City of Minneapolis, MN 2018 Minneapolis City Council and Committee Meetings, 17 Jul 2018

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From YouTube: July 17, 2018 Ways & Means Committee

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Minneapolis Ways & Means Committee Minnesota

A

Good afternoon, everyone I will call this regularly scheduled meeting of the Ways and Means Committee to order I'm councilman Babb diversity, the chair of the committee and with me on the diocese councilmember Cunningham councilman, Johnson, councilmember, Fletcher and councilmember Palmisano. We are a quorum of the committee and therefore conduct committee business. Today we have 16 items, consent and I will go through them. One is legal settlement claim of Thomas J. Mac second item is a legal settlement claim of Andre. Cero third is a lease leases for early voting centers for 2018 elections.

A

Fourth item is a contract amendment with messenger Construction, Company Inc for contract closeout regarding the Convention Center drinking fountains or replacement project. The fifth item is a gift acceptance for the city staff travel expenses to Ann Arbor Michigan in September. 2018 sixth item is a contract amendment with Mavericks Global Inc for ethics report line services.

A

The seventh item is a temporary step increase for principal policy. Aide position in the mayor's office item number: eight is their staff purchasing letters and joint powers. Letters report for the month of May 2018 item number eight is a grant from Minneapolis downtown Improvement District for street outreach. I, remember: 10 is a contract with tool, design, group or vision, 0 action plan. Item number 11 is a position of land from Hennepin County for a stormwater holding pond I.

A

Remember 12 is a contract amendment with uragan constructions, company for Nicollet, Mall, art restoration, Idol number 13 is a metro, Blue Line extension light rail transit, LRT project master funding agreement. Item number 14 is a bid for installation of larger diameter cured in place. Pipe Idol number 15 is a 28th Avenue South Street reconstruction project, approval assessment and error area way. Abandonment item number 16 is a grant from Hennepin County for public recycling containers and those are our consent items I'll move all these items were approval.

A

Is there any discussion from my colleagues were so warm no discussion so I'll move approval of these items, all those in favor say aye aye, those against the items have been approved and we have one discussion item today, which is the budget update and we have our budget director Micah welcome. Sir. Thank.

B

You very much, sir, we're sorry for the record Micah inter Mel, the budget director here for the city, so I wanted to provide just a quick financial context, update for where we are with the 2019 budget and also I know. The chair was interested in just a brief overview on our calendar for the next five months or so, as we get this wrapped up in a nice neat package.

B

So as a reminder, the 2018 budget that we adopted last December included a five-year financial direction that assumed a five point: six five percent increase to the levy just to maintain current service levels and fulfill the a few ongoing commitments. So any new programmatic changes would be above and beyond that five point: six: five percent absent any additional revenues or other cuts in different programs. So that's that's!

B

Our baseline I've been the mayor's to ask that I share with you the proposals that have come forward from departments- and you know the bullet point here says the department's have shown a lot of needs and I think that that's there are a few reasons, one you know we're growing as a city and there are additional services required as as a result of that, but also, as we see policy not happening at the federal and state level.

B

That's pushed down to the local level and I think I've heard from some of you that you feel that pinch as well. So in total we see 62 million dollars requested across all funds for the new operating budget spending, 18 million of that one time in the general fund.

B

So in total, if we were to add all of that, 18 million plus the current service level we'd be at about a 12 percent property tax levy increase not suggesting that that's what the council should adopt, but rather just providing some context.

B

In addition, the last bullet point here shows that, for a capital, budget departments have requested one little over a billion for capital spending over the next five years, and all of that is available online as well. So.

B

We talked a lot about property tax and the levy increase, but as a reminder that makes up only about 23% of our total city budget or about 40% of the general fund. So the rest comes from fees that we charge local government aid, a lot of its utility utility charges and debt that we take on absent. Any changes to those other sources are non property. Tax revenues and general fund are only said to increase 1%, and so that's that's why we're so reliant on a larger of five and a half to five point. Six.

B

Five percent change on the property tax levy is because you know our the the non property tax revenues aren't keeping pace with inflation.

B

So the third bullet point here there is a recommendation forthcoming to the that we increase those non property tax revenues, so some of our business licensing, the health inspections, rental licensing in order to help contain that property, tax levy increase and then the last bullet point here we do in the budget.

B

We also include a five-year projection on where utility rates are set to go and for 2019 the projection was a little over 4% for the average resident any questions on the fiscal context, so on August 15th about a month from now, the mayor will present his recommendation weighing those factors and in others, on August 27th.

B

Two weeks later, we'll present an overview of the major changes that are included in the mayor's budget, as well as the impacts on the property tax levy a few weeks after that will give an overview on why, where the current service level is growing and what we're seeing there in terms of our our inflationary increases to spending in the city, as well as some more discussion about the non property tax revenues that I just highlighted in September and October departments, will come forward to the budget committee of which you're all apart and councilmember Palmisano chairs.

B

To talk about the mayor's recommendation for their individual departments on November 28th. We have the first of two public hearings on the budget, referred to as the truth and taxation hearing where residents can come and give feedback on the property tax levy itself.

B

November 30th is a session for the budget committee to meet and markup make changes to the mayor's recommendation and finally, December 5th is the second of two public hearings and adoption of the 2019 Buffett.

A

House Johnson Thank.

C

You mr. chair and thank you, mr. interval I have a question on the current based levy and the amount of requests that have been put in I'm just curious. If and I know, you know the mayor evident just as every mayor obviously goes through. Those requests very carefully and there's just can't support every request. Just because of all of the counter-pressure of you know the limits of how much property taxes can we reach or can be raised in the impacts of raising them.

C

But I am curious what that translates to into a levy increase in terms of the total number over request. So if.

B

C

B

As a percent, 18 million dollars in ongoing spending itself would equate to about five and a half percent on top.

C

Of the five point, six five percent exceed.

B

About six percent, so in total, we'd be looking at about a twelve percent overall increase if all of the ongoing general fund requests were funded and there were no changes to non property tax revenues, gotcha.

C

Thank you. That's very helpful context and I think kind of gives us an idea of the ceiling of requests. So I appreciate this presentation. Thank You, Samantha.

A

D

Thank You mr. chair I'm a couple of questions. One: can you give just the short version of why maintaining the status quo involves a five point: six five percent levy increase. What are the costs that are continually putting upward pressure on on the city budget and then the other thing I'm wondering about is given the assessments now that we know the sort of total property universe that we're talking about. What's the rate of levy increase, that I would need to make in order to hold our tax rate steady from year to year, so to.

B

The first question I think that our our inflationary pressures are similar to any other large public or private entity, so that health care costs and wages rising.

B

We see increasing pressures and some of the internal services that we provide our fleet and IT are both a couple of areas that have put some upward pressure on our costs generally. But again, since that the projected increase in the non property tax revenues is only one percent. Our our assumed level of inflation on our current service level is about three and a half percent. So that's why? Then, the property tax levy has to pick up more of the inflation, since those non property tax revenues are so flat.

B

So that's why that's the dynamic at play there in terms of the effect of the current assessments on the property tax levy for next year, I think it's too early to tell I'll turn to our CFO and see if he has anything to add to that. But we will have some preliminary information to answer that question. Hopefully soon after the mayor's budgets release.

A

Thank you very much any other questions or comments. My colleagues, okay, seeing none. Thank you very much. Micah and I'll make a motion to receive and file this update, all those in favor all those against all right. Thank you very much that motion passes and, having concluded the committee's business, we are.