing in from the property tax levy every year, just to just to make sure we're not we're not bringing in more than we need to.

I assume we're just updating the model.

Yeah, so I think for the savings for some of these bonds, I mean it's always good for us to do them.

I think over the long term it might have marginal impacts on the longer term debt model, but we are incorporating those as part of the debt model every time we refinance.

So you know, if we refinance, we're always looking to make sure, you know, is do we need this amount of property tax to keep supporting the fund?

So the model itself does fluctuate uh a little bit each year because there's a lot of assumptions in there, especially as you get over the you know, longer term of um the longer time horizon.

But yes, so we are incorporating that in our debt modeling.

Um, and so any savings I I guess goes to what our assumptions are for property tax in the future.

Thank you.

Uh and that is all I I just have a list of resources here if anyone's interested.

So we have uh GFOA's best practices, uh, the city has an investor relations site, we have a few uh policies as well.

Um, and I can stand for any additional questions you might have.

Great.

Yeah, thank you so much for the presentation.

I think my only additional thought is um very early on, maybe it was that org committee.

We had someone, oh I'm bad with names, but someone that was very nerdy in a good way and was talking about like best practices for financial policies, and we were sort of asking, like, you know, in terms of these sort of like general standards, where does the city sort of line up?

And overall it sounded really positive, but just one that I think we'd always be interested in sort of revisiting to like assist um and also um find areas of opportunity.

Um yeah, to just continue to better understand our debt practices and policies, um, but also make sure that we're being fiscally responsible.

So thank you so much.

This was um honestly very um digestible given the time of day and in general for a debt presentation.

So I just always appreciate it.

I think um one of our former colleagues said just like talk to us like we're six sometimes because sometimes it's like reiterating something in common language for everyone to understand is always a benefit.

So I'm just very appreciative of like, I'm sure my face looked like a question mark, but I promise I was listening.

And so thank you so much for the time and for your flexibility for the presentation.

Thank you.

That's at 1040.

All right, moving right along.

We have we have um we have our deputy directors of our hero department.

We have we are welcoming Beth Commerce and Andrea Ledger to the chambers for one of our last department presentations, if I'm not mistaken.

Our last or one of the last.

The last one.

Are we last we were?

Saving the best for last, everyone's favorite department.

I'm glad you said it because I was going to say it otherwise.

Talk about it when someone else says it.

What a day to be.

I may or may not have been saying that to every department.

Um, so we're at 1045, so we're right on time.

Um, you know, the practice run really smoothly.

So um yeah, feel free to take it away.

Welcome to Chambers.

Sounds good.

Thank you so much, uh, madam chair.

And uh nice to be with all of you this morning.

You can see here some of our fabulous staff who were doing summer outreach uh this past summer, and you'll hear more from Beth about all the progress we've made on the outreach front over the past several years.

Oh, thank you.

Um the agenda, which is the agenda that you provided in advance.

So um just to start our executive summary, we went through a strategic planning process of four or five years ago, um, and at that point determined our mission statement, which is at the top.

Um, but we have particularly each year, Beth and I have worked with staff to establish goals for the department for the year across our various uh divisions and initiatives.

And so just to lift up what those have been for 2025.

Number one is advancing equity and contracting.

Some of you know already the um efforts by the federal administration and some court challenges that are happening right now related to equity and contracting, disadvantaged business enterprises that work.

So we have worked really hard to build up the CERT program over the past several years.

That's our certification program for small businesses in the metro area and really build our contracting programs around CERT so that we are well positioned in the future to make sure that we are creating opportunities for small businesses and for local businesses.

Yeah.

We're gonna toggle back and forth uh on this one slide, so bear with us.

Um I want to talk about our goal to strengthen and expand the human rights and labor standards work.

Um we have definitely streamlined investigations.

We're moving to uh what we refer to as a PDSA predetermination settlement agreement, any chance we get to speed up that process.

Um we are uh really working hard with public interest terms because public interest terms and settlements, though that's what really drives systemic change when we can get to policy corrections and training.

Um we are expanding our education and our outreach to uh with businesses and with employers and employees.

