WEBVTT METADATA Video-Count: 1 Video-1: youtube.com/watch?v=ngRpmmwA2rg Part: 1 1 00:00:17.983 --> 00:00:34.433 >> GOOD AFTERNOON. MY NAME IS AISHA CHUGHTAI AND I'M THE CHAIR OF THE BUDGET COMMITTEE. I'M GOING TO CALL TO ORDER OUR REGULAR MEETING FOR MONDAY, JUNE 8TH, 2026. BEFORE WE BEGIN THE MEETING I WANT TO OFFER A FRIENDLY REMINDER TO ALL MEMBERS, STAFF AND THE PUBLIC THAT THESE MEETINGS ARE 2 00:00:34.433 --> 00:00:50.416 BROADCAST LIVE TO UNAENABLE GRER PUBLIC PARTICIPATION. THESE BROADCASTS INCLUDE REALTIME CAPTIONING ZAS A FURTHER MEETIN. THEREFORE, ALL SPEAKERS NEED TO BE MINDFUL OF THE RATE OF THAT I SHALL SPEECH SO THAT OUR 3 00:00:50.416 --> 00:00:58.983 CAPTIONERS CAN FULLY CAPTURE AND TRANRIBE ALL COMMENTS FOR THE BROADCAST. AT THIS TIME I'LL ASK THE CLERK TO CALL THE ROLL TO VERIFY THE PRESENCE OF A QUORUM. 4 00:00:58.983 --> 00:01:28.283 (ROLL CALL.) >> THE CLERK: THERE IS 11 5 00:01:28.283 --> 00:01:44.316 MEMBERS PRESENT. >> LET THE RECORD REFLECT THAT WE HAVE A QUORUM. I WILL ALSO REMIND MY COLLEAGUES THAT WE ARE USING SPEAKER MANAGEMENT TODAY SO PLEASE MAKE SURE TO SIGN IN. COLLEAGUES, THE AGENDA FOR TODAY'S MEETING IS BORE US. I HAVE ONE WALK-ON BY A REQUEST 6 00:01:44.316 --> 00:01:59.983 FROM STAFF BY INTERIM DEPUTY OFFICERS TO ATTEND THE DRIVE 202 OF POLICY SUMMIT AND CITY ACCELERATOR COHORT MEETINGS. YOU HAVE A COPY OF THE RCA IN FRONT OF YOU, AND STAFFRE ALSO AVAILABLE TO ANSWER QUESTIONS. 7 00:01:59.983 --> 00:02:15.050 L MOVE TO ADD THIS AS PART . ARE THERE ANY QUESTIONS OR ANY OTHER AMENDMENTS RELATED TO THE AGENDA? I'LL NOTE THAT WE'VE BEEN JOINED BY COUNCIL MEMBER CHOWDHURY AS WELL. WITH THAT MAY I HAVE A 8 00:02:15.050 --> 00:02:32.816 MOTION TO ADOPT THE AGENDA AS REVISED. >> SO MOVED. >> SECON >> ALL THOSE IN FAVOR PLEASE SIGNIFY BY SAYING AYE. NAYS OR ABSTENTIONS. THE AYES HAVE THE AND THAT MOTION CARRIES. 9 00:02:32.816 --> 00:02:50.316 THE ONE ITEM IS THE GIFT ACCEPTANCE FOR INTER DEPUTY CITY OPERATIONS OFFICER KATIE TOPINKA. I'LL MOVE APPROVAL OF THIS ITEM. IS THERE ANY DISCUSSION? I'LL RECOGNIZE COUNCIL MEMBER WONSLEY? >> HEY,HAIR. OH, SORRY, NEVER 10 00:02:50.316 --> 00:03:08.550 MIND. ACTUALLY, NEVER MIND. >> SOUNDS GOOD. SEEING NO FURTHER DISCUSSION ON THE CONSENT ITEM, ON THE MOTION TO APPROVE, PLEASE ALL THOSE IN FAVOR PLEASE SIGNIFY BY SAYING AYE. >> AYE. >> THOSE OPPOSED SAY NAY. ANY 11 00:03:08.550 --> 00:03:25.783 ABSTENTIONS? THE AYES HAVET AND THAT MOTION CARRIES. OUR NEXT ITEM IS DISCUSSION ITEM NO. 1 ON OUR PRINTED AGENDA WHICH APPROVES A STAFF DIRECTION TO RESEARCH A POTENTIAL PAYMENT IN LIEU OF TAXES OR PILOT PROGRAM. I'LL ASK 12 00:03:25.783 --> 00:03:42.250 COUNCIL MEMBER WONSLEY TO SPEAK THIS ITEM AND MOVE APPROVAL. >> THANK YOU, CHAIR CHUGHTAI. SO MANY OF YOU ARE AWARE THAT EARLIER THIS YEARHE COUNCIL AND THE BOARD OF ESTIMATES AND TAXATION RECEIVED A PRETTY ELABORATE REPORT IN PRESENTATION 13 00:03:42.250 --> 00:03:56.216 REGARDING POTENTIAL WAYS IN WHICH THE CITY COULD INCREASE REVENUE AND THE REPORT WAS NOT ONLY EXTENSIVE BUT IT HIGHLIGHTED SPECIFICALLY THAT WHEN COMPARED TO OUR PEERS 14 00:03:56.216 --> 00:04:13.316 MINNEAPOLIS GENERATES LESS REVENUE PER CAPITA. ND ALSO HIGHLIGHTED SOMETHING WE ALREADY KNOW AND WE'LL RECEIVE A PRESENTATION COVERING THAT IN A BIT BUT THAT O CITY IS HEAVILY DEPENDENT ON PROPERTY TAXES WHICH INDICAS WE DO HAVE THE OPPORTUNITY AND THE NECESSARY 15 00:04:13.316 --> 00:04:29.316 OPPORTUNITY TO DIVE DIVERSIFY H GENERATE AND RECEIVE REVENUE. THAT REPORT ALSO PROVIDED A NUMBER OF RECOMMENDATIONS IN WHICH WE COULD PURSUE TO AGAIN PURSUE REVENUE GENERATION. SOME OF THOSE CHANGES WILL REQUIRE STATE LEVEL ACTIONS AND WILL 16 00:04:29.316 --> 00:04:45.316 TAKE MORE TIME BUT THERE ARE SOME STRATEGIES THAT WILL ALLOW US TO MOVE FORWARD INDEPENDENT AND ONE OF THOSE RECOMMENDATIONS CALLED PILOT WHICH IS VOLUNTARY PAYMENT ILIEU OF TAXES AND 17 00:04:45.316 --> 00:05:00.783 THIS PARTICULAR RENUE OPTION WILL ALLOW THE CITY TO INCREASE REVENUES AND FOCUS ON ENTITIES THAT RECEIVE A SIGNIFICANT AMOUNT OF CITY RESOURCES BUT DO NOT PAY PROPERTY TES. THE REPORT ALSO HIGHLIGHTED 18 00:05:00.783 --> 00:05:16.716 IN TERMS OF HOW MUCH ARE THEN COULD BE GENERATED FROM THIS PROGRAM. IT SHOWED THAT ESTIMATE HIGHLIGHTED WE COULD COLLECT BETWEEN $10 MILLION TO $19 MILLION AND, AGAIN, IN THE PRESENTATION THAT WE'RE ABOUT TO RECEIVE IS VERY CLEAR THAT WE KNOW THAT WE HAVE A PRECARIOUS 19 00:05:16.716 --> 00:05:33.483 STATE OF OUR CITY FINANCIAL WELL-BEING AND IT'S PLACING UNSUSTAINABLE BURDEN ON MOST OF OUR WORKING CLASS RESIDENTS' SHOULDERS AND IT'S THAT SOBERING REALITY THAT SHOULD IMPLORE ALL OF US TO SERIOUSLY LOOK AT HOW WE CAN IMPLEMENT A MULTITUDE OF INITIATIVES THAT WILL HELP OUR 20 00:05:33.483 --> 00:05:50.266 CITY RAISE SIGNIFICANT FUNDS AND REVENUE IN A SUSTAINABLE AND EQUITABLE WAY AND PILOT COULD BE IS HAVE THOSE TOOLS THAT WE COULD POTENTIALLY USE AND IT GIVES US MORE CLARITY ON THE TYPE OF POTENTIAL ORGANIZATIONS OR INSTITUTIONS THAT COULD 21 00:05:50.266 --> 00:06:06.466 PARTICIPATE IN A PILOT PROGRAM AND PROVIDE CRUCIAL INFORMATION WE WOULD NEED IF WE OPTED TO IMPLEMENT IT. SO WITH THAT, I LOOK FORWAR TO GETTING MORE INFORMATION WHEN THIS GETS BACK AND WORKING WITH MY COLLEAGUES ON NT STEPS. WITH THAT I WILL MOTION THIS ITEM FOR APPROVAL. 22 00:06:06.466 --> 00:06:24.200 >> PROMOTION BEFORE US IS THERE ANY FURTHER DISCUSSION ON THIS ITEM? I WILL RECOGNIZE COUNCIL MEMBER RAINVILLE >> THANK YOU, CHAIR. UNCIL MEMBER WONSLEY, JUST OFF THE TOPPED IT HAPPENED OF YOUR 23 00:06:24.200 --> 00:06:40.350 HEAD WHAT TYPE OF ORGANIZATIONS DO YOU THINK THIS MIGHT HIGHLIGHT TO US? DO YOU HAVE ANY IDEA? >> YES, SO -- >> COUNCIL MEMBER WONSLEY WOULD YOU LIKE TO ADDRESS THAT. >> YES, I'M MORE THAN HAPPY TO. COUNCIL MEMBER RAINVILLE, I'M JUST LOOKI UP THE REPORT 24 00:06:40.350 --> 00:06:58.900 MADE BY GUY HOUSE INSTSTED RECE THAT SOME ORGANIZATIONS THAT COULD PARTICIPATE. THEY HIGHLIGHT -- IT COULD BE HIGHER ED INSTITUTIONS, HEALTHCARE INSTITUTIONS, MEDICAL AND CULTURAL SECTORS. THEY HAVE 25 00:06:58.900 --> 00:07:15.383 A WHOLE ELABORATE DEFINITION OF WHAT PROGRAMS COULD QUALIFY UNDER IT IN THAT 32-PAGE REPORT. >> GREAT, THANK YOU VERY MUCH. >> WONDERFUL. I'LL NEXT RECOGNIZE COUNCIL MEMBER WARREN. >> THANK YOU, CHAIR. 26 00:07:15.383 --> 00:07:33.816 MAY I ALSO ASK ANOTHER QUESTION BECAUSE I KNOW THIS IS A STAFF DIRECTIVE SO IT'S NOTHING THAT WILL TAKE NECESSARILY DIRECT IMPACT OR WHAT HAVE YOU. BUT THIS -- I MEAN, IF WE'RE LOOKING AT HIGHER 27 00:07:33.816 --> 00:07:51.950 EDUCATION INSTITUTIONS AND THINGS LIKE THAT, I'M THINKING ABOUT THE LOWER TO MODERATE INCREASED FAMILIES TT ARE PAYING INTO THOSE INSTITUTIONS AND WHAT THAT MAY POSSIBLY DO FOR THE FEES THAT FAMILIES ARE PAYING TO HAVE THEIR CHILDREN TO 28 00:07:51.950 --> 00:08:06.650 ATTEND THESE DIFFERENT EDUCATION INSTITUTIONS OR WHAT THAT DOES TO -- TO THE PEOPLE THAT ARE -- THAT ARE EAGER TO, YOU KNOW, -- IF YOU HAVE A STUDENT THAT'S ATTENDING THE UNIVERSITY OF MINNESOTA AND THE FAMILY IS 29 00:08:06.650 --> 00:08:24.350 ALREADY, U KNOW, STRUGGLING TO PAY THAT TUITION, I KNOW I JUST DID IT WITH WHY SON GRADUATING, DOES IT CHANGE THE COSTS WITH THESE INCREASES OF TAXES THAT COMES DOWN TO THESE INSTITUTIONS 30 00:08:24.350 --> 00:08:40.916 OR WHAT DOES THAT LOOK LIKE? >> COUNCIL MEMBER WONSLEY, WOULD YOU LIKE TO ADDRESS THAT? >> YES, I WOULD. COUNCIL MEMBER WARREN WANTING TO EMPHASIZE THIS IS A VOLUNTARILY PROGRAM SO ANY DEPARTMENT OR PROGRAM WANTS TO PARTICIPATE 31 00:08:40.916 --> 00:08:57.216 THEY'RE DOING IT UNDER THEIR OWN VOTATION AND THIS IS NOT A NEW TAX. IT'S ESSENTIALLY -- WE ALREADY PROVIDE SERVICES TO MANY OF THESE INSTITUTIONS BUT WE DON'T RECEIVE REVENUE BECAUSE THEY DON'T PAY PROPERTY TAXES SO 32 00:08:57.216 --> 00:09:13.283 THIS IS GETTING A SENSE WHATRE THOSE SERVES? WHAT WOULD BE THE FISCAL AMOUNT TO THEM IF WE ACTUALLY CHARGED SOME OF THESE INSTITUTIONS BUT I THINK IT'S IMPORTANT TO HIGHLIGHT THAT. IN THE REPORT. IT DOES SAY WE NEED TO DO FURTHER ANALYSIS. THIS IS WHAT THE LEGISLATIVE MOTION 33 00:09:13.283 --> 00:09:31.116 INTENDS TO DO. THIS IS SIMPLE VONTARY HE HAVE -- SIMPLY VOLUNTARY OF A PROGRAM IT WOULD NOT BE LEVERAGED AS A NEW TAX AS A RESULT OF THAT. IN THE REPORT IT DOES TALK ABOUT UNIVSITY OF MINNESOTA AND THE UNIVERSITY OF BOSTON AS AN EXAMPLE WHERE THIS H BEEN EFFECTIVE SO I WOULD ENCOURAGE 34 00:09:31.116 --> 00:09:47.283 TO ALSO CHECK THAT AS AN OPTION. >> OKAY, THANK YOU FOR THAT. >> THANK YOU, SEEING NO FURTHER DISCUSSION ON THE MOTION TO APPROVAL THIS ITEM, ALL THOSE IN FAVOR PLEASEIGNIFY BY SAYING AYE. >> AYE. >> THOSE OPPOSED SAY NAY. ANY 35 00:09:47.283 --> 00:10:02.816 ABSTENTIONS? THE AYES HAVE IT AND THAT MOTION CARRIES. NEXT -- OUR NEXT ITEM IS A REPORT REGARDING THE ESTIMATED REVENUES AND EXPENDITURES FOR THE 2027-2028 BUDGET. WE WILL HAVE A PRESENTATION FROM THE 36 00:10:02.816 --> 00:10:18.450 BUDGET DEPARTMENT. I WILL INVITE BUDGET MANAGER JUSTIN KARLSON TO JOIN US AND BEGIN THIS PRESENTATION. WELCOME MR. KARLSON. >> GOOD AFTERNOON, CHAIR CHUG, MY NAME IS JUSTIN KARLSON I'LL THE