WEBVTT

METADATA
Video-Count: 1
Video-1: youtube.com/watch?v=Y1qQTRAASmU

NOTE
MEETING SECTIONS:

Part 1 (Video ID: Y1qQTRAASmU):
- 00:00:04: Meeting Call to Order, Land Acknowledgement, Agenda Adoption
- 00:02:37: Public Comment Introduction - No Sign-Ups Today
- 00:03:24: Banking, Investments, and Debt Presentation Introduction
- 00:03:32: City Debt Overview: Credit Ratings, Balances, 2026 Bond Issue
- 00:14:46: Commissioner Questioning Begins on City Debt Presentation
- 00:15:00: Debt Limits Comparison; High Bond Proceeds Expected
- 00:17:19: Authorized Debt Carryover; Arbitrage; Revenue Bonds
- 00:21:37: Debt Utilization; Securing Ratings; Cash Vs Debt
- 00:27:19: City Controller's Q4 2025 Financial Report Introduction
- 00:27:44: Financial Overview: General Fund vs. Non-General Fund
- 00:30:09: Financial Highlights: Bond Rating, Self-Insurance, Grants
- 00:31:55: Revenues, Sales Tax, Department Overages and Settlement Costs
- 00:33:21: Clarification on Tort Settlements and 2026 Obligations
- 00:34:41: City Asset Decreases, Minimum Fund Balances, and Fund Status
- 00:36:31: General Fund Analysis: Cash Balance, Fund Balance, Revenues
- 00:39:52: Expense Budget, Department Overages, Settlement Agreements
- 00:43:47: Special Revenue, Internal Service and Enterprise Funds Analysis
- 00:47:21: 2026 General Fund Balance Forecast and Spending Analysis
- 00:54:26: Commissioner Questioning Begins on Financial Report
- 00:54:44: Tort Liability, Fund Balance Differences, Levy Collection Rate
- 00:57:10: 2026 Budget Variances; Fire Department Overtime Analysis
- 01:01:19: Fund Balance Below Target; Cuts and Sacrifices
- 01:04:51: General Fund Decline; Internal Service Funds Explanation
- 01:10:04: BET Work Planning Goals and Objectives Discussion
- 01:13:24: Explanation: What, Why, and How to Adopt Work Plan
- 01:18:27: Strategic Objectives: Public Participation, Communication
- 01:20:23: Strategic Objectives: Alternative Revenues, Charter Amendments
- 01:21:26: Commissioner Discussion on Work Plan Adoption Process
- 01:24:57: Motion to Defer Work Plan Discussion to June 24th
- 01:25:29: City Council Projects and Geo Bonds Receive And File
- 01:25:44: Meeting Adjournment Due to Loss of Quorum


Part: 1

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Good afternoon. Welcome to the regular meeting of the board of estimate and taxation for May 13, 2026. My name is Steve Brandt and I'm president to the board. Before we begin the be meeting, I would like the clerk to uh read the

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reminder concerning diction during the meeting. Before we begin the meeting, I want to offer a friendly reminder to all members, staff, and the public that these meetings are broadcast live to enable greater public participation. These broadcasts include realtime

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captioning as a further method to increase the accessibility of our proceedings to the community. Therefore, all speakers need to be mindful of the rate of their speech so that our captioners can fully capture and transcribe all comments for the broadcast. We ask all speakers to

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moderate the speed and clarity of their comments. >> At this time, I'll ask the clerk to call the role so we may verify the presence of a quorum. >> Commissioner Chugtai is absent. Fry is absent. Olsen

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>> here. Payne >> present. >> Vice President Bernstein >> present. >> President Brandt >> present. >> There are four members present. >> All right. Let the record show that we have a quorum present. Uh I will now offer an acknowledgement that we meet

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today on land that has been historically um owned and u managed by the Dakota and Anisha peoples and we acknowledge the historical trauma that has continues down through this day from their

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dispossession of that land. Uh we'll now proceed to our agenda, a copy of which was po posted for public access to the city's legislative information management system, which is available to the public at liminapolis.gov. Uh board members, the agenda for today's

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meeting is before us. May I have a motion to adopt the agenda, please? >> So moved. >> Right. Do we have a second? >> Second. >> All right. Uh with that, all those in favor say I. >> I. >> Oppos? Nay. All right. Uh we have uh the

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eyes have it and the agenda is adopted. Uh next is the acceptance of minutes from our April 22nd meeting. May I please have a motion to accept the minutes? >> So moved. >> Is there a second? >> Second. >> We have a proper motion before us. Is there any discussion? Seeing none, all

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those in favor say I. >> I. Those opposed? Nay. >> Eyes have it. Minutes are accepted as presented. Item four on our agenda is the acceptance of public comment. Uh do we have anyone signed up for public

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comment? Just as a reminder, it is board standard to receive comment on any of our agenda items that are on that day's agenda. And the clerk informs me that we have no one signed up to comment today.

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Um I'll ask the uh we move on then to item number five a discussion item which is a presentation from banking investments and debt and that presentation will be made by Mr. David Wheeler. Welcome.

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Good afternoon, President Brandt, Vice President Bernstein, and commissioners. I am Dave Wheeler, senior manager of banking, investments, and debt. Uh, today I have the annual presentation on city debt. I'll provide a brief overview of the city's credit ratings, debt

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balances, and key statistics. Uh, and then very briefly introduce the 2026 various purpose bond issue. Uh, however, I'll note I will be back probably in June with resolutions to authorize that sale. Uh and at that time we'll provide

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uh a lot more detail and analysis of the issuance. And one note I would like to make uh before we begin. I'm sure you're all aware but uh wanted to mention that director Alan Hoppy retired from the city effective May 1st. Um so I wanted

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to mention that uh to this body and uh um moving forward uh you'll be dealing with me. So uh I will start with our bond ratings. Um, just a reminder, the CID continues to hold AAA ratings from, uh,

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Moody's, S&P, and Fitch, uh, with stable outlooks from all three agencies. This is an incredibly rare distinction. Uh, puts us in company of only about 30 other issuers throughout the country. Um, these are the highest ratings available. It tells investors that Minneapolis is financially strong and

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well-managed. Practically speaking, it means we borrow at lower interest rates and save money on interest costs every time we issue bonds. Uh at year end, uh looking at our debt balances, the city had $851 million outstanding. Uh the majority of the city

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indebtedness falls into two categories. levy funded debt paid solely from advalorum property taxes and enterprise debt paid primarily from net revenues of the city utility systems. And one item to note, we did pay off uh the

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convention center debt on December 1, 2025. Uh that was a refinancing done in 2020 to restructure that debt at the beginning of the pandemic. There was a uh $26 million kind of balloon maturity that came due in December. Um but that has since been paid off. We just wanted

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to leave that zero balance in there to make note of that. Um, and here's a look at the historical trend of our year-end debt balances. Uh, broken down by GEO and non-Jeo debt. Uh, the non-Jeo debt in those blue boxes at the top you can see is a very small

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amount. We haven't issued any for quite a while. That balance is decreasing each year as as those maturities roll off our books. Uh the go debt makes up the vast majority of what we issue. Uh not in this graph, but about 20 years ago, the city's debt peaked at just over a

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billion dollars outstanding. Um and then we had a long period of decline. Uh you can see from the graph going back uh beginning about 2015 that year-over-year balance uh is increased incrementally. I will note though on a inflation

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adjusted basis that balance is actually declining. uh it's not reflected here but uh nominally increasing uh the increasing balance isn't unexpected. It reflects our planned capital spending and investment in infrastructure and capital improvements. Uh we will

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continue to see this balance grow year-over-year. Um probably about the same uh pace as it has been as we budget for and finance the capital spending needs of the city. At the end of 2025, Minneapolis had a

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legal debt limit of $2.4 billion. This is a statutoily defined debt limit of 3 and 23% of our taxable market value. Uh most cities in the state are 3%. Minneapolis is a city of the first class. So we have a 3 and 23% limit. Uh

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so we have currently about $340 million applicable to this debt limit. So we're using only about 14% of our allowable capacity. Um this percentage has grown incrementally over the past few years. And that's really a combination of both the the small growth in our debt balance

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and as well over the past couple years. Uh some slight declines in the taxable market value. Um taken together kind of increasing the percentage we utilize of our debt limit. But I do think an really interesting comparison shown here. Uh this is Minneapolis as well as the other large

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city issuers in Minnesota. Um this is the the debt utilization of each of those issuers. Um the total debt limit represented by their uh blue graph uh blue bar and then the percentage uh uh that they are utilizing in those green

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dots. Uh despite a vastly higher debt limit, we use about the average of all cities. So, we're at 14%. Uh, that orange hash line is the average of this population. Uh, just um just under 13%.