We do a lot of training, um, and we also have worked really hard to develop materials in many different languages and to uh build relationships um with external stakeholders and keep showing up.

So yeah.

A really key metric that Beth and I have been focused on over the past several years has been employee retention, and you'll see a slide that demonstrates kind of where we were and where we've come.

Um we've done that really deliberately deliberately for improving our onboarding process, creating mentorship opportunities, and also creating a pipeline for staff to feel like they have a way to work their way up.

So we've taken chances on more entry-level uh positions on people who may not um come in with all the skills we would necessarily want, but training them and giving them the opportunity then to apply for higher level positions.

So we're really proud of the work that we have done.

Um, particularly we've um, I think at one point we were majority women of color in our office, which was really exciting, and we've been looking for pathways as well for um manager positions for uh those staff who have worked their way up.

Um since Andrea and I have uh been at the helm, we've been really focused on sustaining fiscal stewardship and operational excellence.

Um we have not overspent, uh we have not had many requests.

Um we've really been working hard to do the best we can and to to really maximize what we can do with our staff.

Um we've cross-trained uh employees so they can uh reach into each other's jobs and support each other better.

Um Andrea's team is using AI to a limited extent.

Don't get nervous, anybody.

Uh they're being very smart about it and um measured.

Um we continue to deliver strong services to businesses and residents.

So do you want to wrap up?

Okay.

Uh I'm gonna go back to my notes so I I hit them all.

Um and I'm so sorry to uh briefly interrupt, we've got a question from Councilman.

Thank you, Ms.

President.

Um, thank you so much.

Um I know just getting started here, um, and I know there's gonna be more slides to come, but just in terms of the 2025 goals, when um you mentioned advancing equity through contracting, like how are you measuring that?

Um, like how is that how do we know that we're actually advancing um equity in the contracting?

And I just asked that just because particularly, you know, when I have conversations um in my ward, um, there's a lot of diverse and a lot of um um um businesses of color, particularly that have shared you know it's been very very hard to successfully contract with the city, um, and there's tons of disparity reports out there in terms of like where the city you know has its challenges and where the opportunities lie.

So I'm just kind of concerned uh not concerned, I guess curious, I should say, curious, particularly around like what are those like KPIs, what are those benchmarks?

How do we know that we're actually leading into that direction?

Chair Kim and Councilmember Bowie.

I'm happy to skip ahead to those slides if you'd like to see them now, or um we do have some slides to illustrate that later.

Yeah, let's just well, I guess if you could just highlight that when we get there, absolutely we'll do.

Thank you.

I really think you're gonna like all the data that Andrea has to show you.

So I think you're gonna be surprised.

It's actually something that we at the end was like, well, you bruised through, let's add some of your successes.

So great question.

Yeah, thank you.

Thank you.

Um just to close this uh this portion and go on to the next slide.

Um, we're not requesting additional revenue this cycle.

Um we want to emphasize that our department has met uh budget reduction targets by holding key positions vacant.

Um we have strategically reallocated work across um teams to maintain service levels.

We have leveraged technology and AI to improve efficiency.

Um continued investing in our staff.

We have a really high uh morale, and we it's our goal to ensure quality and service delivery, and these adaptations keep us focused on our mission to protect civil rights, support small and local businesses, and advance economic opportunity in St.

Paul.

I know it's boring when I read my notes, but I wanted to be sure to give you all of those specifically.

So just to reiterate um responsibilities and performance measurement.

I know reiterate I always take every opportunity to tell you what the department does.

I'll touch on it briefly.

Procurement, contract compliance, human rights, labor standards, communications, administration, and also we have the PCR and accessibility.

You can see we have some descriptions of how, like procurement, we could do competitive sourcing, contract negotiation, and purchasing compliance.

Um I'm not gonna go through all of them, but below you see some just some of the KPMs, KPIs that we track, whether it's uh cycle time and procurement or cases resolved and the outcome, the outcomes that we get and staff retention and promotion rates.

The next slide uh to recap the budget.

Um we had salary savings from not being 100% staffed in Hero.

Um we're we're we're never really uh 100% full.

Uh we get really close, and then um people go to different uh different places.

Um we have uh stayed within our budget in 2025.

