Good evening and welcome to the regular meeting of the board of estimate and taxation for Jan. January 28th, 2026. I'm Steve Brandt, president of the board. Before we begin the meeting, I would like to ask the clerk to read our reminder on diction.
>> 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 captioning as a further method to increase the accessibility of our
proceedings to the community. Therefore, all speakers need to be mindful of the rate of their speech so that our captioners can fully capture and transcribe all comments for the broadcast. We ask all speakers to moderate the speed and clarity of their comments. At
>> this time, I'll ask the clerk to call the role so we may verify the presence of a quorum. Member Chugai is absent. Fry here. Olsen is absent. Payne >> present.
>> Vice President Bernstein >> present. >> President Brandt >> present. >> There are four members present. >> Let the record reflect we have a quorum. I will now acknowledge that we meet today on land of the Dakota and the
Ojiway. And I will also add the acknowledgement of the historical trauma caused by the dispossession of that land. We'll now proceed to our agenda, a copy of which was posted for public access at the city's legislative information and
management system which is available at lims. Minneapolis.gov. And uh board members, the agenda for today's meeting is before us, but I am going to suggest at the mayor's request
that we move an item uh item six down behind items five and seven so that we can get the voting items out of the way first. Uh may I have a motion to that effect? >> So moved. >> Seconded. >> All right, we have a motion and a
second. Any discussion? Have a proper motion. Uh with that seeing none all in favor say I. >> I opposed. Nay. All right the eyes have it and the agenda is adopted. Next is the acceptance of minutes from the December 10th, 2025 regular meeting and
the January 14th, 2026 organizational meeting. May I please have a motion to accept the minutes? >> So moved. >> Second. >> Seconded. >> All right. We have a motion in a second. Proper motion before us. Any discussion? Seeing none, all those in favor say I. >> I.
>> Opposed? Nay. All right. The eyes have it and the minutes are accepted as presented. Uh item four on our agenda is the acceptance of public comment and we do not have anyone signed up to testify before the board on an item on our
agenda today. Uh reminder that you have the opportunity to speak at any board meeting on an item that's on that meeting's agenda. Um, our next item is an bit of unfinished business from December. Uh,
the bond proceeds reallocation resolution that pursuant to the rules, the vote was insufficient for when it was considered in December and the matter was referred to this meeting. The body will now reconsider this item and
I'll ask David Wheeler from banking, investments, and debt to lead the presentation. Uh good afternoon, President Brandt and Commissioners. I'm Dave Wheeler, senior manager of banking, investments, and debt. Uh I have two items before you today. Uh the first uh unfinished
business from the December 10th meeting. Uh just a quick uh refresher. This is related to the uh annual project closeouts for public works. Uh the bond reallocation uh bond proceed reallocations related to those project closeouts. Um up included in your
packets and up on the screen are the projects and amounts uh being affected here uh with this resolution. This is a concurring resolution to council action taken uh in November of 2025. Uh President Brandt, I do believe public works submitted a written response to
some of your questions this week. Um we do have a representative of public works with us today if there are any additional questions you would like to ask. Um, with that, I'll stand for any questions on this matter and uh then move on to the next. >> All right. Are there any questions or comments?
Okay. Seeing none, I will proceed. Um, I read the memo from public works and this is not directed at you, David. Uh, but I wanted to say that I'm somewhat shagrined that when the council
votes on a bonding resolution or bonding authorization, I should say in December of one year with the construction season just four months ahead that public works doesn't alert people ahead of time when a project is uh going to be pulled. Um,
when we sell bonds, we pay interest. And u I don't think we um should be paying interest on projects that aren't going to go ahead and u I know that at least four members of this body uh depend on protected bike lanes for part of their
commuting and they're significant safety issue. I hate to take money away from um a protected bike lane and I'll leave it at that. But I'm hoping in the future we can have more care exercised in what departments request be sold for bonds.