BUDGET MAGER IN THE PROPERTY AND SERVICES 37 00:10:18.450 --> 00:10:36.450 DEPARTMENT. I'M JOINED TODAY B JANE ANTHE BUDGET ANALYST HERE WE'RE HERE TO PRESENTN THE 2027-2028 BUDGET CALCULATIONS. I'DMENTS LE TO TAKE THIS OPPORTUNITY TO THANK THE BUDGET 38 00:10:36.450 --> 00:10:54.283 TEAM WHO JOINS US TODAY. LIAM, DANIEL, BETHLEHEM AND MARGO WITH THEIR TIRELESS EFFORTS ON TOP OF IMPLEMENT AGNEW BUDGET SOFTWARE PLATFORM CLEAR GOV IT'S BEEN A VE BUSY TEAM AND I'M GRATEFUL FOR ALL OF THEIR GREAT WORK. 39 00:10:54.283 --> 00:11:11.300 I'M ALS PLEASED TO INTRODUCE THE CITY'S NEW BUDGET OFFICER SHA GREEN. SHANE WAS MOST RECENTLY LEADING THE SPACE INTELLIGENCE AGENCY IN WASHINGTON, DC. I KNOW I AND TH REST OF THE BUDGET TEAM ARE VERY GRATEFUL TO SHARE HIS 40 00:11:11.300 --> 00:11:28.350 EXPERTISE AND LEAD OUR TEAM. HE JUST FINISHED WEEK 1 HERE AT THE CITY AND I KNOW H LOOKS FORWARD TO PRESENTING TO YOU ALL IN E NEAR FUTURE. THIS PRESENTATION COVERS THE ESTIMATED REVENUES AND EXPENSES FOR NEXT YEAR'S START TO THE BIENNIAL BUDGET WHICH INCLUDES THE '27 BUDGET WHICH 41 00:11:28.350 --> 00:11:42.733 WILL BE ADOPTED THIS DECEMBER AS WELL AS A PLAN FOR 2028 WHICH WILL FORM THE STARTING POINT FOR THE 2028 BUDGET PROCESS. THE CSL CALCULATIO IS AN IMPORTANT REFERENCING POINT IT REQUIRED BY FINANCIAL POLICIES -- 42 00:11:42.733 --> 00:12:00.316 >> MR. KARLSON, DO YOU HAVE A PRESENTATION -- >> WE DO. >> I'M GETTING TO THE AGENDA HERE. YEP IT'S REQUIRED BY SAFE FINANCIAL POLICIES IN THE CHARTER TO SHOW REVENUES AND EXPENSES WHERE POLICYMAKERS TO TAKE NO ACTION TO INCREASE OR DECREASE THE BUDGET. THIS PREFENCE WILL ALSO BE GIVEN TO 43 00:12:00.316 --> 00:12:17.366 THE BOARD OF ESTIMATE AND TAXATION LATER THIS WEEK ON WEDNESDAY. SO TO THE CHAIR'S POINT THIS IS A BRIEF WALK-THROUGH ON THE AGENDA AND . SO WE WANT TO TAKE YOU THROUGH THE BUDGET BUILDING BLOCKS SO THAT YOU UNDERSTAND THE JOURNEY OF THE BUDGET PROCESS FROM DECEMBER 2026 TO 44 00:12:17.366 --> 00:12:31.816 NOW. WE WILL REVIEW EXPENSE DRIVERS AND WHY WE'RE SEEING THE NUMBERS THAT WE'RE SEEING SPECIFICALLY WITHIN THE GENERAL FUND. WE'LL CLOSE THINGS O WITH A REVENUE FORECAST AND NEXT STEPS IN THE BUDGETING PROCESS. WHILE THIS IS A TECHNICAL PRESENTATION, NARROWLY FOCUSED 45 00:12:31.816 --> 00:12:49.066 ON THE 2027 AND 2028 CSL. YOU CAN EXPECT TO HEAR MORE INFORMATION ONEPARTMENT PROGRAMS AS PART OF THE BUDGET COMMITTEE'S WORK LATER THIS FALL. THROUGHOUT THESE SLID YOU'LL SEE BAR CHARITIES ON PRIOR YEAR SPENDING AS WELL AS PROJECTIONS. HISTORICAL ACTUALS 46 00:12:49.066 --> 00:13:07.450 ARE INCLUDED IN THE ACTIONS BUT NOT THE FOCUS OF OUR PRESENTATION THIS IS A FORWARD-LOOKING DISCUSSION AS WE MOVE THROUGH THE 2027 BUDGET PROCESS. I'LL PASS IT OVER TO DEPUTY CITY FINANCIAL OFFICER WHO'S GOING TO TOUCH ON SOME KEY FINANCIAL TAKE-AWAYS. 47 00:13:07.450 --> 00:13:26.150 >> GOOD AFTERNOON, JANE, DEPUTY CFO. WITH MANY DECISION POINTS TO COME IN THIS BUDGET PROCESS, THIS PRESENTATION IS ONE STOP ALONG THE WAY TO A BALANCE SHEET IN AUGUST. -- BALANCES BUDGET. FINANCE WILL BE WORKING THIS SUMMER TO REFINE THE DATA YOU'RE 48 00:13:26.150 --> 00:13:43.233 SEEING TODAY AND ANY OTHER RECOMMENDATIONS BEFORE TRANSMITTING THAT BUDGET TO ALL OF YOU. TODAY'S PRESENTATION DOES NOT INCLUDE ANY NEW DECISIONS SO THIS IS A TRANSPARENCY MEASURE INDICATING A STARTING POINT BEFORE POLICYMAKER INPUT. AND IT'S IMPORTANT TO FREE 49 00:13:43.233 --> 00:13:59.366 PROVIDE SOME GUARDRAILS AROUND THIS INFORMATIONAL. AS IS TYPI YEAR NOT ALL FUNDS ARE COMPLETED. NOTABLY OUR CAPITAL BUDGET WHICH CONSTITUTES HUNDREDS OF MILLIONS OF DOLLARS IS STILL UNDER COMMITTEE REVIEW SO YOU WILL NOTICE THAT EXCLUSION OF THAT FUND FROM THE 50 00:13:59.366 --> 00:14:14.700 OVERALL DATA. IT WILL BE ADDED IN THE AUGUST RECOMMENDED BUDGET ALONG WITH OUR ENTERPRISE FUNDS AS WELL SO AGAIN WE CONTINUE TO REFINE ALL OF THAT DATA IS STAKEHOLDERS ACROSS THE ENTERPRISE. TODAY WE SHOULD THINK OF THESE NUMBERS WE'RE 51 00:14:14.700 --> 00:14:32.200 PROVIDING TO YOU AS ESTIMATES AND NOTICE THERE'S A FOCUS ON THE GENERAL FUND. AS JUSTIN MENTIONED IT HAS IMPACTED OUR WORK THIS PAST SPRING INCLUDING OUR TIMELINES FOR ANALYZING THE DATA WE'VE PRESENTED SO AS ALWAYS WE'LL CONTINUE TO REFINE THROUGHOUT 52 00:14:32.200 --> 00:14:47.100 SUMMER. SO FAR, THOUGH, WHEN WE LOOK AT ALL FUNDS WE ARE SEEING MODEST INCREASES IN BOTH REVENUES AND EXPENDITURES. IF WE LOOK AT ALL FUNDS, EXPENSES ARE INCREASING ABOUT 3.1% WHILE 53 00:14:47.100 --> 00:15:05.433 REVENUES ARE INCREASING AT ABOUT 2.6%. AS WE NARROW DOWN INTO THE GENERAL FUND WE SEE A SHARPER CONTRAST WITH THE SAME TREND. EXPENSES IN THE GENERAL FUND ARE INCREASING AT A RATE OF 5.1% WITH GENERAL FUND REVENUES ONLY INCREASING AT 1.9%. AND THAT 54 00:15:05.433 --> 00:15:21.300 DOES NOT REFLECT ANY UPDATE TO THE PROPERTY TAX LEVY. IT IS TYPICAL AT THIS POINT IN THE YEAR TO SHOW A GAP BETWEEN EXPENSES AND REVENUES. DUE TO THE NATURE OF THE CURRENT SERVICE LEVEL METHODOLOGY, OUR 55 00:15:21.300 --> 00:15:35.366 EXPENSES IN MANY CATEGORIES GROW FROM ONE YEAR TO THE NEXT BUT OUR REVENUES DO NOT INFLATE IN THE SAME MANNER. SO THIS YEAR WE ENTERED DECISION-MAKING WITH AN ESTIMATED GAP BETWEEN EXPENSES AND REVENUES OF BETWEEN MID-20S AND 33 MAIN LANES -- 28 56 00:15:35.366 --> 00:15:53.300 AND $33 MILLION. THAT BECOMES A PROBLEM TO SOLVE THROUGHOUT THE MAYOR'S BUDGET PROCESSING WITH OTHER FUNDING NEEDS. AGAIN THIS PROBLEM WILL BE ADDRESSED WITH A BALANCED BUDGET RECOMMENDATION TO THIS BODY IN AUGUST. THE REFORECASTING PROCESS 57 00:15:53.300 --> 00:16:09.000 WHICH BEGAN IN JANUARY REVEALED COST INCREASES IN SEVERAL CATEGORIES WHICH WILL ALL BE EXPLORED IN FUTURE SLIDES. IN SHORT, THOUGH, THE COST OF PROVIDING INTERNAL SERVICES TO ALL CITY DEPARTMENTS IS IMPACTED BY BROADER ECONOMIC FACTORS SO WE ARE EXPERIENCING INCREASES 58 00:16:09.000 --> 00:16:25.433 ACROSS OUR INTERNAL SERVICE FUNDS. AND THAT'S DRIVEN PRIMARILY BY INFLATIONARY IMPACTS ON FUEL, UTILITIES, PART SUPPLIES AND MAINTENANCE COSTS. IT'S ALSO IMPORTANT TO NOTE THAT THE CITY'S FUND BALANCE DECLINE, WHICH YOU'VE HEARD 59 00:16:25.433 --> 00:16:40.100 ABOUT FROM THE CITY CONTROLLER HAS AN IMPACT ON FUTURE REVENUES SO AS WE HAVE FEWER DOLLARS IN OUR ACCOUNTS WE ARE GENERATING LESS INTEREST FOR THE CITY. WE ARE FORECASTING REDUCED FORECAST EARNINGS WHICH EQUATE 1 POINT ON 60 00:16:40.100 --> 00:16:57.200 THE PROPERTY TAX LEVY. AS NOTED, THIS PRESENTATION IS LARGELY FOCUSED ON THE GENERAL FUND, HOWEVER, THERE ARE MANY LEVEES THAT COMPRISE THE OVERALL PROPERTY TAX LEVY THAT WE DISCUSSED AND THAT THE CITY ADOPTS IN DECEMBER EVERY YEAR SO THIS SLIDE IS MEANT TO SHOW YOU 61 00:16:57.200 --> 00:17:14.366 ALL OF THOSE LEVEES THAT COMBINED TO THE OVERALL PROPERTY TAX LEVY AND THIS IS WITH NO CHANGES AS ADOPTED IN DECEMBER OF LAST YEAR. WE ARE MOST OFTEN REFERENCING THAT TOTAL PROPERTY TAX LEVY LINE AT THE BOTTOM OF THAT THIS TABLE BUT YOU CAN SEE AT THE ORANGE ARROW AT THE TOP 62 00:17:14.366 --> 00:17:30.400 IS THE GENERAL FUND PORTION OF THAT LEVY. THERE ARE ALSO LEVEES FOR THE PARK BOARD AND THE BET IN THIS TABLE AMONG OTHERS. SO THE LEVY REPRESENTS THE PERCENT CHANGE IN THE DOLLARS COLLECTED FROM ONE YEAR TO THE NEXT. IN SHORT, HOW MUCH MORE 63 00:17:30.400 --> 00:17:46.366 MONEY DOES THE CITY NEED TO BRING IN FROM THE PRIOR YEAR. WE ANTICIPATE MANY INCREASES TO OUR EXPENSES YEAR-TO-YEAR. AND THOSE ARE REFLECTED IN IN THIS TABLE. WE PLAN ON CONSISTENT PAY RAISES FOR OUR PERSONNEL TO KEEP UP WITH STEPS, COLAS AND BARGAINING 64 00:17:46.366 --> 00:18:01.833 UNIT NEGOTIATIONS. WE PLAN ON HEALTH INSURANCE BECOMING MORE EXPENSIVE YEAR-TO-YEAR. AND WE ALSO ASSUME SOME INFLATION IN OUR INTERNAL SERVICE CHARGES. SO AS YOU CAN SEE, WE HAVE ALREADY PLANNED FOR THE MACROPROPERTY T 65 00:18:01.833 --> 00:18:18.100 LEVY BY 4.5% IN IT 20 BE 27 BUT WE KNOW WE HAVE TO REVISIT OUR ASSUMPTIONS ANNUALLY TO MAKE SURE THAT WE HAVE OF CAPTURED ANY CHANGES THAT NEED TO BE MADE SO THAT IS THE OBJECTIVE OF THIS PRESENTATION. INFORMING OF YOU OF THOSE CHANGES THAT YOU UNDERSTAND TO THE UPDATES OF THE COST DRIVERS AND OUR REVENUES 66 00:18:18.100 --> 00:18:32.666 AND HOW IT MIGHT IMPACT YOUR FUTURE DECISION-MAKING. AS WE TALK ABOUT THE GENERAL FUND, THIS SLIDE GIVES YOU A SENSE OF THE SCALE OF GENERAL FUND AS IT RELATES TO OTHER FUNDS SO THE GENERAL FUND IS THE BLUE PORTION THERE. SO 67 00:18:32.666 --> 00:18:49.966 WE'RE LOOKING AT $744 MILLION OR ABOUT 40% OF THE OVERALL BUDGET AS WE'VE CALCULATED IT THUS FAR. THE GENERAL FUND IS THE FOCUS BECAUSE IT IS PREDOMINATELY PROPERTY TAX SUPPORTED AND FUND DESCRIPTIONS FOR THE OTHER AREAS ARE INCLUDED IN THE BUDGET BOOKS AS WELL AS 68 00:18:49.966 --> 00:19:09.300 THE QUARTERLY FINANCIAL REPORTS AND IF YOU NEED HELP UNDERSTANDING OR NAVIGATING ANY OF THOSE, PLEASE JUST REACH OUT TO FINANCE. THIS SLIDE GIVES ONLY A INDITION OF OUR RELIANCE ON PROPERTY TAXES OVER THE YEARS. SO WE'VEROKEN OUT OUR GENERAL FUND REVENUE IN THIS VISUAL TO 3 69 00:19:09.300 --> 00:19:27.133 CATEGORIES THE BLUE LINE ON THE TOP REPRESENTS PROPERTY TAXES. BELOW IT IS E RED LINE FOR NONLEVIED