I think just some things that I want to reiterate no new spending, no unplanned costs.

Um we've really been strategic.

We want to we've worked hard to maintain services.

We continue.

One thing to note is that we continue to monitor our federal partnerships with Howden EEOC, and I fully anticipate that we will not um be continuing with those contracts.

It's about the equivalent of one uh FTE.

Uh, there have been a lot of changes at the federal level, and every time we engage with them, there are new uh dynamics to consider, and I just uh suspect that those are not um contracts that we'll be able to or interested in maintaining going forward.

So going on to the next slide, you can see our retention rate in Hero.

Uh, we've worked really hard again to support the staff we have and to empower them in their roles.

We just want to touch real briefly on some investments in 2023, 24, and 25.

Um you can see that we were given the HR and LS manager in 2023.

We had a uh labor standards investigator three in 2023, our public information specialist.

You're gonna see some more data there in 2024, contract compliance specialist 2025, and then we've got the program uh supplier diversity program coordinator role, and that one remains unfilled.

Um we'll talk a little bit more later as to why.

Um, I do want to highlight some of the outcomes that we have gotten under human rights and labor standards.

You can see uh labor standards uh 2024 was pretty slow year.

We were training.

It sounds pretty astonishing, but we had four new staff that year, and um we really spent a lot of time training.

Um 2025, uh we are doing the work that you wanted us to do.

You can see that we uh have have doubled um the hours recovered, and I mean, we've really blown out the water the dollars recovered.

20 uh 23, 24, 25.

You can see on the human rights side of things.

Um, then every year we've been getting progressively uh better results in that space as well, and those are individual complaints that we've resolved.

So really proud of those outcomes.

Outreach and engagement.

Um, when I started in here, well, they did we had five events in the year, and that was it.

You can see uh where we were at last year.

Um we did 51 events as a team.

It's a lot to ask for our small team, um, but they they embrace the opportunity, and we really work hard to get out of City Hall and to communicate with the people we serve.

We also do a know your rights presentation so people understand exactly.

You know, there's a lot of misunderstanding about our department because it's human rights, but we are very technical department.

We enforce um and interpret ordinances.

So communications.

Wow.

Um, thank you.

I just can't say it enough.

Thank you so much for the investment of a public information specialist.

Um we had 15 staff members editing our website.

Okay, folks.

Let's just think about the patchwork quilt that happens with 15 different voices.

Now we have Mariela.

We have one person in that role.

She assigns work to the subject matter experts.

She takes it back, and it is a night and day difference.

You'll see that Hero's website, we've uh gone through the optimization early for all city departments, and it's been fantastic.

I just want to highlight the number of data requests that we've uh gotten have increased uh drastically.

Um we didn't have a dedicated staff member to do that.

Now we do in Mariela, um, our communications lead.

And then I also want you to take a look at how we've been really start or strategic and smart as a department in using all the tools that we have, whether it's social media, uh, email blasts, our website, outreach and engagement, tabling presentations, uh, or I'm sorry, uh, know your rights presentations.

Um, just take a look at the how we've uh changed with our emails.

Um, some of you who know me know that I send a lot of emails, so this is really exciting from my perspective.

Um, what we've done before, we also had a patchwork quilt with how we used our tools.

We would maybe use social media now and then, nothing was regularized.

We didn't regularize any of our um newsletters or anything, and now we do.

Uh so people, I think the the biggest takeaway is that the community knows they can expect us now, right?

Whether it's in our the tools we use to communicate or whether it's showing up or it's in our results.

I'm really proud to say that.

Can I ask a question?

Because I I just when we were going through this, I was like, you have to talk about these.

I just sort of wonder, and I'm curious about sort of the increase of sort of the um like the the sort of the number of cases and increase of um cases that we would take on.

Part of me wonders if, like one of the benefits in a good way of this outreach and engagement and visibility is then you know, I think it's one thing for folks to hear, oh, this law was passed, and it's another thing actually to come file a complaint.

And so what I am hoping to then see then in 25 and in 26 is that we see hopefully well, hopefully not because they're violations, but an increase of cases where people are asking the city for assistance um with their cases and to and to file to file cases.