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So, we're slightly above that. Um, one thing I'll note over the past few years. So, I mentioned our debt utilization has kind of crept up by a percentage or two past few years. Uh, the average of all cities did this about the same. So, I presented last year it was just under

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12%. That average is now just under 13% uh for these issuers. So it's kind of a macro trend among these issuers that their utilization is increasing. Um and then this is a look at the city's debt compared to its tax capacity. Uh

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President Brent, I think this is a graph you initially had requested a few years ago. Um we kept it in. I think it's just an interesting data point to look at. Um we've updated it with the uh 2026 valuations and 2025 year end balances.

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So this is the debt that's applicable to our limit. Um notice increases in recent years. Uh these still align with the increase in capital investment um as well as kind of some of those declines in tax capacity mirroring the t taxable

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market value uh declines. Um, our current percentage is back on par where where it was in about 2020. Um, overall the city's debt burden remains manageable and on target with our capital budget. Uh, and then this is a summary table of

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the next few pages. This represents all the current bonding authorizations outstanding. Um these are currently approved bonding by council through the capital improvement process uh primarily approved at the end of every year with the budget uh grouped by the type of

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debt. So that is the kind of the revenue that pays the debt service uh enterprise bonds from net utility revenue levy funded debt and then assessments are paid uh by assessments against property. [snorts] Uh the city carried forward almost $150

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million in authorized bonding from prior years. In 2025, the council approved $210 million in bond financing as part of the 2026 capital program. I don't know for sure, but I I venture to guess these are probably record amounts or or very high

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amounts compared to past years. Um but I'll note that we don't issue all of the authorized debt in any given year for several reasons. Um, but this does kind of speak to the budgeted increase in our debt financing for the various infrastructure projects.

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The next few pages are just the records of these authorizations. Uh, this is a report that we maintain uh on the debt team, but we're happy to share it anytime you like. Uh, so I won't go into detail on any one project. There are any questions uh on anything in this

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authorizations report. happy to take any and and speak to what I can. U of course I I always like to say defer to a subject matter expert if I need to. But uh the next pages are uh the projects listed. So um I'll move

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on if there are no questions on that. And then finally, I just wanted to look ahead to the 2026 bond issue. Uh we're in the midst of preparing for the various purpose bonds. Uh we hope to meet with rating agencies in June. Uh depending on when we are able to get

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before the board and have the sale authorizations. Um if all goes to plan, we could look to sell bonds as early as July. In any case, we are still planning for a summer issuance July, August. Uh of course, we'll rely on our municipal adviser Ellers for any

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specific considerations of the sale and timing. Um, but I just wanted to make note our initial request for funding came back at approximately $244 million across uh the projects for total proceeds. Those are broken down uh by

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type below. And these allocation percentages are are very typical for the city go issues. We always see just over half uh half of the issue for levy funded projects, just under half for the enterprise projects and then a small portion related to assessment projects.

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>> [snorts] >> So, we'll continue to verify these amounts, finalize what we need. Um, but suffice to say, we're looking at a larger issue this year than we have had in most recent years. Um, as I mentioned at the beginning, I come back with some

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more detailed analysis and and, uh, specifics about the sale sometime in June. And then finally, uh, more for your reference than anything, but as we're looking to sell bonds, this is just a look at the AAA tax exempt muni rates

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uh, for Minnesota. Uh, for reference, these are the yield curves on each of our last sale dates going back to 2022. [snorts] Uh, the orange line represents market rates as of today. So about what the city would pay in interest rates um, on

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on that time horizon uh, if we sold today. Um, so this is kind of what the market is at. Um, you can see 2025 were the highest interest rates that we've issued at in quite a while. Um, and even 2026 today,

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rates are still elevated from kind of what were historical lows over the past few years. Um, but all that being said, we continue to receive very strong pricing because of our AAA credit. Our sales are competitive. we receive a lot

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of attention around them and bids on our bonds. Uh as a result, we continue to receive the lowest market rates available to us when we do go to sell. Uh so with that, I'll just close by saying uh the story is kind of the same as it has been for now uh the past few

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years. Uh the city's debt profile remains steady, consistent. Uh we have our top credit ratings uh very moderate debt levels uh with a substantial capacity to increase debt if needed. Our strong financial leadership uh often

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noted by the rating agencies and diverse resilient economy that works well in our favor along with its tax base. So uh with that I'm happy to stand for any questions you have on the presentation. Do >> my colleagues have any questions?

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Eric, Commissioner Bernstein, >> Mr. Reer, thank you so much for the presentation. It's incredible and your office obviously doing a lot of enormously important work. Um, I am curious um uh how um just a technical question um

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on your slide that shows the um debt limits compared to um some cities exceed their debt limit. I'm just curious what's going on there. >> Um, so they're not exceeding their dead limit. That's more a a factor of trying

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to jam in a few different Yep. two axes. So, two different information uh slides into one. So, um yeah, the percentage is actually that right axis. So, um yeah, it's the overall debt limit. I think comparison to the cities, you know, we have a massive debt limit um given our

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taxable market value. uh but then the actual uh utilization of that limit, you know, we're right in line with the average. Other cities are, you know, 30 40% of their limit. So, >> any additional questions for my colleagues or comments?

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>> Um I have one question and my apologies for not turning my phone off. Um the uh size of 244 million in anticipated bond proceeds does surprise me a little. I'm thinking

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that under um Mr. Hoppy's uh presentations and previous sales [snorts] over the last four or five years, it's been more on the order of maybe 150 million. Am I am I just

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thinking of the levy funded portion or is this up quite a bit? >> Uh, President Brent, uh, this is up quite a bit. Um, I I like I said, we will have a lot more analysis for you um, prior to the sale authorization, but yeah, it's a combination of kind of

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carryover a lot of authorizations that hadn't been issued in the past. Those projects are now ready to begin construction and funds are needed to pay those expenses as well as kind of some an increased uh debt authorization for the 2026 program. And a lot of those

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projects um are presumably and plan to be on schedule for construction this year or early in 2027. Is there any factor that you're encountering that accounts for the u

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carryover of um a greater amount of u debt that has been authorized but not issued? >> I don't know if there's one specific factor. Um I I would venture to guess that by and large just the projects

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hadn't been at a spot that they were ready to issue bonds for. We we typically won't issue bonds until construction is ready to go. Um we don't want to sit on those bond proceeds for arbitrage purposes. So uh I think some of these projects are now uh their

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construction schedule is is catching up here. And so where they hadn't issued in the past, they're they're ready to go now. >> Uh mentioning arbitrage, um I noticed in uh presentation that Mr. Harrove will be

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giving uh that the city received a I don't know if it was a million million and a half dollar arbitrage uh on its books uh which is something to the good for uh the city's balance but

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um I remember being told when we were considering um a different strategy for um bonding at the very start of when interest rates rose and I raised the possib ability of of maybe using some of our uh selling some of our bonds ahead

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of time and deferring the use of cash to avoid the interest rate increase that we had we [snorts] had to be very careful regarding arbitrage. I'm I'm assuming that we kept within the the IRS limits here, but um um is there a particular

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reason that we have that? Yes, President Brandt, I I believe you're probably referring very specifically to the convention center debt. Um, and that was a very unique case. Um, and kind of fortuitous circumstances for the city. Those bonds were issued as taxable bonds. So, the interest on them was