REINS SO THINGS LIKE FINES AND FEES. GREEN SHOWS INTERGOVERNMENTAL REVENUES LIKE LOCAL GOVERNMENT AID. SO AS YOU CAN SEE HERE, THE 70 00:19:27.133 --> 00:19:44.266 RED AND GREEN LINES HAVE REMAINED RELATIVELY STAGNANT. AS EXPSES INCREASE, THAT MEANS THAT A GREATER SHAVER THOSE COSTS ARE BEING SHOULDERED BY T 71 00:19:44.266 --> 00:20:00.233 WHILE WE'RE NOT TALKING ABOUT THE CAPITAL IMPROVEMENT PROGRAM TODAY, IT IS AN IMPORTANT PART OF THE CITY'S BUDGET AND IS THE -- THE FUNCTION WITHIN OUR BUDGET THAT HAS THE MOST PUBLIC ENGAGEMENT. SO OUR CAPITAL LONG-RANGE IMPROVEMENT COMMITTEE DOES 72 00:20:00.233 --> 00:20:16.766 REALLY COMMENT WORK VETTING THE CAPITAL BUDGET REQUESTS WITH CITY PARK BOARD AND THE MBC. THAT WORK IS ONGOING SO WHAT WE'RE SHOWING YOU TODAY ISHAT WAS ADOPTED IN DECEMBER OF LAST YEAR. YOU COULD CONSIDER THE 2027 PLANNED COLUMN AS THE CURRENT 73 00:20:16.766 --> 00:20:32.100 SURFACE LEVEL FOR THE CAPITAL BUDGET SO $343 MILLION OF PLANNED CAPITAL SPENDING IS ALREADY INCLUDED IN THE CIP FOR 2027 AND WE HAVE OVER THE 6-YEAR PLAN ABOUT 1.6 BILLION DOLLARS 74 00:20:32.100 --> 00:20:48.666 OF CAPITAL PROJECTS. AND WITH THAT, I WILL TURN THINGS BACK TO JUSTIN. THANK YOU. >> ALLIGHT. SO DIVING INTO THE CSL. I'LL FIRST NOTE THE 75 00:20:48.666 --> 00:21:04.833 CSL DOES NOT BIND THE COUNCIL TO ANY ACTION REGARDING THE BUDGET IN THE FUTURE RATHER IT BUDGET WOULD SIT IF WE MADE NO CHANGES FO 2027. IT INDICATES WHAT THE CITY WOULD HAVE TO SPEND WITH CURRENT LEVELS WITH CURRENT REVENUE ESTIMATES WITH NO AND HE 76 00:21:04.833 --> 00:21:20.433 SAID TOUR GROWTH SUCH AS CHANGING WAGE GROWTH AND INTERNAL PRESSURES ON INTERNAL SERVICE COST OF THE. IT IS A CALCULATION AND BUDGET METHODOLOGY. IT IS NOT A GREAT TOOL FOR RETROACTIVE ANALYSIS BUT RATHER IT PROVIDES A FRAMEWORK FOR WHAT EVENTUALLY BECOMES THE ADOPTED BUDGET FOLLOWING POLICYMAKER DECISIONS 77 00:21:20.433 --> 00:21:37.200 THIS SUMMER AND FALL. AVOID THE THIS BASELINE OF THE CSL IT CAN BE HARD TO TRACE THE IMPACT OF THE DECISIONS Y'A SNAPSHOT IN TIME BUT THE FIGURES DO HELP US BAD THE IMPACT OF POLICY CHOICES ESPECIALLY AROUND THE PROPERTY TAX LEVY. THERE ARE THREE COMPONENTS 78 00:21:37.200 --> 00:21:52.966 THAT MAKE UP THE CSL AS YOU CAN SEE ON THE SLIDE. THESE ARE PERSONNEL, INTERNAL SERVICE CHARGES SUCH AS FLEET, RENT, IT AND GENERAL LIABILITY AS WELL AS NONPERSONNEL. SUCH AS PROFESSIONAL SERVICES IS AND TRAINING AND OFFICE SUPPLIES. 79 00:21:52.966 --> 00:22:09.300 THE NONPERSONNEL BASED BUDGETS ARE HELD FLAT SO THE ONLY ADJUSTMENTS MADE TO THIS COMPONENT IS THE REMOVAL OF ONE-TIME NEW BUDGET PROPOSALS FROM THE PRIOR YOUR THAT ARE NOT APPROPRIATED INTO THE FOLLOWING YEAR. THROUGHOUT YOU'LL SEE THOSE FINANCIAL POLICIES THAT WERE 80 00:22:09.300 --> 00:22:26.683 ADOPTED IN DECEMBER AND WE PROVIDED THOSE TO LOOK IF YOU WOULD LIKE THIS IS ALL BEST PRACTICES OF THE ON THE GFOA AND GENERAL ACCOUNTING PRINCIPLES OR GAP OR STATE CITY ORDINANCES. THIS SLIDE SHOWS YOU THE 81 00:22:26.683 --> 00:22:43.083 ROADMAP IN HOW WE DEVELOPED THE CSL. ON THE FAR LEFT OUR STARTING POINT IS THE 2026 ADOPTED BUDGET. YOU CAN SEE THE THREE EXPENSE COMPONENTS AS WE AS REVENUE FORECASTS WHICH ARE UPDATED AND HIM COME YOU PILED TO COMPLETE THE 2027 CSL. AT THE START OF EACH BIENNIAL 82 00:22:43.083 --> 00:22:59.216 DGET WE HOST A BUDGET KICKOFF WHERE WE PROVIDE A TRAINING ABOUT THE SCIFICS OF THE BUDGET PROCESS AND DISCUSS BUDGET CAPACITY FOR THE NEXT YEAR. TO DEVELOP THE CSL WE ARE RUNNING MANY PROCESSES CONCURRENTLY AS WE UPDATE PERSONNEL, ALLOCATION MODELS, 83 00:22:59.216 --> 00:23:15.316 REVENUE FORECASTS AND WE PLACE A LOT OF DEMAND ON CITY DEPARTMENTS ESPECIALLY THIS YEAR WITH THE IMPLEMENTATION OF CLEAR GOV SO WE'RE GRATEFUL FOR THEIR PARTNERSHIP AND THE TIME IT TAKES TO DEVELOP THE BUDGET. THE PROCESSES ARE GUIDED BY FINANCIAL POLICIES, AGAIN, THAT YOU ALL REVIEW AND ADOPT. 84 00:23:15.316 --> 00:23:30.483 SO LOOKING AT THE GENERAL FUND, OR THE NEXT FEW SLIDES WE'LL BE DIVING INTO A SNAPSHOT OF THE CSL EXPENSE BUDGET F 2027. WHILE THIS IS JUST ONE SIDE OF THE EQUATION IT IS PRUDENT TO UNDERSTAND THE CURRENT COSTS OF THE 2026 ADOPTED BUDGET WHEN ROLLED 85 00:23:30.483 --> 00:23:47.066 FORWARD BEFORE TURNING TO HOW TO FUND THESE EXPENSES. THIS SLIDE IS FOCUSED ON THE GENERAL FUND WHICH IS WHERE A MAJORITY OF OUR PROGRAMS ARE BUDGETED. IT'S HEAVILY FUNDED BY THE PROPERTY TAX AND STRATEGICIC DECISIONS ARE MADE TO GET US TO AN ADOPTED BUDGET 86 00:23:47.066 --> 00:24:03.666 BYECEMBER. IT'S IMPORTANT TO NOTE HERE THAT THIS IS THE COST OF LAST YEAR'S BUDGET TOE DATE IT DOES NOT INCLUDE ANY SPENDING OR REDUCTIONS TO EXISTING PROGRAMS. COLLECTIVELY WE SEE THAT SALARIES AND FRINGE COSTS ARE INCREASING $36 MILLION FROM THE 87 00:24:03.666 --> 00:24:19.800 20 AS OF ADOPTED BUDGET AND INTERNAL SERVICE CHARGES ARE INCREASING 9.2 MILON WITHIN THE GENERAL FUND. POLICY ALLOWS FOR BUDGET FOR PERSONNEL AND INTERNAL SERVICE COSTS WHILE AS I MENTIONED THE NONPERSONNEL OR DISCRETIONARY BASE SHE WOULD FLAT THIS ENSURES THAT 88 00:24:19.800 --> 00:24:35.800 POLICYMAKERS ARE ABLE TO WEIGH . WE'LL NOW TAKE A CLOSER LOOK AT PERSONNEL AND INTERNAL SERVICE CHARGES. THOSE COMPONENTS OF THE CSL STARTING WITH PERSONNEL. WITH OVER 4,000 FTES BUDGET FOR THE CITY PERSONNEL IS A SIGNIFICANT 89 00:24:35.800 --> 00:24:51.833 PORTION OF THE TOTAL CITY OPERATING COSTS. WE WO CLOSELY WITH OUR PARTNERS IN HUMAN RESOURCES AND DEPARTMENTS TO COMPLETE OUR ANNUAL REVIEW OF PERSONNEL EXPENSES IN ACCORDANCE WITH OUR FINANCIAL POLICIES AND BUDGET FTE COUNTS AND SALARIES 90 00:24:51.833 --> 00:25:09.633 FOR EACH POSITION TO PROVIDE A COMPREHENSIVE BUDGET BY BUDGET PLAN THAT DRIVES THAT BUDGET AMOUNT FOR THE FINAL YEAR. LOOKING A POSITIONS WITHIN THE GENERAL FUND SENSATION AND FRINGE EXPENSES HAVE BOTH INCREASED IN THE 2027 FINANCIAL OVER THE 2026. GROWTH FRINGE 91 00:25:09.633 --> 00:25:25.600 EXPENSES IS INCREASING -- WITH GROWING HEALTHCARE EMPLOYER COSTS DRIVEN BY A RISE IN THE COST OF MADAM EDICAL CARE AND W THE STATE'S FAMILY MEDICAL LEAVE PROGRAM. THE CITY HAS SEEN EFFECTIVE MANAGEMENT OF ITS MEDICAL 92 00:25:25.600 --> 00:25:41.900 SELF-INSURANCE FUND WHICH HAS ALLOWED FOR MORE MOD REST GROWTH IN PREMIUM AND THAT FUND REMAINS HEALTHY BUT THIS YEAR WE ARE SEEING A REVERSION TO THE MEAN AS WE JOIN OTHER ENTITIES IN EXPERIENCING GROWING MEDICAL CARE COSTS. THE BUDGET DIVISION PLANS FOR ANNUAL INCREASES AND 93 00:25:41.900 --> 00:25:58.066 PERSONNEL COSTSASED ON GROWTH ASSUMPTIONS THAT WE VISIT ANNUALLY. THE 2027 CSL GENERAL FUND BUDGET WAGES AND FRINGES IS HIGHER THAN PLANNED WITH GROWING MEDICAL CARE COSTS AS WELL AS 94 00:25:58.066 --> 00:26:13.366 ADMINISTRATIVE ADDS AND CLASSIFIED POSITIONS BUDGET INSTITUTE TO INCREASE THE EXPENSE CATEGORY AND PERSONNEL. AND JOB AND CLASS MAINTENANCE STUDIES AS WELL. ADDITIONALLY WE ARE MORE ACCURATELY CALCULATING AND BUDGETING FOR PERSONNEL EXPENSES AS IMPLEMENTING OUREW BUDGETING SOFTWARE HAS ALLOWED 95 00:26:13.366 --> 00:26:29.733 US TO CORRECT FOR KNOWN LIMITATIONS IN OUR PREVIOUS SYSTEM. YOU MAY NOTE BECAUSE THIS SLIDE THOSE 2 YEARS OF HISTORICAL ACTUALS ALONGSIDE THE BUDGET AMOUNTS THERE'S DIFFERENCES OF THE CATEGORIZAON OF EXPENSES WE CURRENTLY BUDGET ALL SALARIES AND WAGES UNDER BASE COMPENSATIONHICH YOU CAN SEE 96 00:26:29.733 --> 00:26:44.833 IN THE BLUE AND THEN AS EMPLOYEES ELECT TO USE VARIOUS LEAVE AND ABSENCE TYP SUCH AS VACATION OR SICK LEAVE THOSE ARE CODED UNDER LEAVE AND ABSENCES CATEGORY. ANOTHER NOTE PER FINANCIAL POLICIES INFLATIONARY GROWTHS 97 00:26:44.833 --> 00:27:00.333 FOR AGREED LIVING ADJUSTMENTS AND STEP BENEFITS ARE ACCOUNTED IN THE BUDGETS AND AN EXCEPTION TO THIS IS OVERTIME. WHICH PER FINANCIAL POLICY 1.5.5 IS NOT INFLATED, AND REQUIRES MAYOR AND COUNCIL APPROV FOR DEPARTMENTS 98 00:27:00.333 --> 00:27:19.100 DEMANDING AN INCREASE IN IT OVERTIME BUDGETS TO PROVIDE RASH SHALL FOR OVERTIME NEEDS. TO DETERMINE HOW ADJUSTED PER CSL WE HAVE A SIMPLE SCENARIO TO WALK THROUGH. IN THIS EXAMPLE A POSITION THAT'S BUDGETED AT A SALARY OF 120,000 WITH 48,000 IN 99 00:27:19.100 --> 00:27:35.866 FRINGE BENEFITS FOR A TOTAL COMPENSATION OF 168,000 IN 2026 COULD EXPERIENCE THE FOLLOWING ADJUSTMENTS WITHIN THE CSL. THE POSITION IS COVERED BY A COLLECTIVE BARGAINING AGREEMENT THAT INCLUDES A COST-OF-LIVING ADSTMENT IN 2027. THE CURRENT 100 00:27:35.866 --> 00:27:52.300 INCUMBENT WILL MOVE FROM STEP 2 TO SP 3 ON THE WAGE SCHEDULE IT HAS LED TO A 8,400 OR 7% INCREASE IN SALARIES FROM 2026 TO 2027. FRINGE BENEFITS DRIVEN BY SALARY INCREASES SUCH AS FICA, MEDICARE, PARA , LONG-TERM DISABILITY, SICK LEAVE, 101 00:27:52.300 --> 00:28:08.566 SEVERANCE AND PAID FAMILY MEDICAL LEAVE GROW PROPORTIONATELY WITH THE INCREASE TO SALARY. IN THIS EXAMPLE HEALTH INSURANCE PREMIUMS THAT ARE PROJECTED TO INCREASE 5 PERCENT AND DENTAL INSURANCE PREMIUMS ARE PROJECTED TO INCREASE 3RD. AND THE RATE -- 3% AND THE RATE 102 00:28:08.566 --> 00:28:24.800 OF MEDICAL LEAVE 4.8% LEADING AN INCREASE IN BUDGET OF FPML IT'S LED TO A 8% INCREASE IN FRINGE TO IT 2026 TO 2027. THIS ANNUAL GROWTH IN SINGLES AND FRINGE HAS LED