So it's just I think to note to my colleagues um sometimes uh there isn't like um well, I don't want to say no good deep goes unpunished, but you know, recognizing that more folks are gonna be utilizing this service because we made it much more or this well, we're offering much more visible and tangible to everyday people and particularly the workers in our city.

Um that also will mean that there'll be larger caseloads and more time and quantity.

But I think even just adding the the one position to help kind of spread the word and the reach that you have has been really incredible.

And then hopefully, um, right, to some ways that means people are gonna be reaching out to the city with greater frequency and that we help them settle our cases.

But it's just to note that like there's a tail end of this conversation that we start thinking about staffing for this department for future years to just be better prepared to receive and help help our workers in the city.

Totally agree, Chair.

Um, and that's what I always tell them too.

Uh, if you if you show up, they will know about you, they will know the services you can provide.

I can tell you I have a statistic in my mind.

Um, the PCR coordinator is very dedicated to outreach and engagement.

Uh I believe uh not to give her words, but she looks at that as like half of her role, right?

Running the process and then doing outreach and engagement.

And with PCRC alone, we have seen a 65% increase in the number of cases that are filed with HERO, right?

Versus filed with the police department or not filed at all.

And um, I I tell the team again and again and again, even when they don't want to do engagement, and not not all of them do, right?

Um, but I tell them if you show up, the community it you will reinforce everything else that we're saying, and they uh unfortunately discrimination happens.

Each and every one of you up there knows that discrimination happens.

And um, when we show up, they know they can rely on us and it it will impact our cases.

Yes.

It already has.

We've got a question from Council President.

Thanks, Chair.

And director, I really want to appoint you for that engagement.

It's it's notable.

I've seen you, I've seen you out in the community, I've seen you at events.

Um, and just to see this data, I think that it really highlights the importance of having key performance indicators because we can literally see directly the results of our investment in that PIO in those labor standards investigators in the training.

Um, and it's you know, I think those of us who are really impatient to see results sometimes think about a year of training as but then when you see the next year and those numbers jump up, it really um speaks volumes about the work you've done.

So kudos to you and thank you for making it so visible in this um setting.

My question was about the engagement.

Um, to the chair's question about sort of we see more reporting, is that a good thing because people are reporting, or is it the bad thing because it means more violations are happening?

And we see the same thing with public safety data and crime data, right?

Is it more crime or reporting?

One of them is good, one of them's not.

I'm curious how much you are doing community engagement to the actual employers, um, those folks who might be on the violation side to just do the education and maybe try to prevent some of that.

Yeah.

One thing that I'm so proud to tell you is that we have uh representative from the St.

Paul Chamber on the LSAC again.

Um I just, yeah, it's it is so awesome from my perspective because we didn't for a long time.

And um, I was really intentional and and hope I can say that I remain really intentional about building those relationships.

I just had a call uh with John Privilich and Caleb on Monday about the administrative rules.

Um I uh we take every opportunity we can to educate businesses because you know most complaints on the labor standard side, not all, there's occasionally bad actors, we know that, but most complaints, it's an oversight, right?

And um, an employer didn't realize that the minimum wage changed.

And um we we don't uh have a heavy hammer.

We jump to PDSA, we jump to get it resolved and get the back wages uh paid.

Um if any business invites us, we will be there.

Um we we build training into every uh agreement as well, so we ensure that we train their staff and their employees.

Um we do have uh respondents, um, employers call us after the fact and ask us questions.

Um my team, I've said it so many times.

It is not our job to put business out of business.

It is our job to help businesses survive and thrive.

So yes.

And um, I keep nudging our friends at the chamber uh for an opportunity to address their membership.

So I'm really hoping that'll happen.

Now that I've said it on microphone too, I'm really hoping.

So there we go.

I agree with you.

Thank you.

Yeah, so thank you.

Um, okay.

Proposed changes.

Um we uh have five labor standards investigators.

It's my belief that we only need four given the workload at this point in time.

Um we have a strange uh point six uh role for the human rights um investigators, and we uh can get rid of that uh point one of the point six.

And then we are uh proposing to reallocate professional services.

So with that, I'm gonna let Andrea take the helm here.