Uh any other discussion? All right. Seeing none. Uh let's see. Do we have a motion? >> So moved. >> Okay. A second. Any any further discussion? Okay. Uh will the clerk please call the role?
>> Member Fry. >> I. >> Payne. >> I. Vice President Bernstein I. President Brandt >> I. >> There are four eyes. >> Okay. The resolution is approved. Up next is item that was originally on our
agenda as number seven and that is the bond proceeds reallocation resolution. And I'll once again ask Mr. Wheeler from banking investments and debt to lead on this item. Uh this is again an additional uh bond
proceed reallocation resolution. Uh this went before council and was approved in December. Uh and this is related to uh water project 35 bond. Uh the project had been bonded for uh subsequent to bonding. Um the water project uh was
revealed that there are it qualified for tax credits. Um however the project needs to be paid from water revenues itself and can't use bond proceeds in order to utilize those tax credits. Uh so in order to spend these bond proceeds we do have uh the best course of action
here is to reallocate these proceeds uh these will be um moved to water 12 uh the water distribution improvement project um to finance additional project expenses in in that program. Um, so this
is a unique situation in that the the water 35 project is not being closed out. Uh, but the bond proceeds aren't effectively used there. Uh, so we are are moving them out to be spent in another project. Uh, it hadn't help us comply with IRS regulations revol uh,
include or related to spending bond proceeds. So this is just the the only matter here. Uh, total of uh, two just over $2 million in bond proceeds being moved. >> Okay. Okay. Do my colleagues have any questions or comments? All right. Seeing
none, um may I have a motion to accept resolution 20260002? >> So moved. >> Is there a second? >> Seconded. >> We have proper motion before us. Any discussion? Okay. With that, um will the clerk please call the role?
>> Member Fry. >> I. >> Payne. >> I. >> Vice President Bernstein. >> I. >> President Brandt. >> I. There are four eyes. >> And I didn't think about this before. Oh, so the motion passes and um I'm
wondering if we should skip to number eight to take that a little bit out of order simply because Mr. Wheeler is here and it's a bond transmitt item. Uh the uh issuance of taxexempt general obligation bonds to be considered for
issuance at a future meeting. Do my colleagues have any questions or comments? Okay. Uh I believe uh Mr. Wheeler this is for uh assessment at the uh upper harbor terminal for about two blocks of parkway to be built. The only
question I had was when I looked at the uh county property lookup, I noted that the land on one side of this parkway is now listed as CPAD land and the land on the other side is listed as uh parkboard land. And do we essentially assess
ourselves in that circumstance? >> Uh, President Brent, I would uh defer to uh probably the assessor's office or or public works on that question. I'm not familiar with the specifics of this project. >> Okay. Uh I will then contact uh one of
those entities. It's not something we're voting on today, but we will receive and file it if there are no other questions. And thank you for your uh presentations today. You are free to go. >> All right. And u the clerk will receive
and file that report. We are back to the city controllers quarter 3 report continued from the December 10th, 2025 meeting. I asked George Harrove from finance to lead on this item. And uh I understand the mayor's time may be
limited with us today uh because of other responsibilities. So um if we run out of quorum my u intent would be to stay here with the meeting adjourned and ask the questions I have and spare the rest of you and Mr. Hardrove can answer
as best he's prepared for. >> Yes. >> Okay. Good. Thank you Mr. hard. >> Yeah. Good afternoon, uh, board of estimation and taxation. Uh, uh, President Brandt, u, Vice President Bernstein, um, commissioners, um, thanks for having me today. My name is George
Hardgrove. I'm the city controller. Uh with me as well as uh Robert Lang, our deputy controller, who will uh talk about the general fund in uh in particular. Um so just to just to kind of recalibrate where we're at right now, um
this is the presentation um for the as of September 30th. So these forecasts are a few months old. I'll try to, you know, give a few updates at times, you know, for where we're at now. >> Mr. Hardgrove, if you could just hold for a minute. Oh, sure. Clerk, please note the arrival of uh Council Member
Chai. Welcome. Thank you. Go ahead. >> Oh. Oh, okay. Uh, thanks, President Brand. Um, yeah, I just wanted to just say that this is as of the end of uh September. Most of these forecasts were done in October, but like I say, I'll try to mention a few things um as we uh as we uh go through the presentation
here. Um so uh anyway the information is un audited. We will have final numbers in our uh in our annual uh financial comprehensive report. Uh we've started working on that now as well as our annual audit. Um finance always recommends you know we not make any
decision you know any uh final decisions on spending till uh till uh till all the numbers are final and things like that as well too. and then we'll have updated information uh approximately in April for um for uh for the year end uh fourth quarter report.