TO AN INCREASE FOR THE 103 00:28:24.800 --> 00:28:41.400 BUDGET OF THIS POSITION 10,241 OR 6.1% OVERALL. APPLYING THIS INCREASE ACROSS OVER 4,000 BUDGET POSITIONS IS THE MAIN COST OF INCREASED PERSONNEL COST YEAR-OVER-YEAR. A REMINDER THIS IS JUST A SIMPLIFIED EXAMPLE. MANY FACTORS INFLUENCE 104 00:28:41.400 --> 00:28:57.833 THES ADJUSTMENTS. FOR EXAMPLE, IF THE HEALTH INSURANCE PREMIUM IS PROJECTED TO INCREASE 10% INSTEAD OF 5%, THAT WILL DOUBLE THE PREMIUM INCREASES FOR THIS POSITIONO 2,300 AND RAISE THE TOTAL FRINGE GROWTH TO 6.2% YEAR-OVER-YEAR. CHANGES AT THE INDIVIDUAL EMPLOYEE LEVEL CAN 105 00:28:57.833 --> 00:29:14.500 ALSO HAVE AN IMPACT. SUCH AS AN EMPLOYEE WHO CELEBRATES A LIFE EVENT THAT SHIFTED THEM FROM INDIVIDUAL COVERAGE TO FAMILY COVERAGE CAN RESULT IN AN INCREASE OF OVER$16,000 IN THE BUDGET HEALTH INSURANCE COSTS FOR THAT SPECIFIC POSITION OTHER CHANGES MAY LOWER THE BUDGET AMOUNT FOR THE FOLLOWING 106 00:29:14.500 --> 00:29:29.866 YEAR SUCH AS WHEN A TENURED EMPLOYEE WHO IS AT THE TOP STEP OF A WAGE SCHEDULES SEPARATES FROM A CITY AND A NEW EMPLOYEE IS HIRED AT A LOWER STEP. THIS IS ALSO TO NOTE WHILE THERE IS PREDICTABILITY TO ANNUAL CHANGES IN PERSONNEL EXPENSES, THEY'RE 107 00:29:29.866 --> 00:29:46.833 HIGHLY VARIABLE AND CHANGE FREQUENTLY AT THE INDIVIDUAL POSITION LEVEL. FINANCIAL POLICIES GUIDE OUR TEAM TO BUDGETING FOR THESE INCREASES TO ENSURE SUFFICIENT RESOURCES TO COVER KNOWN PERNNEL EXPENSES IN THE FOLLOWING YEAR. SINCE 2023, THE TOTAL 108 00:29:46.833 --> 00:30:06.950 BUDGET FTE COUNT HAS GROWN 270 FTES ACROSS ALL FUNDS AND 176 FTES IN THE GENERAL FUND. WHEN WE LOOK AT THE 2027 CSL WE'VE SEEN AN INCREASE OF 18.77 FTES 109 00:30:06.950 --> 00:30:22.516 IN THE GENERAL FUND THIS TABLE SHOWS BY DEPARTMENT THAT HAVE PLANNED CHANGES IN GENERAL FUND FTE ACCOUNTS IN THE 2026 ADOPTED BUDGET AS WELL AS ADMINISTRATIVE FTE CHANGES MADE THIS YEAR. FOR EXAMPLE, TWO POSITIONS IN THE 311 SERVICE CENTER ARE PLAN IN TO START IN 2027 TOE 110 00:30:22.516 --> 00:30:38.183 ALIGN WITH THE OPENING OF THE SOUTH MINNEAPOLIS COMMUNITY SAFETY CENTER. THESE POSITIONS WERE INCLUDED IN THE 5-YEAR NANCIAL DIRECTION OF THE 2026 ADOPTED BUDGET AND ARE NOW REFLECTED IN TH 2027 CSL. ADMINISTRATIVE FTE ADDS 111 00:30:38.183 --> 00:30:54.283 THAT WERE APPROVED SUCH AS THE ARTS AND CULTURAL AFFAIRS OF O POSITION THAT WAS PRESENTED TO THIS COMMITTEE IN THE QUARTER 1 UPDATE ON ADMINISTRATIVE ADDS. ADDITIONAL ADMINISTRATIVE FTE REFLECTEDN THIS TABLE WILL BE REFLECTED IN THE QUARTER 2 REPORT. IF THERE'S ALSO PLANNED 112 00:30:54.283 --> 00:31:10.150 FUNDING SHIFTS FOR POSITIONS MOVING TO THE GENERAL FUND. FOR AMPLE, AS A FEDERAL SAFER GRANT FUNDING ENDED AFTER Q1 OF THIS YEAR THOSE POSITIONS ARE FULLY ON THE GENERAL FUND. IN 2026 THOSE5 POLYTHEISTS HAD 25% OF THEIR TYING BUDGET TO 113 00:31:10.150 --> 00:31:26.383 THIS GRANT AND STARTING IN 2027 THEY WILL NOW BE FULLY BUDGETED IN THE GENERALUND THAT LEADS TO A THAT. THESE CHANGES TO BUDGET POSITIONS LEAD TO THESE INCREASES IN THE GENERAL FUND PERSONNEL EXPENSE BUDGETS FOR 2027. 114 00:31:26.383 --> 00:31:43.100 I'LL NOW TURN TO INTERNAL SERVICE CHARGES. INTERNAL SERVICE DEPARTMENTS ARE THOSE THAT PROVIDES GOODS AND SERVICES TO OTHER DEPARTMENTS WITHIN THE ENTERPRISE ON A COST RECOVERY BASIS. THERIMARY PURPOSE OF INTERIM BE SERVICE FUNDS IS TO ENHANCE THE EFFICIENCY AND EFFECTIVENESS OF CITY SERVICES 115 00:31:43.100 --> 00:31:58.516 BY CENTRALIZING SHARED RESOURCES ACROSS DEPARTMENTS. WHICH IS AN APPROACH THAT IS CONSIDERED THE BEST PRACTICE. PROPERTY SERVICES IT, FLEET ANDIE GENERA LIABILITY ARE THE ONES WE MENTIONED BECAUSE THEY'RE ALLOCATION MODEL DRIVEN 116 00:31:58.516 --> 00:32:15.666 DISTRIBUTED THEIR COSTS THROUGH DEPARTMENTS. WE ASKED THESE DEPARTMENTS TO GENERATE AN EXPENSE BUDGET TO AGAIN. THIS BEGAN IN JANUARY AND WEEVIEWED THOSE BUDGETS AND THEIR PROPOSALS ALONGSIDE THE CONTROLLER AND THE CHIEF 117 00:32:15.666 --> 00:32:31.250 FINANCIAL OFFICER AND DECIDED WHAT LEVEL IS APPROPRIATE FOR THE FOLLOWING YEAR. THIS IS THE SAME PROCESS THAT WAS FOLLOWED LAST YEAR. THERE ARE NO CHANGES TO METHODOLOGY. THOSE BUDGETS ARE THEN ALLOCATED OUT TO DEPARTMENTS ACCORDING TO EACH INTERNAL SERVICE DEPARTMENTS ALLOCATION MODEL. THESE COST 118 00:32:31.250 --> 00:32:48.633 MODELS ARE DETERMINED USING CONSIDERATIONS LIKE DEPARTMENT FTE COUNTS HISTORICAL ACTUALS IDENTIFIED DEPARTMENT PROJECTS NEEDS AND ACUARIAL REPORT WE RECEIVE ANNUALLY HELPS RLECT THE NUMBERS WE'VE SEEN THERE. THESE CHARGES ARE 14% OF THE 119 00:32:48.633 --> 00:33:06.866 TOTAL OPERATING EENSE BUDGET AND THE CHARGES HAVE INCREASED ACROSS ALL FUNDS BY 16.8 MILLION AND 9.2 MILLION WITHIN THE GENERAL FUND IN THE 2027 CSL COMPARED TO THE 202 OF ADOPTED BUDGET. INCREASES ARE PERMANENTLY DRIVEN BY THOSE INFLATIONARY 120 00:33:06.866 --> 00:33:24.500 PRESSURES AND THE SQUARE FOOTAGES MANAGED AND HIGHER GENERAL LIBIMS OF THE CHANGES THESE A VISUAL OF THE FOUR ALLOCATION AMOUNTS. IT'S 121 00:33:24.500 --> 00:33:41.466 IMPORTANT TO NOTE THAT CHANGES IN PERSONNEL COSTS FEED INTO GROWTH IN INTERNAL SERVICE CHARGES AS WE HAD POSITIONS WE PROBABLY NEED TO ADD WORKSPACE, TECHNOLOGY OR PERHAPS A VEHICLE AND. ANOTHER EXAMPLE IS WHEN BUILDINGS COME ONLINE THERE ARE INCREASED NEEDS FOR CUSTODIAL 122 00:33:41.466 --> 00:33:56.166 AND SECURITY SERVICES. GENERAL FUND DEPARTMENTS ARE PROVIDED THE BUDGET TO PAY FOR THEIR INTERNAL SO FAR AS CHARGES EACH YEAR FOR PIV 1.5.6, AND THERE'S A REAL IMPACT TO EXPENDITURE GROWTH WITHIN THE GENERAL FUND 123 00:33:56.166 --> 00:34:15.766 EGG. -- GENERAL FUND. THAT OF EXPENSES AND NOW HAND IT OVER TO BEN FOR REVENUES. >> ALL RIGHT. THANK YOU, JUSTIN. AFTERNOON I'M AN ANALYST IN THE BUDGET DIVISION TO THIS POT IN THE PRESENTATION WE HAVE LARGELY 124 00:34:15.766 --> 00:34:31.533 FOCUSED ON THE CITY'S CURRENT SERVICLEVEL EXPENSES AND NOW I'LL TRANSITION HOW WE'RE PAYING FOR THOSE THROUGH OUR REVENUE FORECASTS. WE WILL FIRST BRIEFLY BE LOOKING AT ALL FUNDS AND THEN DIVING A BIT MORE INTO LOCAL OPTION SALES TAXES AND 125 00:34:31.533 --> 00:34:47.366 DOWNTOWN ASSETS AND THE GENERAL FUND AS HAS BEEN NOTED PREVIOUSLY WE WILL LARGELY FOCUS ON THE GENERAL FUND AND SOME KEY REVENUES THERE BECAUSE BROADLY SPEAKING THAT IS WHERE FUNDS MOST FLEXIBLE AND MOST DECISION-MAKING IS MADE. REVENUE FORECASTS ARE DEVELOPED THROUGH EXTENSIVE 126 00:34:47.366 --> 00:35:03.600 COLLABCANTION WITH SUBJECT-MATTER EXPERTS THROUGHOUT CITY SO I DO WANT BE TO GIVE A QUICK THANK YOU TO THE DOZENS OF INDIVIDUALS WHO HAVE FURTHERED THIS WORK. OKAY. BEFORE GETTING INTO LOCAL OPTION SALES TAXES IN 127 00:35:03.600 --> 00:35:20.133 THE GENERAL FUND WE WILL FIRST WALK THROUGH ONE BREVE SLIDE ON ENTERPRISE-WIDE REVENUES INTO ALL FUNDS. AS WITH ALL REVENUE SLIDES WE WILL BE PRESENTING TODAY, TWO REVENUE CATEGORIES ARE OMITTED. TRANSFERS AND USE 128 00:35:20.133 --> 00:35:36.433 OF FUNDS BALANCE THIS IS IT'S MORE INSTRUCTIVE TO LOOK AT REVENUES FROM OPERATIONS AS OPPOSED TO REVENUES FROM DECISION POINTS LIKE TRANSFERRING FUNDS. AS I SAID EARLIER RENUE FORECAST FOR ENTERPRISE AND CAPITAL FUNDS AS WELL AS CERTAIN 129 00:35:36.433 --> 00:35:52.500 SPECIALIZED FUNDS ARE STILL UNDER DEPARTMENT. WHEN FINALIZED IN THE COMING MONTH OR SO, THE 2027 AND '28 REVENUE FORECASTS WILL BE UPDATED THE INCLUSION OF THAT REVENUE DATA WILL SHIFT THESE OUTLOOKS HIGHER CORRECTING WHAT IS CURRENTLY SHOWING IN THIS VISUAL AS A 130 00:35:52.500 --> 00:36:11.750 CONTRACTION. THAT'S JUST THE AVAILABILITY IN THE PROCESS. ALL RIGHT AND N WE HAVE A FEW MORE SLIDES GETTING INTO -- OR BEFORE GETTINGO THE GENERAL FUND FIRST WE'RE GOING TO HAVE A SLIDE ON LOCAL OPTION SALES TAXES OR LOST REVENUE WHICH IS 131 00:36:11.750 --> 00:36:26.466 THE PRIMARY REVENUE ON THE DOWNTOWN ASSETS FUND. SECOND WE HAVE A SLIDE SHOWING THE FUND BALANCE VISUAL LOOKING AT THE DOWNTOWN FUND AND THIRD WE HAVE A SLIDE UNPACKINGHE DOWNTOWN ASSETS. I KNOW I PREVIOUSLY STATED NO TRANSFERS WOULD BE 132 00:36:26.466 --> 00:36:45.283 INCLING THE IN THESE VISUALS THIS IS THE LOANE EXCEPTION AS IT'S AN IMPORTANT RESEARCH TO THE DOWNTOWN FUND. IT'S IMPORTANT TO GRAPPLE WITH THESE FUNDS BECAUSE THE HEALTH OF THE REVENUES AND THE HEALTH OF THE DOWNTOWN ASSETS FUND HAVE DIRECT 133 00:36:45.283 --> 00:37:03.400 ITCH INDICATIONS ON THE ABILITY TO DO THAT TRANSFER TO THE GENERAL FUND. WITH THAT LET'S FIRST TAKE A LOOK AT THIS VISUAL OF THE IN ET LOST REVENUES. GENERALLY SPEAKING IT WOULD BE EASIER TO TALK TO THE GROSS REVENUE. IN 134 00:37:03.400 --> 00:37:21.233 THE PAST 5 YEARS THERE'S BEEN SUBSTANTIVE SHIFTS IN WHAT IS HELD ANNUALLY AS THE U.S. BANK STADIUM DEBT OR THE STATE OF MINNESOTA DEPARTMENT OF REVENUE ADMIN COS OVER THESE FUNDS. AND WITH THAT SAID, TO SET THE STAGE FOR OUR 2027 LOST 135 00:37:21.233 --> 00:37:36.533 OUTL OUTLOOK, I THINK IT COULD BE USEFUL TO TALK OF THE GROSS REVENUE TRAJECTORIES SINCE 2020 BECAUSE TS WAS A REVENUE HARDEST HIT BY COVID IN THE CITY. THE PERIOD FROM 2021-2025 CAN BE CHARACTERIZED IN THREE 136 00:37:36.533 --> 00:37:53.866 PHASES FOLLOWING 2020 GROSS REVENUES FALLING OFF SHARPLY CONTRACTING DOWN