Thank you so much.

Thank you.

So you can see our history of budget to actual.

You can see the variance decreasing over the past several years, and that's largely tracked to our retention rate because almost all of our expenses go to staff.

You will not see a large budget for us in the general professional services or supplies and materials um line items.

So that's what that variance is largely about, as Beth noted.

We're never gonna be overstaffed, we're never gonna hire too many staff, so we're always gonna run that variant so that if someone leaves the department for a better opportunity or different opportunity, that um, you know, it'll be open for a certain period of time.

Uh spending, and I this is just to reiterate what I just said, it's largely people-driven work, it's personnel.

We do, as Beth noted, kind of in our functions, it's all directly working with members of the Q community and with businesses primarily.

And so that's entirely um staff reliant.

I just wanted to lift up um one of the uh things about um being staff reliant in some of the ways that we've pivoted over the past several years.

You can see that in procurement, our number of contracts has gone up from about 850 to 1250.

So significant increase since 2021.

Our number of buyers has stayed the same.

It's hard to see what it is in this line chart.

I couldn't quite visualize it right, but we've had the same number of buyers since 2021, um, give or take a few as people have departed.

And so I just um lift this up to visualize how we've been able to do more work with the same amount of people through um additional training, um, through work on as that said, utilizing technology.

I shared this slide uh chair cam because the council president uh raised up several times over our work together in the last few years some concerns about our request for proposals, solicitation time for those of you who may not remember the request for proposals process and procurement is for professional services.

For those of you who may not remember the request for proposals process and procurement is for professional services.

So anytime you're contracting for a consultant, engineering services, architecture services, legal services that can go through the request for proposals process.

In 2023, the average time between the request for proposal being posted on our bid portal, St.

Paulbids.com, and the contract actually being executed was 136 days, and we've reduced that over the course of a year to 74 days.

So significant improvement.

Request for bids are our construction materials goods purchases.

We don't have as much flexibility there to reduce that cycle time because the bidding process is different.

We're taking low bid.

You can see the number of days was already low to start with.

We've got a quick question from sure.

Thank you.

I just and I appreciate you talking about this.

I know in the council meeting, definitely want to review this process, but I was curious around what was kind of the reasoning behind decreasing the amount of days at a request for proposal is actually unnoticed.

I'm just trying to understand.

Yeah, so the um thinking behind it is we want a shorter request for proposal process.

We want to move more quickly between when that solicitation is issued and when those services can actually start.

We had found that they were dragging along either in the evaluation process or in the contract negotiation process.

And so largely this reduction has happened through training.

Training of the procurement team on the request for proposal process, particularly as again, we had brought in more inexperienced procurement team members and then trained them up to take on more sophisticated roles in the department.

And also we have been extremely uh diligent about training of project managers in departments because it really is a partnership.

Um, as you and I have discussed, uh council member Bowie that like we are largely reliant on our departments, our project managers to do that evaluation process to do that contract negotiation.

In my last question, um, so for RFPs, is my understanding that that department can customize, they can say however long or short that window is.

So this average is not it's not a standard that it needs to be 136.

Correct.

That that can be customized or based off the design.

Correct.

Yeah.

Some RFPs are simple.

Um it might be, you know, we're looking for a very specific like financial consultant, maybe it's for bonding, and um, the Office of Financial Services needs a bond consultant, and it's pretty straightforward what they're looking for.

Um, some of them can be extremely complex, like these complex engineering uh contracts that the parks department signs, um, or we're looking at exploring something totally new, um, and we don't really know how long it will take to evaluate.

Um we are just trying to be more deliberate on our part to make sure that you, as departments or council members or whomever is looking for the service, understand what that process is, that we're doing checks along the way to make sure it's moving forward in a timely manner, and that you're getting the support that you need in order to get the service implemented by your timeline.

I have a very quick question.

So our RFPs and RFB seems like that's the only two solicitation types.

Um, do the city not do RFIs?

We do a request for information, though, is exactly what it sounds like.

It's just looking for information.

And so we sometimes do those when we're looking for more information about the marketplace.

Again, it may be a service we've never used before.