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taxable. The IRS uh doesn't care about arbitrage on taxable bonds because they're they're able to to uh tax the recipients on that income. Um the arbitrage uh really applies specifically to taxexempt bonds which is the majority

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of our issuance. Um in in that case uh pandemic interest rates were 0% uh and in fact we issued taxable bonds at less than a percent uh to the city. Um and I kind of what happened in in the

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interim is rates climbed very rapidly. Um, so we actually held on to uh the the debt service we had planned to pay uh invested in that and because that was taxable, we weren't subject to the rebate uh to the IRS. We were able to

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keep that. Um so uh they were the debt service funds that we invested um and and they weren't due until uh 2025. So what I mentioned that convention center debt uh maturing last year that was a balloon payment. So u we had taken the planned debt service

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payment each year uh invested in a treasury that was yielding three between 3 and 4% and we were able to keep that uh difference in in what we paid in interest and what we collected. >> Thank you for explaining the difference in standards between taxable and non-t

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taxable. I didn't realize that we're talking non-t taxable here. Um, I want to also just ask uh is any of the increase that we're seeing in uh proposed debt issuance happening on the revenue bonds or the I guess it's GEO

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but it's backed with revenue from utilities essentially. >> Uh, President Brandt the uh the authorizations are up um you know the the proportion of um requests are are about the same as normal. So the the

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authorized bonding for both utility uh projects and general infrastructure projects are are increased on on both sides. >> All right. Thank you. >> Uh Mr. Bern, Commissioner Bernstein. >> So bear bear with me here. I'm trying I'm

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So I'm looking at uh the history of outstanding debt uh from 2014 to 2025. And then I'm thinking about the comment you said about you know keep in mind that inflation is growing over this time. our uh what's the the basis of our

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debt limitation is is increasing right with that. Um but for the last several years our debt fairly flat so then you expect that our percentage of our you know of our utilization is declining with that but then we've also lost some

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market value. So can you just speak a little bit more to how that has changed over time? Those two factors kind of crossing one another. >> One being, you know, the increase in our capacity with our relatively slow debt growth as at least from what I

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understand. Uh and then also, you know, we've lost some value. So then that decreases our limitation, I I imagine. >> Um yeah, I guess the comment to um the the yeah, the the limitation is a calculation. Um and so that comes down a

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little bit as our um so I guess that comment was specific to the percentage of of our utilization that's increasing um because the kind of the dual factor of the valuations are coming down a little bit um the applicable debt is increasing year-over-year um higher

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percentage um and then the the outstanding um the comment on the outstanding debt was really yeah it's increasing nominally every year if you factor in inflation over that time that $851 million today um was a lot less in

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2015. So um >> so do you know how much >> we don't adjust? Um >> off the top of my head I I I did look it up and I can't remember off the top of my head. >> I'd be curious to see what the how the percentages change over time. I guess that's a quicker way. Yeah, I think the

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the um I can send you the the figures on these balances um and and what it would look like to to adjust for inflation, but I think the takeaway is uh cities doing a lot more with with less dollars um on an inflation basis. So, >> great. And then my last question is sort

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of a broad one, forgive me. Um, you know, you could make an argument looking at your chart on our limited limit uh limitation compared or sorry, utilization compared to other cities that, you know, we have room to invest more if there were uh investments that the city thought were important. Um, but

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obviously, as you've, you know, made clear, our uh our rating is extremely important and so like how would you assess that? um you know how secure our rating is. Obviously um our next presentation is going to talk about you

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know the stability of the general fund and things like that. So that's a huge factor. But I'm kind of curious your take on that like you know how secure is that rating? Um and you know looking at this from my perspective thinking well if there's important projects to take on

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perhaps we do have more room for that but is you know would you what would you caution? Uh yeah, Commissioner Bernstein. Um you know, I can't speak in any confidence on how secure a rating. I will say they tend to be very slow changing. Um the rating agencies do have

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a number of inputs that they factor in. There's a kind of a rating matrix, uh if you will, that they have a lot of economic data, population trends, um that all factors into it. It it's a little bit of, you know, proprietary information that they don't share with us. Um but they try to be transparent.

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Um so I I would I would never say our rating secure. I would say um I don't think there's been uh monumental shifts in any of the underlying um uh economic and financial conditions. Um I know they are um looking at our

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reserve fund balances uh the general fund balance. They're looking at um the overall economy, unemployment and that stuff. So, it all factors in. Um, and so certainly there are economic headwinds we're facing. Um, and I I expect that those will come up on the rating calls

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this year. Um, that being said, you don't usually get a downgrade out of nowhere. Um, usually there's a little bit of forewarning and signaling that, hey, um, conditions have changed unfavorably. Um, whether or not they would go so far as to lower our outlook,

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that is typically a first step. Not always. Um but uh yeah it is important um and and we will touch on that when we come back for the sale authorization. >> Thanks that was super helpful. Thank you. >> One more question. And I I last looked

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closely through the um debt philosophy um that's in the city's financial policies um some years ago and I just wanted to check whether there has been any uh philosophical shift in terms of um the view toward

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using cash versus using debt on the part of the city. In other words, pay as you go versus borrowing. Uh, President Brent, to my knowledge, not any philosophical shift. Um, of course, we want to finance projects

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where we can um in the most efficient way possible. So, um, we are keeping eyes on liquidity and oftentimes, uh, borrowing to fund these projects is is the most efficient way uh, to maintain proper liquidity for the city and keep cash on hand. But, um, yeah, for now I I

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would say nothing philosophical has changed. Thank you. Questions? All right. I'll ask the clerk to receive and file this presentation. Thank you, Mr. Wheeler. Thank you. >> Up next is the city controllers

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quarterly report for quarter 4 of 2025. To give that presentation, we'll have George Hargrove joining us. I will say welcome even though the news may not be entirely welcome.

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>> Thanks Rob. >> Yeah. Good afternoon. Uh, President Brandt, uh, Commissioners, uh, thanks for having me. I'm George Hargo, the city controller, and with me today is, uh, Robert Lang, our deputy controller. He'll cover some of the presentation, especially on the general fund.

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So, uh, just to just to as a reminder to everyone, these are the our the main point of the presentation is the our 22 2025 financial results through uh through uh, period 12. So, these uh, these results are have not been fully audited yet. We're in the middle of our

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uh standard uh year-end audit and um there will be adjustments and things like that that uh come up as well too as part of the audit. So, it's not quite final, but um the numbers will be final when we issue the 2025 annual comprehensive financial report that

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we're scheduled to do by uh June 30th or so of this year. And as always, um, like I like like like I mentioned before, you know, these these estimates are subject to change, particularly we'll talk a little bit about 2026 and, um, so, um, certainly, uh, you know, we we'll we'll be back, I think,

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this summer and everything as well, too. But feel free to check back with us as we, uh, forecast things monthly, um, as part of our general duties. Go ahead, Rob. Next slide. So, the main uh highlight I wanted to talk about for the city of Minneapolis is the city's really kind of in a couple

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different places here. If we're talking the non-general fund or enterprise funds, special revenue, internal services, city is doing um quite well. We have very little that's not meeting minimum uh policies or minimum balance policies and cash or fund balance or

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things like that. Um so that's roughly about 60% of the city. Um the general fund is roughly about 40% of the city. It is starting to get down to its minimum um balance and uh we'll we'll uh cover that a little bit later in the presentation. But if you look at um like

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where we uh where we started the forecast at, we thought it would go down about 67 million. It's actually gone down about 68 million. Um, and so, so if you look at, you know, if you compare like where we started in 2025 on January 1st to where we ended up the year, you

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know, you could see that roughly it has a negative cash flow of about $5 million a month. So, we'll come back to that figure a little later on in the presentation. Go ahead, Rob. Next slide. Um, as uh Mr. Wheeler mentioned before too, you know, continuing on with our financial highlights. Um, we continue to

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have a AAA bond rating um for our the three major credit agencies. Um, our another highlight is our self- insurance fund that funds the city's um, you know, insurance related liabilities and our general tort liability. Um, you can see

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we are above our short-term minimum policy by quite a bit, about 84.3 million. And um this year um at the end of the year here we we do reforcast our uh liability amounts. And so we I I do have to mention that we uh we are

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increasing our tort liability amount to about 134 million. So that went up um you know uh you know you know quite quite a bit or so from the year before. Um and we're uh we're reviewing these numbers right now by our auditors and they should be finalized very soon.