TO 92 MILLION TO 50 MILLION WE FIRST HAD PHASE 1 RECOVERY WHERE THERE WAS RAPID GROWTH, LARGELY IN 2022 WHEN OUR GROSS REVENUES GOT BACK TO NEAR PRE-COVID LEVELS. IN 137 00:37:53.866 --> 00:38:10.433 PHASE 2 IN '23 AND '24 WE STILL SAW HEIGHTENED OR ELEVATED ANNUAL GROWTH OF THESE REVENUES ABOUT 9%. AND THEN PHA 3 IS WHERE WE FIND OURSELVES TODAY IN A POST-RECOVERY LEVELING OUT OUR 2025 REVENUES CAME IN LARGELY FLAT AND THE OUTLOOK MOVING 138 00:38:10.433 --> 00:38:26.500 FORWARD IS MORE LOWER AND MORE MODERATE GROWTH FOR THESE REVENUES. TO MOVE INTO 2026 OUR Q1 GROSS REVENUES WERE NEARLY 2% AHEAD OF 2025 Q1 WHICH IS SUPERV SURPRISING GIVEN OPERATION METRO 139 00:38:26.500 --> 00:38:44.066 SURGERY WHILE -- SURGE. FOOD SERVICE WAS SIGNIFICANTLY IMPACTED DURING Q1, SALES TAX COLLECTIONS IN AGGREGATE ACROSS ALL INDUSTRIES ACTUALLY REMAINED RELATIVELY STRONG. LOOKING AHEAD TO 2027, WE ARE PRESENTING THE PLANNED GROWTH OF 2.9% IN THE 2026 140 00:38:44.066 --> 00:39:01.300 ADOPTED BUDGET. WE'RE STILL IN THE PROCESS OF DEVELOPING THE LAST FORECAST BECAUSE IT'S BEST TO GIVE YOURSELVES AN ADDITIONAL MONTH OR SO TO CONSIDER FORECASTING BEFORE THE BUDGET. GIVEN WHAT WE'RE CURRENTLY SEEING IN 2026ND ALONGSIDE THE 141 00:39:01.300 --> 00:39:17.066 FORECAST DATA WE LEVERAGE FOR OUR WORK, WE DO NOT ANTICIPATE THE 2027 TO 2032 FORECAST TO SHIFT STIMULUUBSTANTIVELY AGAIN ONE THAT'S ANNUAL GROWTH IN THE 2.5 TO 3% RANGE. 142 00:39:17.066 --> 00:39:33.466 NOW THAT WE'VE TALKED THROUGH THE DOWNTOWN ASSETS ARE THEN LET'S MOVE TO ANOTHER SLIDE TO TALK MORE HOLISTICALLY ABOUT THE FUND BALANCE OUTLOOK IN THE DOWNTOWN ASSETS FUND. AS A NOTE THE CONVENTION CENTER DOWNTOWN ASSETS AND TARGET CENTER FINANCE PLANS ARE STILL UNDER DEVELOPMENT SO HERE AGAIN WE'RE 143 00:39:33.466 --> 00:39:50.900 LOOKING AT DATA CORRESPONDING WITH THE 2026 ADOPTED BUDGET DESPITE THIS THE DATA IS STILL QUITE INFORMATIVE. LOOKING AT OUR 6-YEAR OUTLOOK FOR THE FUND BALANCE WE HAVE IT FORECASTED AT 81 MILLION IN THE DOWNTOWN ASSETS FUND IN 2026 DROPPING TO 144 00:39:50.900 --> 00:40:08.133 48 MILLION IN 2041. SINCE THIS OUTLOOK AGAIN COINCIDES WITH THE 26 POST ADOPT BUDGET THERE ARE NO FURTHER UPDATES FROM THE CURRENT YEAR AND NO CURRENT FINANCIAL ACTUALS SO, FOR EXAMPLE, THE $7 MILLION TRANSFER FOR THE SMALL BUSINESS RESILIENCY FUND, AGAIN, IN 145 00:40:08.133 --> 00:40:24.300 RESPONSE TO OPERATION METRO SURGE IS NOT REFLECTED INCLUDING THAT WOULD BUMP THE LINE GRAPH DOWN. SO LASTLY, I DO WANT TO NOTE THAT WE'VE INCLUDED THE FINANCIAL POLICY LANGUAGE 146 00:40:24.300 --> 00:40:40.533 RELEVANT TO THE DOWNTOWN ASSETS FUND BALANCE DOWN ON THIS SLIDE. OKAY, N THAT WE'VE TALKED ABOUT, AGAIN, THE REVENUES AND THE DOWNTOWN ASSETS FUND BALANCE OUTLOOK, LET'S MOVE ON TO ONE FINAL SLIDE ON THIS TOPIC TO EXPLAIN MORE ABOUT THE DOWNTOWN ASSETS TRANSFER TO THE GENERAL 147 00:40:40.533 --> 00:40:56.733 FUND. BEFORE THE LOST REVENUE CAN BE CONSIDERED FOR TRANSFER, IT IS -- IT FIRST SUPPORTS DEBT SERVICE OBLIGATIONS, OBSERVATIONS IN DOWNTOWN ASSETS. AGAIN THESE DOWNTOWN ASSETS INCLUDE THE CONVENTION CENTER CENTER, THE TARGE CENTER, WITH 148 00:40:56.733 --> 00:41:12.866 FOLDING FOR THE BANK STADIUM CENTER. ONCE THOSE ACCOUNTS ARE ACCOUNTED FOR THE TRANSFE ARE IN THE OUTLOOK. ANY FUND BALANCE IN FINANCIAL POLICY AND, AGAIN, TAKING INTO CONSIDERATION 149 00:41:12.866 --> 00:41:29.133 ELIGIBLE SPENDING IN THE MAYOR'S RECOMMENDED BUDGET. SO THE TRANSFER TO TERMINATION IS A MATTER OF BALANCING THE HEALTH OF THE FUND BALANCE AND ELIGIBLE US IN THE GENERAL FUND NAMELY SPEAKING ECONOMIC DEVELOPNT. SO FOR AN ENTIRELY THEORETIC EXAMPLE IF 150 00:41:29.133 --> 00:41:44.933 WE'RE ABLE TO FD $100 OF ELIGIBLE USES THAT DOESN'T NECESSARILY MOST RECENT ENTIRE $100 WOULD BE RECOMMENDED FOR THE TRANSFER BECAUSE WE NEED TO ENSURE THAT THE TRANSFER IS FISCALLY PRUDENT GIVEN ALL THE FINANCIALS OF THE CITY. IN RECT YEARS, THE GENERAL FUND TRANSFER HAS BEEN 151 00:41:44.933 --> 00:42:00.166 AMENDED THROUGH THE BUDGET PROCESS AS WELL AS OUTSIDE. AND SO JUST TO TALK THROUGH THE 2026 EXAMPLE. FINANCE RECOMMENDED A TRANSFER FOR THE 2026 BUDGET OF 47.4 MILLION. THROUGH AMENDMENTS TO THE BUDGET,HAT 152 00:42:00.166 --> 00:42:17.166 TRANSFER INCREASED TO 49.8 MILLION AND THAT WAS FOR ELIGIBLE USES BEINGLLOCATED IN THE GENERAL FUND AND THEN MORE RECENTLY AGAINST OUTSIDE OF THE BUDGET PROCESS IN RESPONSE TO OPERATION METRO SURGE THE TRANSFER WAS FURTHER INCREASED TO 56.8 TO SUPPORT THE SMALL BUSINESS RESILIENCY FUND. 153 00:42:17.166 --> 00:42:33.233 THE BOTTOM LINE WE'RE JUST TRYING TO REITERATE THROUGH THESE THREE SLIDES TOGETHER IS THAT MODERATING LOST ARE THEN GROWTH AND THE OUTLOOK FOR THE FUND BALANCE MEANS THE DOWNTOWN ASSETS TO GENERAL FUND TRANSFERENCE WILL NOT BE A SUSTAINABLE MOVING FORWARD AS A TOOL TO SUPPORT THE CURRENT 154 00:42:33.233 --> 00:42:49.400 SERVICE LEVEL AND SOMETHING WE NEED TO CONTINUOUSLY MONITOR. WITH THAT WE CAN NOW TRANSITION TO FOCUS FULLY ON THE GENERAL FUND REVENUES. AND AS I NOTED EARLIER, THIS VISUAL EXCLUDES TRANSFERS AND USE OF FUND BALANCE TO FOCUS ON EXTERNAL REVENUES. THE OUTLOOK 155 00:42:49.400 --> 00:43:04.933 OF 2027 REMAINS SLIGHTLY POSITIVE THE LOWER GROWTH THAN YEARS PRIOR. WE'RE FORECASTING 24.% IN 2027 FOR THE 5-YEAR FINANCIAL DIRECTION THE GENERAL FUND LEVY HAS PLANNED GROWTH OF 156 00:43:04.933 --> 00:43:20.866 4.8% AND THE REMAINING GENERAL FUND REVENUES HERE AGGREGATED A NONLEVIED REVENUES WHERE TO CONTRACT .6%. F CLARITY I WILL NOTE THAT THE LEVY REVENUE IS INCLUDED IN THE TAXES REVENUE IN THE BLUE BAR AND THAT'S THE 157 00:43:20.866 --> 00:43:38.300 MAJORITY OF THAT REVENUE AND WE'LL IMPACT THAT IN AN UPCOMING SLIDE. IN THE MODEST FORECASTED CONTRACTION IS DIFFERENT IN PREVIOUS YEARS IS GROWING 3%. 158 00:43:38.300 --> 00:43:53.133 ONE IS INTERGOVERNMENTAL REVENUES WHICH IS FORECASTED TO GROW 3.5%. THIS IS DUE TO AN INCREASE TO A FEW STATE AIDS NOTABLY IN THE POLICE AND FIRE DEPARTMENTS. BROADLY SPEAKING THE GROWTH IS ATTRIBUTED TO 159 00:43:53.133 --> 00:44:09.933 INCREASED GROWTH AMOUNTS IN MPD BECAUSE OFFICER COUNT FACTORS INTO THE STATE AID AND FIRE TO OFFSET PTSD. INTEREST REVENUE IS FORECASTED TO CONTRACT NEAY 40% YEAR-OVER-YEAR OR $5 160 00:44:09.933 --> 00:44:27.083 MILLION. THIS IS AGAIN LARGELY DUE TO REDUCED FUND BALANCE BUT ALSO WORSENING RATES AND YIELDS R INVESTMENTS AND SO THE YEAR-OVER-YEAR DECREASE REVENUE OUTLOOK FOR NONLEVIED RENUES THAT'S FAR AND AWAY THE MOST NOTEWORTHY CHANGE THAT'S DRIVING THIS CONTRACTION. 161 00:44:27.083 --> 00:44:43.466 FORECASTED FEES ARE FORECASTED TO CONTRACT ABOUT 3%. IN 2024 AND '25 FRANCHISE FEES REVENUE CAME 5 MILLION UNDER THIS FORECAST DOES TAKE INTO CONSIDERATION THE INCREASED REV INCREASES APPROVED BY COUNCIL 162 00:44:43.466 --> 00:44:58.716 LAST FALL FOR IMPLEMENTATION IN THE CURRENT YEAR. THE MODEST CONTRACTION IS A RIGHT-SIZING ST FOR THE UNDERCOLLECTION IN THE LAST 2 YEARS. LASTLY NBUSINESS LICENSE AND PERMIT REVENUES ARE CONTRACTED TWO% 163 00:44:58.716 --> 00:45:16.233 THIS IS A DAMPENING OF EXPECTATIONS FOR REVENUES RELATED TO DEVELOPMENT ACTIVITY IN THE CITY. SPECIFICALLY REDUCED PERMITTING REVENUE IN CPED IN REG SERVICES. THOSE REVENUES DID UNDER PERFORM IN 2025 BY 3.5 MILLION AND 2026 IS 164 00:45:16.233 --> 00:45:35.466 OFF TO A SLUGGISH START. STAYING WITHIN THE GENERAL FUND WE HAVE TWO FIN REVENUE SLIDES JUST TO DRILL DOWN INTO THE TWO LARGEST REVENUE CATEGOES. TAXES AND INTERGOVERNMENTAL REVENUES. FIRST TAXES WHICH IS THE LARGEST ONE INTO THE GENERAL 165 00:45:35.466 --> 00:45:53.000 FUND. THE PROPERTY TAXES OR LEVY REVENUE ACCOUS FOR THE VAST MAJORITY OF THIS. IN 2025, LEVY REVENUE WAS ROUGHLY 54% OF GENERAL FUND REVENUE. THE PROPERTY TAX REVENUE FORECAST SHOWN HERE DOES FOLLOW THE 5-YEAR FINANCIAL DIRECTION AS DOCUMENTED ITHE 2026 ADOPTED 166 00:45:53.000 --> 00:46:10.200 BUDGET. ONE FINAL NOTE THAT THE PLANNED LEVY PRESENTED HERE DOES NOT TAKE INTO CONSIDERATION NEW OR REDUCED SPENDING, AGAIN, IT IS DIRECTLY FROM THE 5-YEAR FINANCIAL DIRECTION IN THE 2026 ADOPTED BUDGET. AND LASTLY, INTERGOVERNMENTAL REVENUES ARE THE SECOND LARGEST REVENUE IN 167 00:46:10.200 --> 00:46:26.766 THE GENERAL FUND. AND LOCAL GOVERNMENT AID OR LGA ACCOUNTS FOR THE MAJORITY OF THIS. LGA IS ABOUT 10% OF THE GENERAL FUND REVENUE AND ROUGHLY 80% OF INTERGOVERNMENTAL REVENUES. 2027 LGA IS FORECASTED TO HOLD FLAT FROM 2026 WHICH IS 168 00:46:26.766 --> 00:46:43.666 ESSENTIALLY ON PAR WITH THIS REVENUE LEVEL BEFORE COVID AND TOTAL EXPECTED LGA FROM THE CITY IN 2027 IS 71.7 MILLION. AND LASTLY I WILL NOTE THAT THE TOTAL CITY OF MINNEAPOLIS LGA CERTIFICATION IS FORECASTED 169 00:46:43.666 --> 00:47:00.133 CLOSER TO 82 MILLION BUT PER ORDINANCE NEARLY 12% IS SHARED WITH MPRB. AND WITH THAT, I WILL TURN IT OVER TO JANE. 170 00:47:00.133 --> 00:47:16.533 >> OKAY. THANK YOU ALL FOR YOUR ATTENTION WEE GIVEN YOU A LOT OF INFORMATION TODAY ABOUT THE BUDGET PROCESS AND THE TRENDS IDENTIFIED IN THE DATA. SO WE STARTED WITH THAT ESTIMATED GAP BETWEEN EXPENSES AND REVENUES AND THEN WE EXPLORED MORE DEEPLY WHY THAT G EXISTS EVEN WITH A 171 00:47:16.533 --> 00:47:32.833 PLANNED LEVY INCREASE. ON THE EXPENSE SIDE WE WALKED THROUGH THE THREE MAIN EXPENSE CATEGORIES AND THEN COVERED THE REVENUE TRENDS AS WELL. THE GENERAL FUND AWE'VE SAID AS THE PORTION OF THE CITY'S BUDGET WHERE YOU ALL 172 00:47:32.833 --> 00:47:48.000 SPEND MOST OF YOUR TIME AND DECISION AND IT IS THE MOST FLEXIBLEORTION OF OUR BUDGET. DESPITE THAT THERE ARE ELEMENTS OF THE GENERAL FUND HE BOWLING WHERE WE HAVE LESS CONTROL SOME NONPERSONNEL EXPENSES ARE IMPACTED BY ILATION AND TARIFF POLICIES. 