It may be where we have a contract that's reaching its five-year expiration, and we want to look out there and see what else might be available.

A lot of times I recommend them for like when we're looking at new software or technology to be able to do demos.

Um, they don't really have any parameters around them, and so it would be up to a department how complex they wanted to make those since they're purely for information gathering.

Um, we also use requests for qualifications in the engineering and architecture processes.

Um that's basically to take out the cost and base the selection totally on qualifications.

It's more limited.

We just don't do very many of them, and I'm not sure putting it up here would give you very good information given the limited data set.

Thank you.

Council Chair Kim and Councilmember Bowie, this slide illustrates some of the work we've done around inclusion.

So all of our inclusion programs in the city are built around CERT certification.

And we believe that the CERT certification is one that will withstand legal scrutiny moving into the future.

And we actually have more agencies that are very interested in the CERT program at this point, given the changing legal atmosphere, the changes from the federal administration.

So everything that we do is focused on those CERT businesses from our vendor outreach program, which is a subcontracting requirement, to our requirement that multiple uh quotes have to come from CERT vendors.

You can see we participated in the disparity study, the state-led disparity study over the past year, which uh the state convenes every five years approximately, and other local agencies are invited to join.

I was just really proud that 60% it reflected that 60% of our dollars went small businesses.

Uh we are amongst the top of the heap when it comes to small business contracting amongst those agencies.

So feel great about that number.

Um of the things that we've been doing over the past several years is to really strengthen CERT.

We were the lead agency administering CERT up until 2022, I think, but the program was growing to an extent that it made sense to go to a third party consultant.

I think I may have talked to some of you about that in the past, but we went with strong and starlight consulting, and they have just done a really excellent job uh administering that program.

They have uh basically when it comes to businesses who are applying to be certified, they have very quick turnaround times, they have standards for themselves where they're getting back to uh inquiries within 24 hours, they're certifying uh businesses more quickly.

We have a lot of faith in that um certification now because they've done audits to make sure that we have all the information we need to guarantee that they are in our geographic area and that their business size is correct.

And as we move into 2026, our plan is to strengthen that program even more by looking at uh that small business category and making sure we're also reaching our micro businesses, which we know are um more likely to be women owned, to be uh owned by people of color, owned by immigrants, and so thinking about what a tiering system might look like for um that certification process.

Um you can see too that we had a 28% inclusion rate uh in our subcontracting program, and then we also with the common cent projects that were initiated in 2024, we also incentivize St.

Paul businesses in the RFP process.

So we did there's a slide in the appendix that shows that it's not dramatic growth, but we did see growth in St.

Paul businesses.

So thank you, um, Consumer Vice President.

Uh, when you uh say that there's like uh a notice or engagement or exposure, can you speak to just like what I guess like because I know we talked about this before by law, um, you know, we could say we could put a RFP on the website and it's equal opportunity.

But is there any, I guess, responsibility or intentionality in terms of making sure we are delivering equitably on our goals and make sure that there is like intentional outreach and engagement for some of these RFPs.

Is that driven by that design, or is that something as a standard as the HERO department to uh uh you know make determinations on which RFP should get a little bit more like outreach and engagement, particularly with certain vendors.

We would work with the department and the project manager on that process.

I mean, generally, our goal is to make sure that our solicitations are advertised as widely as possible.

Um, we want these bids to be as competitive as possible.

I think one of the things that we can do in the future is being more intentional in our outreach to CERT businesses, just generally about how they can then do business with the city.

Um, and in fact, that's one of our um that's one of our projects for 2026 is we work with a uh organization called the Construction Partnering Program.

It's kind of a mentorship program between general contractors and emerging contractors, and being able to use that pro that program as well.

But we are largely reliant on departments and determining both what those RFP criteria are going to be, and we can certainly suggest language for you around equity, and then in terms of the promotion of those solicitations.

Thank you so much counsel I I cannot in this presentation without asking this question because it came up and it was a very fiery discussion at my budget meeting particularly around um what is the process for our contractors particularly um for example when um when residents are applying for rehab loans um they are told that they have to only um choose contractors within the pool um of vendors that the city has I'm just really curious I was looking around the website trying to see um if there you know uh what is the is it an open RFP process if someone is a in construction and they want to be a vendor um or be on that vendor list for St.