So moving on to the highlights um we the city continues to spend down its fund balances. Um after at the end of the second quarter I was when I was here in the summer we had forecast a spend down of about 60 million or so in the in the general fund. Um this is now um as of
October is like at 67.6 million and it's now in the 70s now that we look at the books uh recently. So we continue to to spend down on the on the general fund in particular but a few of the other funds as well too. Uh we still have a AAA bond rating from all the three major credit
agencies. Um property taxes are 17 we at the time were projected to be 17.4 million under budget. Um, I will say that that that the budget is the full collectible, the whole amount that was levied. We always know that there'll be a certain percentage that's
uncollectible. So, we would never expect the the the budget to fully equal the I mean the actuals to fully equal the budget because there's always going to be uncollectible amounts. We've been monitoring the local sales taxes, especially in our downtown asset fund.
Um you see as of the end of September um there for the month of September they're about a couple million dollars less than 2024. Since then it does seem to have stabilized but it still is under for the year. So we watch that. Uh police and fire combined are uh were projected to
be about 25 million over budget. We do think it's going to be a little bit more than that now. Um maybe add a couple million to that as well too. uh self- insurance fund uh continues to to uh to be above the minimum policy by 117 million. Um uh we've accumulated
significant reserves to protect the city against um legal losses and of course federal grants we also monitor as well to um due to many changes in the federal government and uh new terms and things like that. So um we work uh we work on
that uh monthly. U moving on for our financial highlights. Um we can see that our book value of um of our uh cash and investments as September 30th is about 1.186 million. Uh it's an increase of about 140 million over the September
2024 value. Most of that is again in self- insurance and then our enterprise funds you know where they're held in reserve. Um if we look at um some of the departments or some of the areas in the city that um have uh either fund balance or uh cash reserves uh uh are projected
to be under the minimum amounts in our financial policies. Um we list self insurance just because that has a negative net position but it is meeting all the short-term goals that are in our policy. um fleet. Um we're projecting that to be
about 7.9 million as of the end of this year, which is above our target balance. Um but we do expect that in the years uh going forward to um to be get below the minimum. Um they continue to catch up on uh on purchasing vehicles. It was very
difficult to purchase vehicles during the pandemic and shortly after that and uh the costs have risen uh substantially as well too. Our IT fund is projected to be about $8 million versus a target balance of 9.3 million. Uh again, that's
mainly due to projects. Uh the parking fund is improving at year end. We expect it to be about 2 million below target, but we're hoping that it gets back into the targeted range if not this year, next year. And then property services project to be about 2 million versus our
target of about 4.6 million. Then the convention center is also under the target, but we don't feel that's a a cause for concern because um the downtown assets fund as a whole is pretty healthy and we just need to transfer um do some transfers between the downtown asset funds and the
convention center. I believe there was a resolution that came up um earlier uh in 2025 that that if we would have taken it out of the downtown asset funds, it wouldn't have affected the convention center. So um so we'll have to do a little adjustment there.