173 00:47:48.000 --> 00:48:07.500 PERSONNEL COSTS ARE SUBJECT TO COLLECTIVE BARGAINING AND FAMILY LEAVE AND ALL OF THESE FACTORS INFLUENCE THE BUDGET CONTEXT IN WHICH WE FIND OURSELVES FOR. GOING FORWARD IN THIS BIENNIAL BUDGET PROCESS IS TO LIMIT RISK AND MAKE SURE THE 174 00:48:07.500 --> 00:48:22.766 CITY REMAINS AN AFFORDABLE PLACE TO LIVE SO WE WILL BE SPENDING OUR SUMMER LOOKING AT ALL POSSIBLE LEVERS TO MAXIMIZE REVEES AND PRIORITIZE THE SPENDING NEEDS. AND I WILL WRAP UP TODAY WITH JUST A BRIEF REMINDER OF 175 00:48:22.766 --> 00:48:37.733 SOME OF THE -- OF THE TIMELINE MAY, WE HAD DEPARTMENTS SUBMIT REVENUES, BUDGET PROPOSALS FOR SUBMISSION TO THE MAYOR THROUGHOUT JUNE AND JULY, WE ARE HERE PRESENTING TO YOU WITNESS TO THE BET. AND WE'RE ALSO 176 00:48:37.733 --> 00:48:56.133 MAKING PRESENTATIONS TO THE MAY BUDGET ITEMS FOR '27 AND '28. IN AUGUST WE'LL HAVE THE MAYOR'S SPEECH AND CONCURRENT WITH THAT OUR BUDGET BOOK WILL GO LIVE. IN SEPTEMBER, THE BUDGET IREALLY FORMALLY 177 00:48:56.133 --> 00:49:12.433 TRANSMITTED TO THIS BODY AND THERE WILL BE SOME FORM OF BUDGET OVERVIEW PRESENTATION FROM THE BUDGET DIVISION AS WELL AS DEPARTMENT REVIEWS. IN SEPTEMBER, THE BET WILL SET THAT MAXIMUM PROPERTY TAX LEVY WHICH SETS THE CEILING OF 178 00:49:12.433 --> 00:49:28.366 WHAT WE CAN SPEND FOR 2027. AND THEN THROUGHOUT THE FALL; WE'LL HAVE PUBLIC HEARINGS IN A FORMAT TO BE DETERMINED BY THE BUDGET CHAIR ALONG WITH FINAL BUDGET MARKUP IN MID-HE DECEMBER. SO WITH THAT, WE'RE CONCLUDED WITH OUR PRESENTATION 179 00:49:28.366 --> 00:49:44.783 AND CAN STAND FOR ANY QUESTIONS. >> TNK YOU FOR THIS PRESENTATION. MR. KARLSON, JANE AND BEN, COLLEAGUES, ARE THERE ANY QUESTIONS RELATED TO THIS 180 00:49:44.783 --> 00:50:03.666 PRESENTATION? I BELIEVE PRESIDENT PAYNE IS FIRST. >> THANK YOU, CHAIR CHUGHTA I HAVE A FEW QUESTIONS I'LL GO MAYBE FROM THE TOP OF E PRESENTATION DOWN. PAGE 4, YOU 181 00:50:03.666 --> 00:50:19.316 KNOW, IT'S KIND OF ALARMING TO SEE THIS 28 TO $33 MILLION GAP BETWEEN REVENUE EXPENSES. I DID LOOK AT PAST PRESENTATIONS AND IT LOOKS PRETTY STANDARD THAT THERE IS THIS MISMATCH AT THIS STAGE BUT IN OTHER PRESENTATIONS 182 00:50:19.316 --> 00:50:33.616 WE DON'T HAVE A REAL SENSE OF THE SCALE OF THAT CAP SO, FOR EXAMPLE, THE GENERAL FUND -- WELL, IT'S NOT ONE-TO-ONE BUT IT'S 5% EXPENSE INCREASED TO ROUGHLY 2% OF REVENUE INCREASE BUT THEN IN PREVIOUS YEARS, IT 183 00:50:33.616 --> 00:50:53.266 WAS 3.89% EXPENSE INCREASED 3.64 REVENUE INCREASE WHICH IS PRETTY CLOSE. >> UH-HUH. >> A DECREASE OF .48 AND A DECREASE OF 3.64 IN 2024 AND 184 00:50:53.266 --> 00:51:10.483 THEN WE ONLY HAD THE TOTAL FUND DELTA, 2.1 INCREASED EXPENSE, 4.3 INCREASE IN REVENUE. I DIDN'T GET A SENSE OF THE ACTUAL DOLLAR AMOUNT IN THOSE PAST PRESENTATIONS SO IT'S LIKEN 185 00:51:10.483 --> 00:51:26.683 ADMINISTRATIVE FOLLOW-UP CAN WE GET A SENSE OF THOSE DOLLAR AMOUNTS? >> THROUGH THE CHAIR PRESIDENT PAYNE I THINK THE ONE I HAVE WE HAD ABOUT $20 MILLION DELTA SO IT IS TYPICAL, I THINK, WE ARE 186 00:51:26.683 --> 00:51:43.150 SEEING- I THINK THE REVENUE IS A KEY PART OF THIS STORY. >> UH-HUH >> WE'RE NOT SEEING THAT NATURAL GROWTH IN REVENUE ANYMORE THAT HAS SORT OF PICKED UP THE TAB. WE'RE ALSO, YOU KNOW, FULLY EXITED FROM ARPA IS AT THIS POINT WHICWAS AROUND IMPORTANT WAY WE PAID FOR OUR EXPENSES OVER THE LAST 5 YEARS. 187 00:51:43.150 --> 00:51:58.416 >> YEAH, MAYBE IF WE COULD SKIP THE ADMINISTRATIVE FOLLOW-UP COULD YOU JUST GIVE ME A BALLPARK OF WHAT THAT GAP IS, IF IT'S LIKE ANYWHERE BETWEEN 20 AND 30 AND THAT'S NORMAL AND WE SHOULDN'T BE ALARMED OR IF IT'S NORMALLY IN LIKE THE 5 TO 10 AND 188 00:51:58.416 --> 00:52:16.650 WE STILL BE ALARMED, IT WOULD BE A GOOD TO GET THAT SENSE. >> CHAIR CHUGHTAI, COUNCIL PRESIDENT, THIS IS A LARGE GAP. I WON'T SUGARCOAT THAT. WE HAVE A LOOF WORK TO DO AND WE WILL DO IT BUT I WOULD SAY THAT THIS 189 00:52:16.650 --> 00:52:30.900 IS A SUBSTANTIAL GAP THAT WE'RE FACING RIGHT NOW. >>KAY. ON PAGE 16 FOR THE INTERNAL SERVICE CHARGE ALLOCATION MODEL. I DON'T FEEL LIKE I'VE EVER SEEN OUR ALLOCATION MODEL BEFORE. AND WHEN I DON'T KNOW IF I HAVE A 190 00:52:30.900 --> 00:52:48.950 SENSE OF IT IT'S ACCOUNTING AND THERE'S INTERESTS IN DEPRECIATION BAKED IN I DON'T KNOW I HAVEN'T SEEN THE MODEL BEFORE. IS THAT SOMETHING YOU CAN SHARE WITH ME? >> CHAIR CHUGHTAI, COUNCIL PRESIDEN THERE ARE DIFFERENT MODELS FOR EACH OF THESE FOUR ELEMENTS AND THEY'RE ALL VERY 191 00:52:48.950 --> 00:53:04.616 DUPLEX BUT, YES, YOU'RE RIGHT THEY'RE BASED ON PROPERTY SERVICES, FOR EXAMPLE, TAKES A LOOK AT WHERE EVERYBODY IS SITTING IN THE ENTERPRISE AND GURES OUT WHAT IT COSTS TO PROVIDE THAT LEVEL OF SERVICE FOR EACH OF THOSE DESKS SO AS DEPARTMENTS ARE GROWING THEIR HEADCOUNTS THOSE COSTS ARE GOING 192 00:53:04.616 --> 00:53:21.283 UP AS WELL. TECHNOLOGY IS SIMILAR. BY FTE, YOU KNOW -- WELL, NOT EVERY CITY EMPLOYEE HAS A LAPTOP EVERYBODY USES OUR CITY IT INFRASTRUCTURE TO SOME DEGREE AND IT'S BASED ON INPUTS LIKE THAT AS WELL AS 193 00:53:21.283 --> 00:53:37.950 SPECIFIC SOFTWARE SYSTEMS THAT THOSE DEPARTMENTS USE. SO I DON'T KNOW HOW ILLUSTRATIVE JUST HANDING YOU THE MODELS WOULD BE -- >> I WOULD LOVE TO HAVE THE MODELS AND DIG INTO IT IF IT'S POSSIBLE. >> I MIGHT SGEST THAT WE DO SOME SORT OF STUDY SESSION TO 194 00:53:37.950 --> 00:53:53.550 WALK THROUGH THAT INFORMATION BUT WE CAN CERTAINLY CONNECT OFFLINE ABOUT THAT. >> LET'S CONNECT OFFLINE AND MAYBE DO BOTH. AND THEN I'M NOT SURE THAT OVERTIME IS ACCOUNTED FOR IN THE CSL. IS IT? 195 00:53:53.550 --> 00:54:10.416 >> THAT'S CORRECT. I BELIEVE JUSTIN SPOKE TO THAT. SO OVERTIME IS NOT PART OF THE PERSONNEL COMPLEMENT THAT INFLATES YEAR-TO-YE. SO IN FINANCIAL POLICIES IT'S TREATED SEPARATELY WITH THE IDEA THAT THIS BODY IS GETTING AN EXPLANATION OF WHAT THE OVERTIME OUGHT TO BE. WE WERE HE IN THE HABITOR MANY YEARS OF BRINGING 196 00:54:10.416 --> 00:54:30.016 YOU AN ANNUAL OVERTIME PROPOSAL ANTICIPATE THAT THAT WILL BE PART OF OUR BUDGET PROCESS THIS YEAR >> CAN YOU SPEAK TO THE MODEL ASSUMPTIONS FOR FORECASTING OVER TIME? >> THROUGH THE CHAIR, COUNCIL PRESIDENT, THE TWO MAIN 197 00:54:30.016 --> 00:54:46.050 DEPARTMENTS, OCOURSE, THAT USED OVERTIME IN A SIGNIFICANT WAY ARE POLICE AND IF HE WANTS AND WE LOOK TO THOSE DEPARTMENTS TO GET US AN ESTIMATE WHAT EY WOULD NEED YEAR-TO-YEAR IN WHICH FINANCE WOULD VET FINAL PERFORMANCE WHAT BECOMES 198 00:54:46.050 --> 00:55:01.683 DIFFICULT WHEN WE'RE JUST LOOKING AT PRIOR YEAR ACTUALS IS, OR COURSE, THOSE CONTRACTS HAVE CHANGED QUITE A BIT SO THE HOURLY RATES HAVE GONE WAY UP. SO YOU DO HAVE TO DO SOME ANALYSIS TO FIGURE OUT WHAT THAT MIGHT BE. SO I BELIEVE O APPROACH THIS YEAR WILL BE TO 199 00:55:01.683 --> 00:55:17.583 GET THOSE PROPOSALS FROM THE DEPARTMENTS, APPLY SOME -- SOME RIGOR AND FRIENDLY SKEPTICISM TO EVERYTHING WE GET AND MAKE A RECOMMENDATION TO THE MAYOR >> THIS IS WHY I'M GOING TO HAVE TO BE THE MOST DIRECT ON. ABSOLUTELY NOT POSSIBLE TO 200 00:55:17.583 --> 00:55:34.650 ACCURATELY PREDICT DOWN TO THE SECOND WHAT OVERTIME CAN BE AND YOU CAN NEVER GUESS THAT A MASSIVE SCHOOL SHOOTING IS GOING TO HAPPEN, ELECTED LEADERS ARE GOING TO GET ASSASSINATED AND THE FEDERAL GOVERNMENT IS GOING INVADE YOUR CITIES THIS IS NOT THINGS THAT YOU BUILD INTO 201 00:55:34.650 --> 00:55:50.116 YOUR MODEL AND I WANT TO GIVE THE CAVEAT WHETHER WE WOULD HAVE GUESSED THE RIGHT AMOUNT OF OVERTIME THIS LAST YEAR BUT AT THE SAME TIME, A 5X DELTA IS LIKE -- YOU NEED TO BE IN AN ORDER OF MAGNITUDE IN YOUR 202 00:55:50.116 --> 00:56:06.450 FORECASTING AS WELL AND SO MY EXPECTATION IS THAT EITHER WE'RE MANAGING THAT OVERTIME SO IT DOESN'T GET SO OUT OF CONTROL OR WE'RE ACCURATELY FORECASTING IT SO WE'RE NOT LEFT HOLDING THE BAG WHEN WE FALL SHORT IN THE AMOUNT OF MONEY WE WERE 203 00:56:06.450 --> 00:56:21.750 ALLOCATING FOR THAT SO I REALLY WANT TO INDICATE US TO TAKE A REALISTIC LENS AT OVERTIME. ALL WE C DO IS APPROVE THE BUDGET. WE CANNOT MAKEEPARTMENTS MANAGE TO THEIR BUDGET AND SO IF WE'RE GOING TO BE APPROVING A BUDGET I WANT THAT NUMBER TO 204 00:56:21.750 --> 00:56:39.083 ACCURATE AND REAL AND NOT ORDERS OF MAGNITUDE BUT THAT'S JUST KIND OF A COMMENT. AND MYAST QUESTION, THE DOWNTOWN ASSET FUND WAS CONTINUOUSLY DECREASING SE I KNOW WE HAD A ROBUST CONVERSATION ABOUT TRANSFER BUT I DIDN'T NECESSARILY WALK AWAY 205 00:56:39.083 --> 00:56:55.483 FROM THE DRIVER OF THAT. ARE WE EXPECTING THOSE DECREASES BECAUSE WRE DECREASING OUR EXPECTATION OF REVENUE COLLECTION OR WAS THAT MORE A REFLECTION OF WHAT OUR APPROACHES TO THE TRANSFER TO THE GENAL FUND. >> CHAIR CHUGHTAI, COUNSEL 