Paul to be able to you know provide rehabilitation to to residentials um uh what is that process I don't know if what the name of that program is um all I do know is that there are quite a few people in my in my ward who received um loans particularly for rehabilitation but uh there seems to be a disconnect between the uh them being able to select their own contractor even if they are licensed even if they are unionized um that they can only work with the existing vendors and um at our kind of remember and not to be long-winded but just to give you bring you up to speed you know when Terabird was a housing director um that was something that she had mentioned that was one of the goals of the of the of the administration to increase more um contractors on that vendors list so I don't know if that is something that's within your jurisdiction um but I imagine that you know the process for someone to be a vendor is goes through through your department.

So Chair Kim and Councilmember Bowie that's actually a PED driven process.

I would be happy to talk to them though and schedule follow-up with you on what that process looks like we do work with PED um but it but I know that and I know that list exists it is not a list that is managed by Hero though.

Typically when we talk about vendors we're talking about um uh vendors that we are paying to provide goods construction materials services for the city and so the situation you described is a little bit different with um regard to the loans process so I'm happy to happy to follow up with them and and get back to you.

Thank you our historical spending you can see it's um largely remains stable over the past five years we've already talked about that our FTE summary again largely has remained stable for all the reasons that we have talked about in terms of the um budgeted positions um you can see the 1.1 uh that will be a change in 2026 um moving forward that Beth referenced unfilled positions we do have a program coordinator for supplier diversity vacant um I am hopeful that once we get um beyond this hiring freeze that we'll be able to fill that position to do some of the work that I talked about related to beefing up our emerging small business program to help um make cert as effective as it can be and then to council member bowie's question to make sure that we are helping those cert certified firms engage with the city of St.

Paul contracting process um was very excited to bring on a compliance specialist this year to help with some of that work that's a lower level uh position and so now are ready to to have that coordinator in 2026 we have a buyer one that's been vacant these are all the next four you'll see are all um being held open um due to the hiring freeze um right now we are able to to get through without filling those positions right away no real changes Beth already referenced had an EEOC I believe we're the only department in the city that has fee for service arrangements with federal agencies so these are reimbursements for the cases that we refer or that they refer to us rather and so as as of yet due to the shutdown we have not engaged in any contract negotiations with them for 2026 but uh some of the things um that we anticipate they are going to ask us to um agree to are not things that uh we're gonna be able to per guidance I guess from the city attorney's office yeah if I could just add it had even let us know that they look at ordinances their words are that are substantially equivalent okay and we have more protections than they do and so in the last conversation in the last um discussion that I had with them they were saying that they're reexamining what that means and they're going to be taking a look at ordinances like ours that offer more and

Yeah, if I could just add it had even let us know that they look at ordinances, their words are that are substantially equivalent, okay?

And we have more protections than they do.

And so in the last conversation and the last um discussion that I had with them, they were saying that they're re-examining what that means, and they're going to be taking a look at ordinances like ours that offer more and deem them non-substantially equivalent going forward.

So as it stands, we have more federal protections.

That's like the most basic reason why I anticipate that they will um take a look at us as not being equal.

And if you ever want to make changes to the human rights ordinance and add more protections, then it's just gonna like blow that out of the water, right?

Because we're already not in there, this new administration substantially equivalent.

So just so you know, that's that's one of the most basic changes coming out of HUD.

So that's that's why I don't believe that we'll we'll be continuing with that.

So thank you.

No problem.

Yeah.

So that concludes our presentation.

Yeah, there's some questions.

We'll go council president and chair yang.

Thanks, Chair.

Thank you both again for the presentation and um really for the emphasis on the results, and I appreciate the shout out for having been frustrated with procurement.

Um, and grateful to see that those those numbers are coming down.

And my guess knowing you both would be that you're not satisfied with 74 days average either, that you're trying to drive that even further down all the time.

Um, but it's it's significant progress, so really great to see.

Um, I just wanted to ask, uh, given the results last night, um, administrative citations are a big part of the penalties for a lot of labor standards ordinances, and I know director, you've been doing some work on that before.