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Um, in terms of, uh, federal grants, um, we continue, uh, to, uh, to, uh, you know, monitor changing requirements. Uh, city has had many of their grants audited lately by the federal government. Um, so far, um, things have gone pretty well. Um, we have

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maintained, you know, roughly the same amount of money as before. Uh, some of that is through, uh, court injunctions as well, too. And then finally um we were awarded the 2024 for the 2024 annual comprehensive financial report we

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were rewarded awarded the certificate of excellence in financial reporting by the government finance office association. So moving on with more financial highlights. Um you um you can see our first bullet point here in 2025 they

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were about uh $19 million um under budget. We budget the full amount knowing that not all of it will be collected either because people can't pay or um because they take um they uh they challenge the valuation in tax court and sometimes get relief from that

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as well too. Um for our local sales tax, they were um that fund the downtown asset funds and the related um convention center and the target center. Um you can see they were essentially flat in 2025 compared to 24 just about

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$87.5 million. Um and during that time we've also increased our uh transfers to the general fund from the downtown assets. Um just looking at the last few months they do seem to be holding steady despite metro surge.

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And then finally um our police and fire departments finished about um little less than 18 mill the police added up about $18 million over budget in the general fund. the fire department um ended up about uh $7 million or so um over budget in 2025. Um that was about a

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$3 million increase from what we had um before in the previous forecast. We also separated out the settlement costs. We used to include those in the departments, but we felt all in fairness we should count them as their uh as their own entity so to speak. And uh we

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do plan to budget for those in 2027. Um, but we have been paying for those out of the fund balance. Um, so that's >> Mr. Harrove, could I just uh ask a clarifying question? >> Oh, sure. Sure. Yeah. >> President unbudgeted settlement costs.

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Are these [snorts] typically tort type settlements? >> Yeah. No. Uh, President Brianna commissioners, these are actually referring to our um Minnesota Department of Human Rights settlement due to the George Floyd incident. um you know that we had um we had settlements with the

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federal government that was uh dropped by them but the state still has their settlement that we've um that the city has agreed to follow. >> So so we incur costs for that consulting firm some other things too >> and so those costs were higher than anticipated. >> Um yeah we actually have to take them out of our fund balance. We didn't

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formally budget those but we do plan to next year now that we have a pretty good handle on on what they'll be. >> So that's a 2026 obligation. >> Yeah. Yeah. Yes. President Bratton commissioners. Um yeah, when I before I counted those in the departments that actually spent it, but we kind of keep a

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separate accounting of the settlement costs versus their regular operations and so we did separate it. >> I see. Thank you. >> All right, moving on to more financial highlights. Um you can see the first bullet point, we talk about the city's uh assets, which is certainly mentioned

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by uh by uh Mr. Wheeler and managed by Mr. Wheeler. Uh you can see there's been about a $50 million uh decrease from the end of 2024 until 2025. Um so about about 1.18 billion they're they were at at the end of the year. Um

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certainly as they decrease we get a little less uh interest revenue. And then in terms of um meeting fund balances requirements, you know, our minimum balances are set at the budget process by the city council. You can see self insurance will have a negative net

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position of about $134 million. However, it does exceed um our short-term u minimum balance requirements in order to pay um claims, you know, over the over the over the short-term horizon. Uh property services is about $700,000 or

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so below its minimum cash balance. That has improved uh greatly during uh 2025 and is getting close to to meeting the policy. And then finally, our engineering materials and testing lab um that works in the public works area is

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about um has a net position of about 200,000. So that's about 200,000 under their minimum fund balance policy. That's generally due to long-term pension liabilities of employees that work in that lab. And then a couple uh departments that we had reported before

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as being, you know, not meeting the policy. The fleet is now above their minimum balances. they have held back on some purchases of replacement vehicles. So, we continue to monitor that as well too. And then um and parking for the

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first time since um you know since the uh you know since the pandemic is now meeting its uh minimum balance in cash and uh fund balance. So that's certainly an uptick from what we uh what we saw before. And at this point, I'll uh invite uh uh

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deputy controller laying up to the podium to talk about the general fund. >> Thank you very much, George. Um and good evening, commissioners, President Brandt. My name is Rob Lang. I'm the deputy controller for the city. Um and my duties primarily revolve around uh the audit for the city as well as

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monitoring the general fund. So, as a reminder for those and for those that may be new, uh the general fund accounts for all the financial resources except for those required to be accounted for elsewhere. Practically speaking, what this means is that the general fund's collecting property taxes, uh, franchise

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fees, charges for services in certain regards, and using that money to pay for services that most citizens would consider a city to provide such as police, fire, um, public works, HR, accounting, um, in order to keep the

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city functioning. So, it's a very vital fund, uh, to the city. it. Um, as George was saying, the quarter three forecasted amounts are very similar to what we're seeing in the quarter 4 unudited balances right now. So, when comparing to the quarter 3 uh

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presentation, there shouldn't be too many surprises, but it's good to go through these final numbers. Starting off with cash balance, we did have a decrease of $58 million in the cash going from $234 million down to $176 million. The fund balance follows

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suit. And as a reminder, the fund balance is almost like net worth. It's your assets less your liabilities, and that becomes your fund balance. It started the year at 209 million and has since decreased to 140 million, about a 33% decrease in the fund balance in one

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year. This $140 million fund balance does exceed the 17% minimum requirement that we have as an internal policy which uh was calculated at $109 million at the end of 2025.

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So while we do exceed our minimum fund balance, what we want to draw your attention to is the uh accelerated decrease over the course of one year. And then finally, this fund balance does have a few restrictions associated with it currently. uh those being um the

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public safety aid, north commons, and plan use of fund into 2026. All of which totaling about $24 million resulting in approximately $116 million in unrestricted fund balance for the general fund.

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So, let's start with revenues here on this slide. Um, we grouped our revenues by major categories. And you'll see at the very bottom that we are about $9 million under budget on collections for revenues. The primary drivers, property taxes. We collected about $19 million

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less than uh budgeted as George previously described um which was about 97%. Uh then we also have franchise fees. We did come under budget by 3 million. I will say though that franchise fees did increase year-over-year. However, the

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budget increased at a faster rate. [snorts] And then uh licenses and permits uh about $5.4 million. The primary driver behind this being building permits um did not get sold to the rate that we budgeted for. All of this was offset by

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uh service charges primarily due to public works providing internal and external customers additional services than budgeted as well as the all other revenues category. The primary driver on that is unrealized gains and losses of about $6.4 million.