206 00:56:55.483 --> 00:57:11.116 PRESIDENT IT'S BOTH. BECAUSE OF THAT RAPID RETURN TO NORMAL THAT BEN TALKED ABOUT, THE RAPID RECOVERY, THE DOWNTOWN ASSETS FUND BALANCE GREW TO QUITE A HIGH-LEVEL SEVERAL YEARS AGO AND SO THE FINANCE DEPARTMENT RECOMMENDED THAT WE RAMP UP THAT 207 00:57:11.116 --> 00:57:26.850 TRANSFER. THE GENERAL FUND NEEDED SUPPORT COMING OUT OF ARPA AND THERE WAS EXCESS FUND BALANCE AND SO WE HAVE DRASTICALLY INCREASEDHE TRANSFER AND WE INCREASED THE TRANSFER OVER YEARS AND THAT'S 208 00:57:26.850 --> 00:57:43.950 PART OF IT AND WE'RE ALSO SEEING THAT PART OF PLATEAU IN IT REVENUES. I GUESS ONE OTHER FACTOR THAT WE SHOULD ACKNOWLEDGE WE DED THE COAL'S CENTER TO THE SUITE OF DOWNTOWN ASSETS SO AND SO WE INCREASED OUR RESPONSIBILITIES WITH THOSE DOLLARS BEFORE THEY CAN COME TO THE GENERAL FUND. SO THIS IS 209 00:57:43.950 --> 00:58:00.566 WHY WE REVISIT THAT TRANSFER AMOUNT ANNUALLY JUST TO TO MAKE SURE WE'RE LEAVING ENOUGH MONEY FOR THOSE ASSETS THAT ARE SO IMPORTANT TO OUR DOWNTOWN AND ALSO ALLEVIATING PRESSURE WHERE WE CAN IN THE GENAL FUND. >> SO WHAT WE'RE LOOKING AT ON THAT GRAPH -- THAT'S THE ONE SLIDE I DIDN'T WRITE THE PAGE 210 00:58:00.566 --> 00:58:16.583 NUMBER DOWN, BECAUSE THE TIMELINE STARTS IN 2024, WE DON'T SEE THE BIG TAILOR SWIFT SPIKE AND THE GNT CLIFF DROP FROM COVID AND SO WE'RE JUST LOOKING AT THE PEAK AND THEN GOING FORWARD FROM THERE. >> OY. 211 00:58:16.583 --> 00:58:33.200 >> OKAY, THANK YOU. >> THANK YOU. NEXT I WILL RECOGNIZE COUNCIL MEMBER WONSLEY. >> THANK YOU, CHAIR CHUGHTAI. SO BACK IN APRIL, MY OFFICE REACHED OUT TO YOU AN UPDATE REGARDING THE FEE STUDY THE 212 00:58:33.200 --> 00:58:50.050 COUNCIL PASSED NEARLY 2 YEARS AGO AND YOU SHARED THAT THE FEE STUDY CHANGES WOULD BE INCORPORATED IN IT TODAY'S PRESENTATION, AND JUST FOR SOME CLARITY FOR SOME OF MY NEWER COLLEAGUES, COUNCIL PASSED A LEGISLATIVE DIRECTIVE 2 YEARS AGO ASKING FOR THE ADMINISTRATION TO COMPLETE A 213 00:58:50.050 --> 00:59:05.600 COMPREHENSIVEEE STUDY SO THAT WE COULD HAVE A BETTER UNDERSTANDING OF AREAS WHERE FE ARE NOT BEING FULLY OPTIMIZED TO COVER THE FULL COST OF VARIOUS CITY SERVICES. I KNOW I ADVOCATED FOR THIS BECAUSE FEES ARE CURRENTLY A TOOL TT THE CITY CAN LEVERAGE 214 00:59:05.600 --> 00:59:23.150 TO MAKE CITY SERVICES MORE FINANCIALLY SUSTAINABLE. AND ALSO THE RELIEF TO TAXPAYERS BUT I'M NOT SEEING ANYTHING RELATING TO THE FEE STUDY OR ANY SPECIFIC CHANGES HOW FEES WILL BE INCREASED OR DECREASED IN THIS 215 00:59:23.150 --> 00:59:40.266 PRESENTATION AS FAST REQSTED IN THAT LEGISLATIVE DIRECTIVE. IT'S ALSO NOT CLEAR WHAT DEPARTMENTS WILL BE IMPACTED AND IF THE PROJECTIONS THAT WE WERE TOLD ABOUT OR ARE LOOKING AT IN THIS PRESENTATION TAKE INTO ACCOUNT THOSE POTENTIAL CHANGES SO CAN YOU CLARIFY IF THE FINANCE TEAM ACTUALLY DID A 216 00:59:40.266 --> 00:59:56.416 COMPREHENSIVE FEE ANALYSIS AND IF SO, ARE THOSE PROJECTIONS YOU'RE UTIZING FOR 2027 OR ARE YOU CURRENTLY USING OUR EXISTING FEE LEVELS. >> CHAIR CHUGHTAI, COUNCIL MEMBER WONSLEY I DID PROMISE YOUR OFFICE AN UPDATE WHICH IS IN MY NOTES AND I 217 00:59:56.416 --> 01:00:13.283 FORGOT TO SAY. WE ARE STILL UNDERWAY WITH THE FEE STUDY. IT'S A MASSIVE ENDEAVOR WITH UP TO 600 FEES IN PROBABLY FOUR OR FIVE DEPARTMENTS WITH, YOU KNOW, PERHAPS DOZENS OF CITY STAFF INVOLVED IN THE ANALYSIS AND SO WE ARE CONTINUING TO DO THAT 218 01:00:13.283 --> 01:00:27.750 WORK. I WOULD HE HAVE LOVED TO INCORPORATE IT IN THIS PRESENTATION BUT WE DO NOT YET HAVE ANY FINDINGS. >> DO YOU HAVE A TIMELINE 'CAUSE AGAIN THIS HAS BEEN NEARLY 2 YEARS WE'VE BEEN TING TO TROUBLESHOOT THE COMPLETION OF THIS. DO YOU HAVE A TIMELINE 219 01:00:27.750 --> 01:00:45.750 WHEN WE WILL GET AN INITIAL PRELIMINARY TIMELINE ON T PRESENTATION >> I DON'T BELIEVE I PROMISED TO INCORPORATE ANY FINDINGS IN OUR EMAIL. I'D HAVE TOO BACK AND LOOK. >> YEAH, I'M MORE THAN HAPPY TO INCLUDE IT IN LIMS. >> I'D APPRECIATE IT. I THINK 220 01:00:45.750 --> 01:01:01.716 WE WOULD HAVE SOMETHING IN TWO MONTHS SO IF THERE'S AN ABILITY TO INCORPORATE ANYTHING IN THE FALL I WOULD DISCUSS IT. I WOULD CAUTION THIS BODY WE DON'T HAVE ANY, ANY REVENUE WILL GO UP. THERE ARE SOME THAT WILL HAVE TO DECREASE DUE TO THE 221 01:01:01.716 --> 01:01:18.183 INQUIRY. >> AGAIN THE INTENT OF THE LEGISLATIVE DIRECTIVE BECAUSE WE HAVE NOT GOTTEN CONSISTENT UNDERSTANDING WHA OUR FEES ARE EITHER BEING OPTIMIZED OR UNDERUTILIZED WHICH ALSO COMES WITH THEIR VARIOUS AMOUNTS OF RISK BUT ALSO MEANING TAXPAYERS ARE SHOULDERING THE BURDEN FOR 222 01:01:18.183 --> 01:01:36.016 SOME SERVICES LIKE OFFDUTY, FOR INSTCE, THAT COULD BE TRANSITIONED OFF OF THE GENERAL FUND AND INTO AN ACTUAL FEE TO COVER THE COST OF THAT PROGRAM. SO WE DO NOTE THAT COULD HAVE AN IMPACT WHEN WE'RE LOOKING, YOU KNOW, GOING FORWARD ON THE ACTUAL NUMBERS BUT I WILL NAME 223 01:01:36.016 --> 01:01:52.850 IN THE EMAIL WE WERE TOLD WE WILL GET AN UPDATE IN THE PRESENTATION. WE'VE BEEN TRYING TO GET THAT FOR SOME TIME. I HOPE IN 2 MONTHS WE WILL SEE A DEFINITIVE UPDATE SO AS WE KNOW WHEN WE HAVE CONVERSATIONS OF THE UPCOMING BUDGET AND THINGS OF THAT NATURE WHAT WE SHOULD BE 224 01:01:52.850 --> 01:02:10.516 ASSESSING AS ANOTHER WAY TO OFFSET RELIEF OR CHANGING OUR CEMENTS JUST WANT THAT UPDATE. THANK YOU. >> AND FINALLY I'LL RECOGNIZE COUNCIL MEMBER RAINVILLE. >> THANK YOU. ON SLIDE 21, YOU SHOW A DROP IN IT SALES IN IT 225 01:02:10.516 --> 01:02:26.350 USE TAX AND I'M JUST CURIOUS WHY DO YOU THINK THAT IS, PLEASE? >> TOUGH THE CHAIR COUNCIL MEMBER RAINVILLE ARE WE 226 01:02:26.350 --> 01:02:42.816 LOOKING AT THE 2026 REVENUE? >> SO I'M LOOKING AT THE 2024 AND THEN IT DROPS IN IT '25 AND CLEARLY COMES BACK IN '26. IT DOES SHOW MINIMAL GROWTH BUT I'M 227 01:02:42.816 --> 01:02:59.616 JUST WONDERING WHAT WAS -- WAS '24 JUST A REAY GOOD YEAR IS THAT WHAT IT WAS. >> THAT'S A GREAT QUESTION. I THINK WE CAN GET YOU A DEFINITIVE ANSWER IN WRITING. >> ALL RIGHT. THAT'S GOOD. OKAY. JUST -- I WANT YOU LET YOU KNOW I WAS PAYING ATTENTION. (LAUGH.) >> WONDERFUL. THANK YOU AND 228 01:02:59.616 --> 01:03:16.850 THEN I'LL RECOGNIZE VICE-CHAIR SHAFFER. >> I HAD SOME QUESTIONS AROUND JUST KIND OF SET THE TABLE. WITH THIS GAP OF 28 TO 33 MILLION WITH THE 5.4% ALREADY 229 01:03:16.850 --> 01:03:33.216 BAKED IN, ARE WE SAYING ROUGHLY IF WE WERE TO GO DIRECTLY FROM PROPERTY TAXES ONLY WITHOUT ANY EFFICIENCIES OR OTHER IDEAS IN IT REVENUE GROWTH, WE'D BE CLOSE TO 10% INCREASE IS THAT -- IF IT'S ABOUT 740 MILLION -- IS 230 01:03:33.216 --> 01:03:50.866 THAT ABOUT 1% INCREASE FOR EVERY 7ILLION -- WOULD THAT BE -- WHAT WOULD BE THE NUMBER LEVY -- THE LEVY NUMBER WITHOUT ANY EFFICIENCY OR REVENUE GROWTH. WITH THE GAP. >> CHAIR CHUGHTAI, VIOLATION 231 01:03:50.866 --> 01:04:07.883 CHAIR SHAFFER. I VOWED NEVER TO DO MATH AT THE PODIUM THE PROJECTED IS 574 MILLION AND SO 1% OTHAT YOU COULD CONSIDER A POINT ON THE LEVY. SO 5.7 MILLION WOULD BE A POINT. >> OKAY. ABOUT 6 INSTEAD OF, OKAY. ALL RIGHT. 232 01:04:07.883 --> 01:04:23.733 >> UH-HUH. >> ALL RIGHT. THAT'S HELPFUL. AND THEN, YOU KNOW, AS WE HEAD INTO THESE DISCUSSIONS INDIVIDUALLY IN OUR WARDS WITH MAYOR, OBVIOUSLY, THAT'S ALL TO BE HAPPENING BUT IS THERE ANY HIGH-LEVEL FROM THE STAFF'S 233 01:04:23.733 --> 01:04:38.550 PERSPECTIVE -- ARE YOU LEANING INTO EFFICIENCIES, ARE YOU LEANING INTO REVENUE? ARE YOU LEANING INTO THE LEVY? CAN YOU TELL ME WHERE STAFF ARE PAYING ATTENTION PRIMARILY? 234 01:04:38.550 --> 01:04:55.600 >> THROUGH THE CHAIR, VICE-CHAIR SHAFFER, I'M ALWAYS CAREFUL NOT TO GET AHEAD OF ANY -- >> YEA ABSOLUTELY. >> ANY DECISIONS BUT I THINK IT'S CLEAR AND THIS BODYLREADY HAD MANY CONVERSATIONS ABOUT THE OVERTIME PICTURE FOR OUR SAFETY 235 01:04:55.600 --> 01:05:13.083 DECISIONS WE'RE VERY INTERESTED IN FINANCE AND NOT CONTINUING TO SEE THE FUND BALANCE DECLINE AND SO THAT'S THE PRIMARY FOCUS OF OUR DEPARTMENT. THE BUDGET PROCESS WAS SET UP TO ALLOW DEPARTMENTS TO MAKE ASKS OF THE MAYOR AND SO THAT IS 236 01:05:13.083 --> 01:05:29.833 IMPORTANT, I THINK, AS HAVING THAT METHOD FOR DEPARTMENTS TO GET FEEDBACK FROM THE EXECUTIVE I THINK IS A VALUABLE EXERCISE EVEN IF HE HAS TO SAY NO TO MANY OF THE REQUESTS. REVENS ARE -- WE HAVE LITTLE WE CAN CONTROL THERE. WE 237 01:05:29.833 --> 01:05:47.850 WILL, OF COURSE, IF THERE ARE FEES THAT CAN BE INCREASED THAT WOULD BE BEFORE THIS BODY IN SEPTEMBER TYPICALLY. AND I SHOULD SAY THERE IS ALSO A HIGH-LEVEL EFFICIENCIES EFFORT TO LOOK AT -- TO LOOK AT SERVICES THAT WE MIGHT BASIE AB 238 01:05:47.850 --> 01:06:04.683 TO TRIM BACK OR CONDER HOW WE COORDINATE WITH OTHER JURISDICTIONS SO ALL OF THOSE FACTORS ARE SWIRLING BUT I WOULD SAY THE FINANCE DEPARTMENT MOST CONCERNED ABOUT FUND BALANCE AND RITING THAT SHIP. >> GREAT AND HOW WOULD IT BE MOST HELPFUL FOR STAFF TO HEAR FROM COUNCIL MEMBERS AROUND 239 01:06:04.683 --> 01:06:21.916 THEIR IDEAS AROUND THOSE BUCKETS. WOULD IT BE DEFECTED THROUGH THE MAYOR'S ONE-ON-ONE SHORT MEETING OR MAYBE GIVE YOU A LIST OF IDEAS. HOW WOULD YOU LIKE -- OR DO YOU WANT US TO HOLD OFF UNTIL AUGUST AND THEN DIG IN? YOU KNOW, BEING NEW, I THINK BE I JUST APPRECIATE WHAT IS HELPFUL WHAT IS NOT HELPFUL 240 01:06:21.916 --> 01:06:40.583 FROM THE CITY STAFF PERSPECTIVE. >> SURE. CHAIR CHUGHTAI, VICE-CHAIR SHAFFER, I THINK THOSE ONE-TO-ONES WITH THE MAYOR ARE REALLY THE BEST WAY FOR YOU TO SHARE THAT DIRECT FEEDBACK WITH THE MAYOR. YOU KNOW, STAFF TRIES TO NOT BE ADVOCATING FOR 241 01:06:40.583 --> 01:06:57.283 ONE POLICYMAKER OR ANOTHER BUT I THINK THAT'S A GREAT AREA TO DIG IN AND SHARE YOUR THOUGHTS SOME WE HAVE ROBUST INTERACTIONS WITH THE MAYOR OVER TH SUMMER AS WE'RE BUILDING THE BUDGET AND THE CONVERSATIONS YOU ALL HAVE WITH THE MAYOR DO TYPICALLY WIND UP IN OUR DECISION MEETINGS SO THEY DO MATTER SO I WOULD START 242 01:06:57.283 --> 01:07:12.883 THERE. I'M, OF COURSE, ALWAYS HAPPY TO HEAR IF THERE ARE THINGS THAT YOU WOULD WANT TO PRIORITI AND YOU CAN FEEL FREE TO EMAIL ME WITH THOSE. I'M HAPPY TAKE A LOOK TO GIVE FEEDBACK IF YOU WANT FEEDBACK. >> THANK YOU FOR THE 243 01:07:12.883 --> 01:07:29.050 PRESENTATION IT'S VERY INTERESTING AND I'LL LOOK INTO IT MORE CAREFULLY, AND JUST ANECDOLLY I'VE HEARD OUR CITY PARKING RAMPS ARE VERY LOW IN PRICE -- I'VE HEARD FROM COMPETITORS, YOU KNOW, THAT 244 01:07:29.050 --> 01:07:44.150 WE -- YOU GUYS ARE UNDERCUTTING US ALL THE TIME. SO THAT'S JUST ANECDOTALLY I'LL SHARE THAT. >> THANK YOU. AND THEN FINALLY I'LL RECOGNIZE COUNCIL MEMBER STEVENSON STEVE. 