So I'm curious.

Um, obviously we'll have a lot more conversation about this, but just while we have you, yeah, what do you see as the immediate next steps there?

Um the immediate next steps for administrative citations are that you need to do the enabling language.

Um, Director We see uh and uh some of us have been working on a draft, and from my perspective, um I you know I certainly can't speak for the city attorney's office, nor would I, but um, we're ready to go.

We have been ready to go.

Um it was just put on hold because of the signature campaign.

Um once that enabling language is done, of course, you need to go ordinance by ordinance.

I'm hoping that you can um we already have uh you you very wisely as a counsel put the administrative citations in earnest and save time and minimum wage.

Um I would like to change them a little bit, so I'm hoping um, you know, because we've learned so much over investigations.

I just want to clarify a little bit more because they're kind of um there's a little ambiguity in there, and our ordinances are so specific that I think the administrative citation section should also be specific, right?

Um, like we literally tell you the name of the notice of investigation and how many days you get and what you should respond to.

Like it's pretty descriptive.

So um I'm really hoping that you'll address uh wage theft, earn sick and save time and minimum wage at the same time.

And we already have that language too.

So whenever you're ready, council.

I've been ready.

We've been ready.

Yeah, thank you.

I I just I can't say enough.

Thank you so much for your support on that.

You know, it's really been astonishing to me that um that St.

Paul's the only city in the state that didn't have that capacity, and we finally passed it at all the levels, and now we finally did it at the ballot.

So um there's no question going forward, uh, your leadership on that and the mayor's was correct.

Um, and I'm just so excited that we'll go there together.

So thank you.

Yes, let's do it.

Thank you.

Any oh, yeah.

Thanks, Chair Cam.

Well, first I want to say thank you both for your work in here.

All I truly commend the uh the work that you both and your small but mighty team does.

When I look at slide seven where it shows the 2023 to 25 investments, I am blown away by the outcomes there.

This is to me a prime example of an increase in skilled capacity, really translating to the type of impact that we want to make.

And so I I um again can't say enough like how incredible the work that you all are doing is.

I'm wondering, like just long term about um the labor standards and like the human rights component in our city here, like reporting and and the work, like the reviewing work being done by us.

Can you what I remember is that a lot of these cases are cases that that otherwise wouldn't get taken on by the state at all.

Um, and and so that's why it's basically coming to us and why we've also like made these investments into the hero department.

So if you can correct me, you know, correct me if I'm wrong on that.

But I'm wondering like, you know, in terms of what's happening at the state, are we inching any closer at all to them to them taking on these sort of cases?

And you know, I think that there's you know, there's definitely a lot of like budget implications in that.

And um, and I'm wondering, like, is the ideal goal really to to push for the state to be the ones handling these types of cases, and that it wouldn't be the city.

Yeah, thank you.

Um, Chair uh Councilman Bang.

I I hope not.

Um, I can just give you an example of the human rights investigators of the state, they average 70 cases each.

Um, my team uh averages 20.

Um, I think it's always great when the city can be um part of the in the enforcement solution, right?

Um we can uh well one, we have a higher minimum wage than than the state, and um I so we'll always be needed in that space.

Um I believe that we offer faster, more efficient, and more approachable service because the state is so big, right?

Um I always tell people you can call us, you can file online, you can walk in, you cannot do that with the State Department of Human Rights.

You can't walk in.

Um we will meet you in public.

We will do whatever it takes to connect with you.

And the state, you know, no shade on them, but it's so big.

You know, 300,000 versus uh nearly five million people, right?

Um they're never going to be able to be as nimble as we are.

So I hope you always leave us in the enforcement space simply because we can serve our residents and our employers faster.

Yeah, great.

Thank you.

I appreciate like basically the the big picture, you know, that we're all uh working towards and and you um sharing with us about that.

I'm really supportive of it.

Yeah, thank you.

Um wonderful.

Well, thank you so much for the presentation.

Say the best for last.

Um, my colleagues, that is our last department presentation.

We'll have a few other ones set up.

Um, but with no other business before us, the budget and finance committee of the council is adjourned.

Thank you.