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So how does this compare to prior years? Well, in this slide right here, um, we are seeing in blue the 2025, um, budget to actual percentages and then in green is the prior three-year averages. And what I want to draw your

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attention to is that over the last 3 years, we've collected almost 100% of our budgeted revenues. Coming into 2025, we collected about 98.7%. And when you're dealing with a budget budgeted revenues of $660 million, this

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1.3% does add up to about $9 million. So on the other side, we have expenses. Here again, we're labeling them through major expense category. And at a future slide, we'll be showing each individual department. But in major category, what I want to draw your eye to is that there

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were two groupings over budget. that is public safety which was $14.7 million over budget. Um we'll get more into that later as well as public works which was $7.8 million over budget. However, I will say with public works um if you

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remember to the revenues where service charges was oh $5 million over budget they collected more revenues than budgeted and that takes money to collect those revenues. So that offsets a little bit of their overage. The remaining overage would be due to December had

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significant amount of snowstorms as well as wire theft that occurred um during 2025. So how does this compare to prior year? Well, this is a much more dramatic uh change than the average. So again, we see in blue the uh 2025 year and in

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green is the three-year average of the expenditures to budget. So over the last 3 years, we averaged about 91% of uh budget to actual. However, coming into 2025, we're now utilizing 98.8% of

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our budget. Um the result that we're seeing is that we're collecting less revenue than historic to budget and we're expending more expenses uh than historical to budget. The end result is we're seeing this big decrease in fund balance. All right. And then the big slide, this

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slide is taken from uh the 70-page report we provide city council. And I just wanted to draw your eye to this as it shows all the departments within the general fund uh as with their original budget, their final budget, their year-to-ate actual, and then finally the

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variance to that actual. And I highlighted the five departments that were over budget uh in 2025. Starting with assessing uh was over budget due to some project costs from 24 that bled into 25. Office of public

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service was a little over budget due to personnel costs. And then um but the big ones being as George previously mentioned fire department being $6.7 million over budget overtime. Police $17.5 million over budget again

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overtime. And then public works which we previously discussed. And then finally, at the very bottom, I didn't highlight it, but near the very bottom, you will see the settlement agreement money that was unbudgeted of $5.7 million, of which police spent about $3.6 million of that

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to adhere to the settlement agreement. Um, with that, I will pass it back to George to continue the presentation. >> Yeah, thank you. Thank you, uh, Deputy Controller Lang. Yes. Continuing on now, we can talk

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about the special revenue funds. And these are generally restricted amounts of of dollars that come into the city that can't be accounted for in some other fund, especially the general fund. So, um major areas that have those are the convention center, target center,

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downtown assets, you know, the the state laws, you know, kind of limit what we can do with that. um Val's community planning, economic development to have some funds such as local housing aid and things like that from the sales tax that have to be in a special revenue fund. Um you can see there's basically been very

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little change between the year end of 2025 and the year end of 2024. Both fund balance and then cash as well too um had very very uh very little if any change. Um bas basically if we uh if we go to

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the next page um Rob I can kind of explain a little bit more in detail. You can see the downtown asset fund the cash and the fund balance. If you look on the column on the right there side of it there you know did go down mainly because of increased transfers to the general fund and then that was offset by

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uh our community planning and economic development also known as CPID um went up you know approximately the same amount. So overall very little change in the special revenue funds. And then um our next category of funds is the internal service funds. And so these are these are generally

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departments and areas of the city that sell their services primarily within the city. So some major areas are the engineering materials and testing lab um that uh tests concrete things like that. Um does other work for public works. You can see um that's on the list as well as

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our fleet area, property services, store rooms, self- insurance, um it as well too. You can see in this case both our debt position and cash increased by about $34 million or so from the end of

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the year 2024 to 25. And if we turn the page to kind of look at, you know, what what drove what drove those uh you know, those increases, you can see our fleet went up about um 5 million in cash, 6 million in net position. Again, they held off um you

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know, replacing some of the vehicles and then also our self- insurance. We continued to build balances there too to offset our long-term liability. So, those are really the two reasons that the internal services uh went up. Um otherwise um most of them state uh you know just slight increases for for the

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rest of the internal service funds. And then finally moving on um is the enterprise funds. Uh these are these are generally our utilities that are uh based in our public works department. Um they generally sell their services outside of the city. Um you can see some of the big biggest areas are our

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sanatory sewer and storm water areas, our water area, uh solid waste and recycling and the parking fund. Uh CPAD has a very small enterprise fund as well too. And you can see there um that position went up quite a bit about $47 million from 2024 year end. And then

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cash went up about $25 million or so. Um and as we turn the page here to look at the at the at the at that you know what drove those results you can see um generally storm water you um if you look on the right side here went up about

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17.9 million in cash 10.7 million in net position. Uh water had a fairly big uh net position increase. Those are usually caused by assets putting in putting new assets in service. Uh then you can see parking. Um they are they're generally

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up quite a bit from the year before that put them above the minimum balance. And then uh the only one that really didn't go up was solid waste and recycling. And they they do have some increased u expenses now as as well as some capital projects coming up. So they've stayed um

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pretty flat from 24 to 25. And then finally I got um this slide here. I just want to take a quick look at 26. you know, we've been watching the general fund pretty closely. We did do a forecast um right around the first week or so in April or so. So, this is a little dated now, about five, six weeks

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ago. And obviously things have changed. But if we walk through the right side here, um this is I I kind of use this a lot as our planning worksheet to kind of show, you know, how you know how we're doing against our targets and and uh and what and what what options are available to the city and things like that. Um you

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can see the general fund balance was at about 209 million on January 1st of 2025 and then um what happened in 2025 is we brought in about 654 million in revenue but then spent 722 million and so it did

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cause it to go down like we mentioned before to about the 22% level versus our target balance of 17% below. And then in the budget process for 2026, there are some more items that we have to reserve. There's a planned use of fund balance in

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2026. So, um, that's in the budget process, uh, to pull, you know, a little less than $9 million or so out of the fund balance. There were some other amendments passed by the city council back in December. And then we also have to restrict, as Rob mentioned before, uh, the public safety aid that came in

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at the end of 2023 of $19 million. We still have about $10 million or so left of that. Then we have the North Commons Park that was owed to the park board. So you can see if you subtract all those restrictions off, you get the 116 million. That's our what we call the

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unassigned fund balance. So that's right in the middle of page there. And you can see that's at about 18% of of the $ 109 million target or so. And then you look at the very bottom section, we started to look at what well it's happened the first quarter of 2026. Um there are some

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more rental assistance approved for CPED. Um we went the other way with the North Commons Park because we paid that to the park board. And then we did as part of our forecast, the last two lines kind of represent that. So the expense forecast, you can see we expect that to

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be $16 million or so unfavorable in 2026. Again, that's driven mainly by the police and fire and the settlement cost, which we expect to be about $30 million over budget or so in 2026. And it's offset by um forecasting that the that

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we won't spend any of the contingency and that some departments will be under budget. So that's about $16 million unfavorable. And then if we look at the revenue side, we're projecting that to be about 14 million unfavorable generally because we know that the property taxes, we won't collect the full amount. kind of assuming the same

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rate as last year. And then we also expect interest revenue to be down as well, too. So that's about a $30 million hit or so. So if you add up all those numbers, that puts us at about 21 million 22 million under the, you know, under the target where the very last

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slide, you can see that a balance of about 87 million or so, which would be about 14% or so of the target, you So below below the target there um at this point in time although this is subject to change as we we'll do another formal

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forecast um in late July or so. Um otherwise they just you know what causes these changes in fund balance you know why why does it go up or down um certainly planned use of fund balance in the budget. Um sometimes organizations

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will go the other way where they'll plan on building balances. Um overspending by departments or under spending that could cause it to go down. Um and you can see you know we've had some overspending in the last couple years here. Certainly if revenue is less than budget um that

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cause that can cause the fund balance to go down and then if we appropriate you know additional spending out of the fund balance that can cause it to go down too. And as a result of this, we we didn't um roll over any um general fund budgets this year. Um normally

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departments if they have money left over in the general fund, we do bring a rollover resolution, but this year um we uh we left the general fund off, but we did roll over public safety aid and the non-general fund as well, too. And then finally, the last um thing that can cause balances to go up or down are

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things that we call on the balance sheet. So like if we owe more money, then that can cause the fund balance to go down. That's called accounts payable. And then conversely, we have receivables. If people owe us more money, that helps. If we don't have as much money owed to us, then that can

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cause it to go down, too. So, we're counting kind of both sides. What actually happens than what's what we expect to spend, but haven't yet, or what uh what's coming in, but we haven't received it yet. And then the last slide that Rob brought up here, this is a new um policy the city council implemented

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in December where we report, you know, um departments that are over budget. uh pretty much just follows from what we talked about before. Um you can see um the first three columns in the blue are what happened in 2025 and then our 2026 are forecasts for this

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this year that we're in right now. Um in the general fund as Rob mentioned, you know, we have assessing office of public service and emergency management um that were over budget um emergency management cases very slightly. Um we don't expect them to be over budget in

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2026. Um you can see the fire we're forecasting um they were over about 7 million last year we think a little over 6 million this year. Police was over 17.5 million when we took out the settlement costs and now we're

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projecting about 23.4 million over budget for the police. And then the settlement um Rob showed us the $5.7 million figure in 25 and then we're forecasting 4.3 million in 26. And finally, the last is the public works department. Uh they went over

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their expense budget by about 7.6 million, but a lot of that was because they had extra work in their um areas where they do work for others. And so in order to sell extra work, you have to incur the expense. Um but it the the

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extra revenue does offset that. So you can see in 2025 they did end up um about 2.3 million net if you uh subtract off the extra revenue from the extra spending and that was generally due as Rob mentioned to copper wire theft and

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then a snow event at the end of the year last year and then this year we expect them to be um on budget uh cashwise in the general fund. So with that that concludes my uh our presentation today. We uh can stand for any questions. Thank you. [snorts] Commissioner Bernstein,

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>> I like it when someone else starts, but um thank you. Thanks very much. Um these reports are incredibly impressive. Um I um I guess I maybe I'll start with two probably easier ones. The tort liability increase. Why was that? Do you know?