At this point, I'll introduce uh Robert Lang, our deputy controller, to talk about the general fund. Uh thanks, Rob. >> Thank you very much. So, as a reminder, this is the quarter 3 forecast that was presented early December um that we're going to be looking at right now. We of
course have uh looked through the accounting numbers as of today as we gear up for our audit that we're currently being engaged in um with the state. um that will be going through until June when we expect to have our audit finalized. Um but with that, as a
reminder for you as well, the general fund, the purpose of this fund is to account for all financial resources except for those that are required to be reported in other funds. Uh cash balance for this projection um was projected to
be uh one uh $166 million versus the 234 million that we ended with at last year. uh showing a significant use of cash in 2025. Um the projected fund balance uh was
$141 million at the end of quarter 3. As we'll get into with the numbers, we are seeing about 3 to4 million more in expenditures than revenues collected based off that forecast. So that number is has has decreased um since the quarter 3 forecast.
This would still exceed our 17% minimum fund balance requirement which would be 109 million based on policy. So looking at that uh unassigned fund balance, we'll see here that we started the year at $29 million in fund balance.
We have forecasted revenues and expenditures with significant expenditures resulting in $141 million in remaining fund balance. As a reminder, we're looking about $3 to $4 million less now as we enter the year end. Uh plan then we have planned use of
fund balance and other restrictions showing $118 million in unassigned fund balance. Now about $115 million to $114 million in unassigned fund balance. The target of 109 million resulting in over
but over the 17% minimum of 9.5 million now about 6.5 to 6 million. So revenues, the revenues are coming in about forecasted right now. Uh we still are waiting on franchise fees and certain property tax um remittances to
come in. However, the forecast from quarter 3 is lining up very closely. We'll see here that uh we were projected to be $18 million under budget in revenue, primarily driven by property taxes, franchise fees, and licenses and
permits. How is this compared to prior years? Well, three-year average was about 100% of revenues that were budgeted were collected. Here in 2025, that is about 97%. So, we're seeing a 3% decrease in what
we budgeted versus what we collected, primarily driven by property taxes. Um, >> yes. >> So, let's look at the other side. Uh, yes. Question. >> Uh, Commissioner Bernstein, >> sorry, could you go back to that last
slide real quick? Was this >> Yes. So this table shows in blue the actuals and then in the green is the three-year average. So that's 20 24 23 22 uh of
what we collected throughout the quarters. So um the main one to be looking at I suppose would be the December 31st projected and that's where we see the three-year average is 100%. Now in 2025, we're just not collecting what we budgeted. And that's uh one of
the driving factors of this minimum fund balance crunch that we're currently seeing right now. >> And that's across all revenues. >> That's across all revenues. >> Okay. Thank you. >> Individual revenues is on the previous page grouped up by major revenue
category. So that $18 million forecasted, which is coming in pretty close, uh, is driven by that 17 million property taxes. On the other side, we got expenditures. This is where we're seeing about 3 to4
million more across all departments um, in expenditures than originally forecasted. of which you will see there's two primary areas that are over budget. It would be public works as well as uh public safety.
Um but we can get into the individual departments on a future slide might be more helpful. So similar to what we looked at with revenues, how are expenses coming in compared to prior year? Well, here we'll see blue is again actual of 2025 and
green is the average and it's inverse from what we saw on the revenue side. Uh, historically, the 3-year average was 92% expenditures of what we budgeted having about an 8% savings. In 2025,
we're seeing 97% of what was budgeted to be expended. Now, probably a 98% as we close out the year. Um again that that impact is is crunching um the 17%
minimum fund balance requirement and this is the big spreadsheet. So this shows and this is just the expenditure side. This shows on the first two columns the budgets the year-to- date actual and then the second blue column is our projection. uh and this was of
course as of uh 2023 or quarter 3 that we presented. We do have some uh updated information based off of current accounting. We'll see here that if you combine public works as one department, we have six departments out of our 26
that are over budget. Um so let's go down that list. Attorney $490,000. They're actually coming in a little better right now. Uh we'll see how we end at year end, but they'll be probably very close to that amount. uh assessing department and office of public service, very similar story.