245 01:07:44.150 --> 01:07:59.616 -- COUNCIL MEMBER STEVENSON. >> THESE QUESTIONS MAY OR MAY NOT BE FOR STAFF. I THINK IT MAY BE FOR COLLEAGUES BUT THEY JUST BROUGHT UP QUESTIONS BASED ON WHAT I HEARD ON THIS PRESENTATION SO MAYBE YOU, CHAIR, MIGHT BE THE FIRST PERSON 246 01:07:59.616 --> 01:08:16.616 TO TAKE A STAB AT THESE. IT WAS MENTIONED THAT DEPARTMENTS HAVE TO ASKED FOR ADDITIONAL OVERTIME. THAT'S NOT BEEN MY EXPERIENCE ON MY SHORT EXPERIENCE. CAN YOU TELL ME ABOUT THAT? >> I ACTLLY -- I DON'T THINK THAT'S WHAT THE -- THAT'S WHAT 247 01:08:16.616 --> 01:08:34.450 STAFF WAS SHARING. WHAT STAFF WAS SHARING WAS OVERTIME COSTS ARE NOT BUILT INTO THE CURRENT SERVICE LEVELS ASSUMPTIONS ABOUT GROWTHEAR AFTER YEAR AND THAT FINANCIAL POLICIES DICTATE THAT CHANGES TO OVERTIME BUDGETED 248 01:08:34.450 --> 01:08:51.216 COSTS -- BUDGETED COSTS MUST BE BROUGHT BEFORE DECISION-MAKERS AS PART OF THE BUDGET PROCESS EVERY YEAR SO THEY -- WE HAVE TO RE-ASSESS THEM IN A WAY THAT -- THAT ISN'T -- THAT DOESN'T ASSUME GROWTH OVER TIME. JANE DID YOU WANT TO ADD 249 01:08:51.216 --> 01:09:07.150 ANYTHING TO THAT. >>HAIR CHUGHTAI, I AGREE WITH THAT ASSESSMENT. I THINK THE DISTINCTION THE BUDGET VERSUS THE ACTUALS, SO THE FINANCE DEPARTMENTS SIMILARLY DOES NOT HAVE A STOP WHERE WE SAY: OKAY. THE POLICE DEPARTMENT HAS SPENT "X" THIS MONTH AND THEN THEY'RE 250 01:09:07.150 --> 01:09:22.216 DONE I THINK IS WHAT YOU'RE DRIVING AT. >> OKAY. ANOTHER QUESTION THAT IS NOT FOR STAFF BUT MAYBE FOR MY COLLEAGUES JUST TO HELP ME UNDERSTAND AND I'D LIKE IT IF WE COULD ALL HEAR IT AT THE SAME TIME. WHAT ARE OUR POWERS 251 01:09:22.216 --> 01:09:39.416 AROUND BUDGET DEVIATION GUESS? -- DEVIATIONS? >> THAT'S THE MILLION-DOLLAR QUESTION. (LAUGH.) >> $2 BILLION QUESTION. >> YEAH, THAT'S FUNNY. HA-H HARKS -- HA-HA. GENERALLY SPEAKING I THINK OURINANCIAL 252 01:09:39.416 --> 01:09:59.050 POLICIES OUTLINE THE -- THE LEVERS OF CONTROL THAT ARE -- THAT DIFFERENT ACTORS ARE EMPOWERED TO UTILIZE WHETHER THAT'S THE COUIL, WHETHER THAT'S FINANCE STAFF, BUDGET 253 01:09:59.050 --> 01:10:16.300 STAFF, ET CETERA. THE -- CHAPTER 9 OF THE CITY'S CHARTER OUTLINES ALL THE DIFFERENT FINANCIAL RESPONSIBILITIES OF THE CITY AND GIVE US MOST OF 254 01:10:16.300 --> 01:10:33.450 THOSE TO THE CITY COUNCIL WITH THE SIGNIFICANT EXCEPTION OF THE PROPOSING OF THE ANNUAL BUDGET THAT LIES WITH THE MAYOR. THE COUNCIL ADOPTS THE 255 01:10:33.450 --> 01:10:50.533 ANNUAL BUDGET EVERY YEAR AND BUDGETS ARE MANAGED BY DEPARTMENTS. THE MANAGEMENT OF DEPARTMENTS HAPPENS AT THE EXECUTIVE LEVEL. >> OKAY. >> JUST ON A VERY HIGH-LEVEL IN AN ATTEMPT TO ANSWER THAT. 256 01:10:50.533 --> 01:11:07.150 >> NO ISSUE THAT. COULD I ACTUALLY ASK THE SAME QUESTION TO THE ATTORNEY. WHAT ARE OUR POWERS AROUND BUDGET DEVIATIONS? >> I THINK -- YEAH, JUST KEEP IN MIND THAT YOU'RE NOT GOING TO BE ABILITY -- >> CORRECT. >> THROUGH THE CHAIR, THAT'S 257 01:11:07.150 --> 01:11:22.500 JUST KIND OF AN IMPOSSIBLE QUESTION TO ANSWER IN GENERAL. YOU KNOW, EACH TIME ERE'S A BUDGET AMENDMENT THAT COMES IN, YOU KNOW, THAT'S SOMETHING IN THE BUDGET PROCE THE CITY'S ATTORNEY'S OFFICE ALONG WITH STAFF ALONG WITH POLICYMAKERS 258 01:11:22.500 --> 01:11:38.350 EVALUATES AND WE DETERMINE, YOU KNOW, ON A CASE-BY-CASE BASIS, YOU KNOW, HOW THAT'S GOING TO WORK SO IT'S NOT SOMETHING THAT'S VERY EASY TO JUST KIND GIVE AN ANSWER TO, YOU KNOW, FROM THE DAIS, YOU KNOW, IN A SHORT WAY. 259 01:11:38.350 --> 01:11:56.750 >> OKAY. ALL RIGHT. THANK YOU. I JUST REALLY WANTED SOMEBODY TO TELL ME THAT THERE ARE NO RULES OUT IN PUBLIC SO THANK YOU FOR -- FOR HUMORING ME. >> LOTS OF RULES ACTUALLY. 260 01:11:56.750 --> 01:12:14.550 SOUNDS GOOD. I'M NOT SEEING ANY FURTHER -- NO, WE ARE SEEING FURTHER DISCUSSION. IS THAT THE PRESIDENT IN QUEUE. COUNCIL PRESIDENT PAYNE? >> THANK YOU, I WAS GOING TO 261 01:12:14.550 --> 01:12:30.850 TA ANSWER COUNCIL MEMBER STEVENSON'S QUESTION ANDHAT'S THE PUBLIC AND THEIR RELATIVE ENGAGEMENT WHAT WE DO HERE AND WHETHER OR NOT THEY ARE OUTRAGED OR SUPPO SUPPORTIVE OF IT. THAT POLITICAL PRESSURE DRIVES EVERYTHING ELSE; RIGHT? THE AUTHORITY TO MAKE SURE THAT A DEPARTMENT DOESN'T OVERSPEND IS 262 01:12:30.850 --> 01:12:47.416 SOLELY WITH THE MAYOR. IT'S DE HIERARCHY. IT'S THE DEPARTMENT HEAD THAT'S RESPONSIBLE FOR MANAGING THAT BUDGET. IT'S INDIVIDUAL FRONT WORKERS TO MANAGE THEIR SCHEDULES AND THE SUPERVISORS TO MANAGE THEIR SCHEDULES BUT WN THINGS ARE 263 01:12:47.416 --> 01:13:05.216 OUT OF CONTROL, THAT ALL IS UNDER THE AUTHORITATIVELY OF THE MAYOR AND IT IS THE OUTRAGE OF THE PEOPLE AT WHETHER OR NOT THAT IS UNDER CONTROL OR NOT UNDER CONTROL THAT LEADS TO BEHAVIOR CHANGE AND CONSEQUENCES. OFTENTIMES THOSE CONSEQUENCES ARE ELECTORAL. WE 264 01:13:05.216 --> 01:13:21.016 JUST HAD AN ELECTION ON SO IT'S JUST A MATTER IF PEOPLE ARE UPSET ABOUT THE WAY THE MONEY IS BEING DAY-TO-DAY MANAGED. WE NEED TO HE ABOUT IT AND SPECIFICALLY THE MAYOR NEEDS TO HEAR ABOUT IT WHEN IT COMES TO MANAGING TO THAT BUDGET. WE GET TO SET THE BUDGET. WE'RE THE AUTHORITATIVELY THAT 265 01:13:21.016 --> 01:13:35.483 SETS THAT BUDGET BUT -- WHEN IT COMES TO THE DAY-TO-DAY MANAGEMENT OF THAT BUDGET, THE ULTIMATE AUTHORITY IS WITH THE MAYOR AND THE ONLY THING THAT CAN AFFECT THAT IS THE RELATIVE 266 01:13:35.483 --> 01:13:54.416 ENGAGEMENT OF THE RESIDENTS OF MINNEAPOLIS. >> COUNCIL MEMBER WONSLEY. >> THANK YOU, CHAIR CHUG. -- CHAIR CHUGHTAI WILL SPEAK IN OUR WHEELHOUSE FINANCIAL POLICIES THAT'S AN AREA WHERE MYSELF AND I KNOW COUNCIL MEMBER CHUGHTAI -- WE HAVE BROUGHT 267 01:13:54.416 --> 01:14:09.250 FORWARD FINANCIAL POLICY CHANGES TO REALLY DEEPEN OVERSIGHT OVER WHAT WHAT FEELS TO BE A CONTINUED MISMANAGEMENT OF OUR CITY'S RESOURCES AT ITS MOST 268 01:14:09.250 --> 01:14:26.016 BASELINE IN THE CITY ADMINISTRATION, AND E OF THE FRUITS OF THAT IS WE PASSED THE POLICY AMENDMENT LAST DECEMBER THAT SAYS AS IT RELATES TO ANY COUNCIL APPROPRIATIONS, THOSE IMPLEMENTS -- THOSE IMPLICATIONS OF THOSE OR IF THERE'S ANY CHANGES THE ADMINISTRATION WANTS TO MAKE TO 269 01:14:26.016 --> 01:14:42.683 NOT IMPLEMENT ANY, YOU KNOW, CO AMENDMENTS THEY NEED TO COME BEFORE THIS BODY AND ASK FOR OUR APPROVAL OR FOR A DENIAL ESSENTIALLY 'CAUSE WHAT WE HAVE SEEN FAR TOO OFTEN IS WE WILL MAKE BUDGET AMENDMENTS AND THEN THEY WILL NOTE IMPLEMENTED AND 270 01:14:42.683 --> 01:14:59.916 THEN THEY WOULD BE ROUTED TOWARDS OTHE CITY PROGRAMS. I CAN THINK OF SEVERAL EXAMPLES. ONE BEING SIDEWALK FUNDING. WE ALLOCATED THAT IN 2023 AND LEARNED MONEY FROM THAT WAS TAKEN TO ANOTHER PROGRAM AND 271 01:14:59.916 --> 01:15:15.850 THAT WAS NOT IN ALIGNMENT OF THE BUDGET AMENDMENT AND WE HAD TO DO ANOTHER ONE TO SAVE THAT AS WELL AS SAFETY AMBASSADORS. THAT TOOK A WHILE TO GET THAT IMPLEMENTED AND WE DID A BUDGET AMENDMENT IN 2023 FOR THAT. THOSE ARE ONE OF THE AREAS WHERE WE HAVE BEEN ABLE TO TRY TO 272 01:15:15.850 --> 01:15:31.933 STRENGTHEN OUR OVERSIGHT. AT LEAST ON THE BUDGET AMENDMENT PROCESS SO THAT THE RESOURCES THAT WE'RE MOVING TO GET THE NEEDS OF OUR RESIDENTS MET -- THAT -- THEY'RE ACTUALLY BEING ENACTED, AND I WOULD JUST WANT 273 01:15:31.933 --> 01:15:49.583 TO HIGHLIGHT THAT AS AN EXAMPLE WHAT ARE SOME OF THE FINANCIAL POLICIES THEIR LEGISLATIVE BRANCHES HAVE UTILIZED TO MAKE SURE RESOURCES ARE GOING WHERE THEY ARE INTENDED TO GO AND USE THAT AS A BASELINE TO LOOK AT HOW WE CAN REVISIT OUR FINANCIAL POLICIES HERE AS LIKE A 274 01:15:49.583 --> 01:16:06.350 LEGISLATIVE CONVERSATION. >> WONDERFUL. WITH THAT I'LL ASK THE CLERK TO FILE THAT PRESENTATION. THANK YOU AGAIN TO STAFF FORRINGING THAT FORWARD TODAY. AND WITH THAT WE'VE CONCLUDED ALL BUSINESS TO COME BEFOREHE COMMITTEE TODAY AND WITHOUT OBJECTION, WE STAND 275 01:16:06.350 --> 01:16:16.566 ADJOURNED. THANK YOU, EVERYONE.