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>> Um yeah. Uh, President Brandt, uh, Commissioner Bernstein, it was due to increased estimates from our city attorney's office on on the case, the outstanding cases that we have. >> Got it. Okay. So, probably follow up somewhere else. Um, and then um there is

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I'm looking for the slide number. I should have written it down, but a different uh here we go. Uh, seven. The what is the difference between the cash balance and the fund balance for the general fund? >> Yes, absolutely. So the cash balance is the amount of cash in the bank and then

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the fund balance would be our assets less our liabilities. So sometimes we might have an expense that we don't actually pay for. Uh so we have a million dollar expense. Um it would not impact our cash cuz we didn't pay for it yet, but it would decrease our fund

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balance because it's still an expense that we acrewed for. So generally cash balance and fund balance normally, you know, follow suit and they trend together, but they're not not an exact science. Similar with accounts receivable, we might be owed money, but we don't quite collect it at year end yet.

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>> Got it. Thank you. Very helpful. And then one more that's hopefully also an easy one. um or maybe not, but um we've talked we talked when the when Assessor Momquist was here about the collection rate on the levy

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and that how that's fallen over time. I think it was I have it up here. Uh in 2015 it was 99.7% and now you're saying projecting I think you said 97% of the levy. Is that right? So >> um who do you think's like the best

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person to get under the hood on that? Um, is that an assessor's office question? Is there a different office? Cuz I'm just curious like how that breaks down. What sorts of properties are are we collecting less from? What, you know, income distributions, etc.

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>> Yeah, President Brown, Commissioner Bernstein. Yeah, we we would recommend uh the Miss Malquist's area, the assessor's office, you know, address things like that. >> Awesome. I'll pass it to you, Steve. Thank you, Commissioner Bernstein. Um,

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on the budgetary controls page, I just want to make sure I understand it. The green is essentially areas each line is a variance from the approved 2026 budget. >> Oh yes, uh, President Brandt, that is

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correct. Um, yeah, the variance for 26, that would be the amount over budget. Um, and also including public works as revenue. you know, I show that as a negative number because revenue comes in in credits in the in the accounting world. But, uh, but yeah, that's the amount over budget. That's what the city

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council asked us to report. We will come back with a full report on the general fund uh probably approximately late August or so when we come back for the second quarter uh financial report. I I think that the police department overtime issue has been hashed out

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more than I want to go into today, but uh fire department um uh is it a matter of not being able to fill positions that were

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No, that wouldn't work. Um the um I mean it's in the past it's been relatively easy to staff up a fire department when you have an a vacancy. You I think I can recall one time when they gave the firefighters exam and there were 2,000 people who took it I think over at the

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convention center. Um what's what's driving why is there such a need for overtime? Uh is it related to things like metro surge or is it Please go ahead. >> Absolutely. Thank you, President Brandt.

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Um so for the fire department, they a primary driver of it actually is a lot of the leaves that they have. Um PTSD leave, paid family medical leave, um paternity leaves, things of that nature. Um I think even with PTSD, it's about approximately 30 people that are um you

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know on leave, so we're still paying them. and they still have a position at the fire department, but someone needs to cover the shift. And so that is what drives the overtime. And the budget for overtime for the fire department um is is of a few hundred,000 where the actual

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payments going out due to these new leaves is is in the millions. and are the areas where the overages are occurring. For example, these types of leaves, things that are unanticipated based on past practice, one would think,

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for example, that um people have been taking family leave. Um unless it's under the new state program. Um can you elaborate a little bit? Um, so I, uh, President Brandt, I will say that, you know, like with PTSD

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leave, I believe that's um, five, six years now that it's been in play. I'll have to double check with, uh, Luke from the fire department on that. Uh, however, um, you know, admittedly that might be something we should probably follow up with you on at a later date to get a

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more accurate response to your question. >> Okay. Because at at some point, don't people switch over from PTSD to the police and fire pension for

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covering those costs, the pension plan, when when somebody retires on a on a a PTSD disability, >> I I don't think it's a retirement necessarily. They're just out on leave to be coming back once the leave is done.

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>> Excuse me. So these are people we expect back at an undetermined future point. >> President Brandt, that is correct. >> Okay. Uh is is the occurrence of these PTSD leaves something that has um

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is there a a common trigger for this? I mean, these date back to 2020 or um Metro Surge or is it another factor? President Brandt, I I actually don't know that information at this time. Um and I would have to uh

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confer with the finance manager of the fire department for a history on on the PTSD leave specifically. >> Perhaps you could put me in touch with that person. I I realize this is a little bit out of our lane and more in the city council's area, but u um I'll

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I'll be satisfied with that. Um and uh Commissioner Bernstein. >> Oh. Oh, Tommy. >> Commissioner Olsson. >> Yeah. So, I'm just wondering, so it looks like we might be at some point if things don't change going down below that 17%. When was the last time we went

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below that? Was that [snorts] like great recession or do we know off the top of our heads? >> Yeah, President Branta, Commissioner Olsen, I don't believe it's f I think it's been before that. We'd have to research that. I'm not I'm not I think

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it was quite some time ago or so. I'm sure we have there might have been different calculations of you know what the you know how we calculate the target balance because that is subject to change every year. It really hasn't, you know, during my, you know, couple years I've been at the city. But we're happy, you know, we could we could go back and

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look at our records. I know Rob, do you know? >> Um, President Brandt, um, Commissioner Olsen, I will say that, uh, I looked at the past 10 years and we have not, um, fallen in the past 10 years below our minimum fund balance. So, I can confirm that as to last time we did, it would

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take some more research prior to even 10 years ago. >> Okay. Um, you know, sometimes, you know, at Park Board as as we do our budgeting, you know, we've kind of looked back in the past of when we were in really tough budgeting periods. Um, and so sometimes

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that can help as we make decisions moving forward. Um, you know, to see maybe what the city did, what some lessons were learned from there. But so it seems like it's fairly safe to say, at least in recent memory, this combination of lack of revenue

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collection plus extreme over budget of a couple departments is has put us in a fairly unprecedented situation in recent memory. >> Uh yes, President Brandt, Commissioner Olsson, yes, that that you're correct there. it the over spatting really has has been the one thing that's kind of

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been unexpected and and so that that's kind of put us a little bit more in the you know in the downward trajectory. Yeah. >> Yeah. Our city's been through a lot recently but we uh we'll have to rein it in. I uh just wanted to comment having

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written about the big cut, massive cut in local government aid uh back about 2009 2010 uh that the governor at the time felt was necessary in order to balance the

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state budget. um that triggered massive um cuts at the city level and some of those we haven't recovered from yet, but there were positions held open and so that was met by um by um accommodations

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on the spending side, particularly the personnel side. Um, I would say I was heartened to hear that the mayor was looking in his state of the city speech at u um the whole range of city programs

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and and what programs have served their need and u perhaps are not vital to the city going forward. Um I have um I know that last year for example he recommended eliminating a couple