They're staying about to the projected overage. Uh I think $16,000 more for ops and assessing is um almost right on. So then that brings us down to fire. Fire
is currently about a million dollars more than was on the projection there. Uh similarly with police were about a million to a million.5 more than was forecasted. The um and then finally we do have
public works. Due to the snow emergencies we have seen about a $2 million increase in their expenditures. So that's about the $4 million that we were looking at for additional expending
than what we originally forecasted. the other departments. There are no other departments that are over spent. Uh every department currently, let me tell you, currently because we are in preliminary, there could be additional approvals, but as it stands today, the six that were over are still the six that are over. There's no one to be
added to this list. With that, uh I will pass it back over to George. Thank you. >> Uh yeah, thanks, Deputy Controller, uh Lang. Um before I move on to some of the other uh non-general funds, I wanted to just go back a couple slides here and talk a little bit about this slide right
here. Um just kind of give a little update on it. So as you you know, as Rob mentioned, you know, we're basically calculating like how much money do we have left, you know, in our general fund balances. And you can see the fund balance January 1st is 29 million. We forecasted revenues of about 645
million. That is holding right now. We do think that we'll end up just about there. Uh the expenditures however we projected about 712. We think they'll be about 7:15 at this point. So um um that does uh make the forecasted balance um
go down somewhat. And then we've had uh of course we have to restrict some of that money too. Um so we've restricted um 8 uh 8.8 million or so for the plan use of fund balance. That's uh that's um that's in the 2026 budget. So, we have
to reserve that money for uh to cover that. Then we also have some public safety aid and then 3 million or so for the North Commons Park. So, that's about 14 million. Now, since then, there's been some more um uh budget amendments done that we think add about 1.5 million
more um that were restricting money for that. So, given all that, you know, I show you look, you compare it to our target of 109 million. So on this slide, you know, as of October, we thought it was going to be about 9 and a half million. We're probably down to about 5 million right now or so. Um maybe a
little bit over that. So that's kind of where we're trending. Obviously, as Rob um says, we haven't closed the books yet. Um I will say the if you look at the third bullet point about the rollovers um we uh as of right now um we
have uh you'll ask the departments not to submit any rollover requests for the general fund um which would mean that they'd have to use their 2026 budget to complete anything from the 2025 budget or so. So just wanted to point that out. we feel we got to reserve anything and
everything that's left um just to cover potential overruns in 2026. So anyway, moving on to the special revenue funds. Um these are these are funds that are generally um restricted funds
um from certain um ex external funding sources. They generally have like state restrictions or things on them. Uh some of our most significant ones are the downtown assets, the convention center, target center. Um uh neighborhood and community relations has some restricted funds. Um our grants are are restricted
of course either by the federal government or the state or any other private foundations. Uh CPED has a has a uh special revenue funds as well too. Um so anyway, um we project that the fund balance will go down about 3 million or
so. um which isn't which is up from our second quarter forecast mainly because of CPED in the arenas. And then the cash balance kind of follows the same pattern. That's about a $4 million decrease which is up from what we said in the second quarter. Again, mainly due
to CPEND and the in the downtown assets. Um otherwise, um like I said before, these are generally restricted and so we have to keep them in their own fund uh separated from the general fund. And then just looking at the the the the
figures for the for the the cash and fund balances, I tend to look at the column on the right there. You can see the convention center forecasting the balances go down a couple million as well as the downtown asset funds. And then you see CPAD at the bottom is
projected to go up. So that kind of offsets that. But overall, um we're spending those down a little bit. Moving on to the internal service funds. Uh this family of funds is um primarily used to fund areas in the city or departments in the city that sell their
services to other other departments in the city as opposed to the general public. Uh that includes our uh engineering materials and testing lab, fleet, property services, our stores, our IT, self- insurance as well too. So you can see in this case um our net
position at the end of the year we're projected to uh be about 21 million more than 24. Um again that's mainly due to um to uh self insurance. Um cash is also projected to uh go up about that much as
well too although most of the funds are going down that we'll see on the next slide there. >> Excuse me. Hard grove. Uh Commissioner Payne. >> Oh yeah. >> Thank you President. Uh thank you. Uh I I just had a question about the internal
service charges. Uh is is how frequently are we updating the cost allocation model or do we have a update to that planned in any time in the near future? >> Uh yeah, President Brandt, uh Commissioner Payne, uh yes, we are actually updating those right now. We do
it once a year. Um so we're updating it for 2027 right now. So we're working on new numbers for that. So then uh would the would that be finalized like by December or is it usually a little bit earlier?