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programs that were near and dear to my heart. I I I don't know if they survived or not with council deliberation, but uh u it in a situation like this, it sometimes requires shared sacrifice until we can come up with new sources of

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revenue, which uh we'll get into briefly a little bit later in the meeting. Commissioner Bernstein, >> um do you know uh of [clears throat] the spendown that that ended up now at 68.6

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6 million. How much of it was planned versus arose throughout the year? >> President B Brandt, uh, Commissioner Bernstein. So, uh, we had a planned use of fund in 2025 about $24 million. Then

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we approved rollovers of about 44 or $48 million. I'll have to reook at that. In the mid40s, the total amount being about $66 million. Uh, so I will say that we had approved and planned to spend down

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$66 million of the general fund budget. However, what wasn't planned necessarily was who was going to spend that money. And so what ended up happening was some of those um spendings that we were expecting were due to rollovers for uh certain projects and certain contracts

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that other departments had uh and then possibly wanted to roll over into the next year that we did not get to roll over into 2026. So at this point, while we did plan to use that funds, we were planning on doing other things with it. Instead, the city spent it on overtime

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for public safety. That was an incredible answer. Thank you. It's very concise and exactly what I was asking. Thank you. Um I got one more question and it's a it's a little it's broad. It's um but I'm just trying to understand the internal service

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funds. And so as I understand it's a fund as this says um created to track when the city's providing services essentially to itself. Is that right? And so um is it all I guess my question is is it always a city entity that is

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paying into the internal service fund um and that any change in the general fund would result from a special revenue fund paying in or is there sometimes a third party non city entity paying into internal service funds? So I guess I'm

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asking the net change through that's channeled through the internal service funds. It comes either out of the general fund or out of a special revenue fund. Is that correct? >> Uh pres president President Brandt, Commissioner Bernstein and also um the enterprise funds too. Got it. They can

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charge anywhere in the city and and we have a we as part of the budget that we do, we allocate costs around the city and then they budget for that. So the decision to um spend down the general fund could be, you know, to preserve,

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for example, um a special revenue fund or you could decide to spend down a Russ a special revenue fund and preserve the general fund. But it's all within one of those three areas. >> Yeah. Yeah. >> Probably not a helpful phrasing. Sorry, but

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>> that's okay. Yeah. President Brack, Mr. Bernstein. Um yeah, you can I mean generally the general fund is unrestricted. So you can't necessarily like if you decide why we don't want to spend out the general fund, you can't necessarily replace that spending from other funds

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because they'll have their restrictions on them, you know, you have to spend it on certain things, you know, like affordable housing, for example. And you can't spend it on the police or something. Yeah. Yeah. So that's kind of that's why the general fund is so important because it has the least amount of restrictions. >> Got it. And so when we're pricing things

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internally, that happens within each department or is there a central group that does the internal pricing for like how much we charge for certain services? >> Yeah, President Brand Commissioner Bernstein. Yeah, our budget office handles that. We've in fact have a

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budget analyst that specializes in that. And so and so she works with the departments and sets the prices and then Rob and I help allocate and my staff help allocate the cost out as part of the budget plan. Then we of course have to fund it and we and we're doing that right now for 2027. >> Got it. Yeah. I was think I was reading

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a little bit about that in the budget book. Okay. I'll relent. Thank you. >> Any additional questions? Okay. I I have to say that um reviewing this report, I recalled a couple years ago when I urged the mayor to take more out of the budget

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reserve for um uh avoiding a bigger property tax increase as well as shifting more from the um downtown assets fund which was um recovering at that point. And I have to say, uh, Mayor

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Culpa, I did not anticipate that the general fund would decline this fast. And I think that's uh we didn't we didn't anticipate the police and fire overtime and we didn't anticipate

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um the decline in collections but um of property tax but um was good to heed the u advice of our finance folks when they come to us. Uh if we have no further questions I will ask the

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uh clerk to receive and file this report. Up next we have the BET work planning goals and objectives discussion and to give that update is our staff member Christina Kaidling

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who will be arriving at the podium once she makes her way through the from the inner sanctum out to the outer sanctum. And just a quick heads up, we do have another actual park board meeting uh today. We're as we're going through our budget process. So, um pretty soon we'll

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be done with those, but I will be leaving at um 5:20ish, 5:22ish. though if there's some discussion or something that we want to skip to or get to early while we have quorum. >> Uh, Commissioner, I think the only thing I would tell you is that it's currently

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my intent to cancel the May 20th meeting and push off the business that might have come up there until one of the two June meetings. >> And one of those will be, of course, the park board presentation. >> Okay. Thank you for that. >> Thank you.

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And you can check back with me to see if that was approved. Good evening, President Barry and commissioners. I guess I would ask for guidance from the clerks then. Um, if we do only have five minutes, I just wanted to ask how that works with our quorum.

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If I begin speaking, if there can be discussion or if you wouldn't mind. Uh once the body loses quorum, discussion on this item can't happen. The the meeting would have to adjourn at that

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point and any unresolved things on our agenda would have to go to the next regular meeting. >> May I present then and they just cannot respond to it or can do I need to stop presenting would be my question. That would be you would have to stop

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presenting at that time as the meeting itself would have to stop. If uh any members have any questions from what they had heard since then, they would be able to talk to you offline uh and be able to um ask anything that they might have from that point. Um or at this

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present time, the uh president could adjourn and move or make a motion to move these items to the next regularly scheduled meeting. and you could pick up this presentation at that point. >> Okay, President Bryant, I will defer to you, but I um it does look like we only have about three minutes and I think the

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work plan's really important and deserves more attention. >> Maybe you could advise us on how long you anticipate your presentation to be and we could postpone the discussion perhaps until a subsequent meeting. >> Sure. Um I would say if you can give me

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10 minutes, I could roll through my portion of the presentation. I do think it'll require discussion, but I could I could knock it out in 10 minutes. >> Proceed, please. >> Okay. Yes, sir. Um, so my name is Christina Kiterling. I'm the senior adviser to the board of estimate and taxation. I'm so glad to be here with

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you. Thank you for once again having me. Um, on earlier last week, I sent out a memo with an attached proposed work plan. I hope that everyone did get a chance to look at it. If not, that's okay. We can certainly take a look at it now. I do have a few slides. The majority of what we're going to be

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referring to is the um memo and work plan itself, but the guy the slides are just meant to guide our conversation. And I apologize, I'm going to try and go very fast through this. Um so, first I'd like to go through the what and then we'll move over to the how or excuse me, the why and then we can move on to the how. So, what is a work plan? A work

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plan is a living document, meaning it can change over time. What you see on there today is just a draft. It's just a proposal. absolutely does not need to stay the same, but it's a living document that informs the work of the BET outside of your day-to-day chartermandated activities. So, some things are not going to change. For

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example, you guys receive and file bond transmitt memos. That's chartermandated. Not proposing that we change any of that. We're looking at your duties and your objectives outside of your day-to-day. Um, the work plan identifies goals and objectives that you as a board wish to accomplish. Um, staff

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assignments would then relate back to those objectives. So, it's looking at what you as an entire body look want to accomplish this term, what you want your resources to go to, what you want your staffer working on as a majority body.

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The work plan must be adopted by the majority if desired by the board. So, right now, you don't have a formal work plan. What I'm asking you to do is look to see what consensus among your members there is so that you can adopt this formalized work plan and we can better

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work towards what is the will of this board for the next few years. So why is this being suggested? There's lots of different reasons but I'll sum it up in five. First of all, it facilitates discussion amongst the entirety of the board. Um I do realize we're from Minnesota, but sometimes we

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need to be direct. I have noticed from my time here on the BET that sometimes we'll have individual members bring work ideas or objectives and it's really hard to get feedback on that and get necessarily a formal motion and carry over the objective from one meeting to

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the next. That's what we're trying to do here. We're trying to directly talk about the proposed objectives and say yes that is something the majority of the board wants to discuss or no that's not something that the majority of the board is looking to take up. So just a little bit more clarity on some of these different ideas and these different

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topics that we right now are bringing up as one-offs. Secondly, it serves as a foundational tool for other documents such as the staff performance plan. Um if we have a formalized work plan for the board, we can have a formalized work plan for your staffer and everything

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that I would do would relate back to what your goals are for this term. It all rolls up um into one enterprise. Third, this mirrors the goal setting process the city council committees are going through um currently and it aligns the BET more with the rest of the city enterprise. That pretty much sounds exactly like what it is. They are going

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through the same process trying to establish what they want to accomplish over this term. You would be doing the exact same thing. It avoids veering outside of the scope of the BET or at the very least if we choose to maybe veer outside it explains the why you are doing that. It makes it a little bit

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more transparent as to what the BET is trying to accomplish and why they are expending resources at these different avenues. Um, and then finally, it relates staff time, board objectives, and future pay planning back to the overarching city overarching city goals and values. If you reference that actual

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work plan memo that I sent out, the first page is essentially a disclaimer talking about that the different objectives I have on there are just proposed. You can take all of them. You can decide to change all of them. They are just proposals. However, what I highly recommend is that we relate our

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strategic objectives back to the city goals and the city values so that everything we do as an enterprise can roll up and we're able to easily articulate why the board of estimate and taxation is going after certain objectives, how it fits into the values

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of the city of Minneapolis. And finally, the how. Um, so if we could adopt all strategic obser, excuse me, adopt all strategic objectives today, that would be great. I anticipate there will need to be some discussion based on

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the board. So we need to think about how this conversation will continue. I, as your staffer, I'm here to help with that. I can send out goal setting surveys. I can work with you individually on emailed responses or discussion and I can share those results to try and see if there's any points of

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alignment that we might want to talk about as an entire body. So that's it for the slides. If you could please reference the document that I previously routed and you should all have a copy of. I'll also put it up here so that everyone can follow along. So here's

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that memo I talked about. We're going to skip down though to page three where we actually start talking about those strategic objectives. These strategic objectives are just proposals that I have come up with based on watching your conversations over the past few months. Although I was gone, I was trying to

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keep up with you. Um, if you like some of these, like all of them, we can certainly keep them. If you want to change each one, we absolutely can. I would ask that if you don't like a particular strategic objective, please don't let it um mar you against the idea of a work plan. I think if the board has

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a work plan, that's a very good thing. If you want to change the specific things I have on here, totally fine. Um, that doesn't mean we shouldn't have a work plan, however. Um, so I'll go very quickly, but the first one proposed is to do a staff audit of different opportunities for public participation.

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As you probably know, it has been quite the lift to try and get public comment on things like setting the maximum property tax levy. I think that we can probably look into are there any other avenues to try and get general public involvement? What do other cities do for communication to the general public? How

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do we get representative um repres I don't want to say representative budgeting so much but more representation in the levy setting process so that the general public feels that they know and that we are being very clear with the different avenues they have to give their opinion on on

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what we do here at the board of estimate and taxation. um that one I don't expect to be very controversial but you can certainly give me feedback on that. Secondly, um, looking to strengthen our communication frameworks. Just to give you an idea, when I started this role, my job description talked about a bunch

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of different departments and it had how often I talk to those departments. I have a feeling the job description is pretty old just because it does not have seemed to have kept up with the job today. I don't necessarily talk to those same departments, but there's many others that I talked to. So for my second strategic objective, I'm

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proposing that we try to strengthen our communication framework to make sure that the BET is getting the information out of the enterprise they they should be to do their job effectively. I think we should have a communication audit to see how we're working with all those different departments. Our third and fourth objective are taken directly out

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of what I've heard from you uh the last couple meetings. The number three is to continue a partnership with city council concerning alternative revenues. Um, I can certainly allow the commissioners to speak to that, but that would essentially be um taking what is the

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majority will of this board as far as municipal revenue goes. What did you take out of that presentation and what would you like to finalize or enshrine as the BET's opinion towards that matter? Number four is to advance and secure amendments to the city charter related to the board of estimate and taxation. I know President Brandt, you

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had specifically brought that up. Um, I wanted to call that out directly as a strategic objective so that the board can vote on that and say yes or no, they want to direct me, their staffer, and the the resource resources of the board towards obtaining that objective. Um, or

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if they do not, we could take that off, but that is what I have listed for strategic objective number four. So, I apologize that I went so fast through that, but if you have any questions for me, I stand for them. I would suggest that we defer questions uh so that we can complete the board's

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business while we still have a quorum, right? Commissioner Bernstein, I yeah, I guess I was just going to ask so um what is there a process that you're recommending for carrying forward the development of

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the work plan? If you were comfortable with the strategic objectives, you could do a motion to adopt the work plan today. If you wanted to change that, you could on the fly. You could say like, for example, I want to adopt a strategic objective one and two. I do not want to

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adopt three and four today. Something like that. If you're not comfortable adopting this work plan at all today, um I would say to please communicate to me either now or after the meeting how you would like to see that happen as far as continued uh communication. I know that you will run into open meeting laws, but

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that's why you have a staffer. You all can communicate with me your objectives moving forward and I can certainly bring that back to the board. >> My preference would be to to discuss this as a group at a future meeting uh probably the second meeting in June when we'll also be taking up the BET budget

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and uh one additional item um that pertains more internally. Um so um could we oh yes your performance evaluation um which I want to update my

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colleagues on. Um so I think I'll ask you to stand down now and defer to future discussion by the board and um um move on to our new business while we still have our >> Excuse me, President Bran. I I wonder if

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maybe if we if we as a board if it might be better if we maybe just kind of approve this as almost like preliminary so that there's some things that we know that you can get started on and work with us on and then we can just know as

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a board we could maybe amend it at at at that future date because I just wonder if there is some advantage to saying you know because you know mostly I think I am on forward with with the the things listed here. So I just wonder if there is some advantage to approving now and

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amending later. >> Well, if there is consensus, I'm not opposed to that. >> I guess I have a similar question is can we approve the concept of developing a work plan without agreeing on the strategic objectives which I feel like probably require a little bit more

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conversation. Is that and would that be helpful or not particularly? >> Yeah. wouldn't want to waste. >> I like I love I just want to say like I love what you've put together here and I think this is very important and helpful and but I think like thinking about the objectives and what city goals and

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values they relate to. It's going to take a little bit more time, but I want to like I'm happy to provide whatever stamp we can on the development of this plan and for to encourage folks on the board to start communicating with you about their thoughts about different things and communicating with one another about them because I think

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that'd be very helpful and I don't want to hold it up. >> Yeah. My my recommendation would be to do a motion to uh direct staff to do a staff direction to um continue this endeavor. Um just because I think if we were to pull everything out of it, I'm not sure there would be enough

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substantial information here to actually adopt. >> Uh is there a motion? Does that effect? >> I move to hold this whole entire discussion to our next meeting so that we can take it up in full. Uh could I ask that we not make it the next meeting

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but the meeting of June 24th because we have the park board and the city budget presentation uh and another item uh on the 10th. >> I move that we uh continue this conversation at our June 24th and leave

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prioritized space for it so that we can fully complete the discussion and take action on it. >> Is there a second? >> Second. All those in favor? >> I >> I >> opposed. Okay, we have a direction.

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>> Thank you. >> And our next new business is receiving projects from the city council for which the board of estimate will consider approving the issuance of tax exempt geo bonds. [snorts] Projects are in your packet. Are there any questions?

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Seeing no discussion, I'll ask the clerk to receive and file the project. And we have lost our quorum. >> We have lost our quorum. That was before that receive and file was able to be completed. >> So you'll put that on our next agenda. >> Uh yes. Oh those will be continued to

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the next regular meeting of the BET. >> Okay. Uh since we are um have lost our quorum, I will adjourn the meeting and ask my colleagues to stick around for like three minutes where I just do a little bit of update. Um mainly for the

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benefit of the people who aren't here. Uh but uh meeting stands adjourned. Um I just wanted to let people know I know commissioner