>> Oh yeah. Yeah. Uh President Brandt uh Commissioner Payne. Yes. It's it's it's generally quite a bit earlier than that. We we we work on that. That's really the first step of the budget process because we have to um be able to inform the departments what they're going to get charged. So they have to go first. Yeah. So we expect to have that finalized
probably by early April or so. >> Okay. Great. Thank you. Uh, excuse me. We have Commissioner um Eric, Commissioner Bernstein, >> Commissioner Eric Works. Um, just a question on the internal service funds. I just want to make sure I'm understanding it correctly. So, the net
position improved in the self-insurance fund, but I think elsewhere in the report I also read that liabilities had increased. So is it correct to say that uh we covered the increase in liabilities with more like sufficient that the overall net position improved
despite the increase in liabilities? So it's two things moving at once and then the net is to improve the position. Is that right? >> Yeah. President Brandt, Commissioner Bernstein, I I'll have to check on that. We usually we we we calculate our liabilities each year.
>> Okay. So I think we we're in process of doing that right now um for um you know for the year end of 2025 but we don't have that you know quite figured out yet or anything. It's part of our year end uh process here. So I'd have to I I can definitely if we do the fourth quarter I
can definitely comment more on that. >> Okay. >> Yeah. >> Thank you. So anyway, um as far as just looking at the details, um um as I mentioned, you know, if you look on the right column, um almost all the internal service funds are going down a little bit. The intergovernmental services, which is
mainly IT, um certainly um going we projected going down about $5 million or so, but then um self- insurance, the net positions um going up about 27 million or so. That's our projection for the end of the year. And then finally, our
enterprise funds. Uh these are funds that are used to uh to keep track of um departments that generally sell their services or uh goods to the outside to the outside customers. Uh so that includes mainly these are almost all from public works our sanitary sewer
area, storm water area or water utility uh solid waste recycling the parking and then CPID has a real small enterprise fund. Um so for those ones uh they're generally very healthy. Um we can see that the net position has increased
about 34 million. That's our projection from 2024 to 2025 year end. And then the cash um similarly we project to increase about 35 million or so. >> Excuse me, Mr. Hardgrove. Um we are in the process of losing our quorum. Uh
which means I need to adjourn the meeting. However, I'm willing to stick around and hear the rest of your presentation after we've adjourned and uh I invite any other members of the board to stick around as well. So, um
uh since we have lost a quorum, we are considered adjourned. All right. Thank you. Proceed. Oh, >> okay. President Brandt. Yeah. Um >> Okay. Wait until the broadcast is gone. Okay.
which will make it hard to do your presentation, right? >> For the folks at home. >> Yeah. >> Um yeah, know we're just about done. Um too, yeah, like I was saying, the cash balance is um projected to increase about 35 million and this is the last slide of the presentation. You can see
the the the sewer and the storm water certainly leading the pack here. Um they're continue to build uh reserves. Um certainly our our uh water department as well too. Um they have several projects on the horizon there. um parking um has increased their their net
position and their cash is increasing you know closer to the target and solid waste is a slight uh decrease as well too and then our smaller fund uh in CPED um is pretty much holding steady. So again the the enterprise