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From YouTube: September 14, 2020 Budget Committee
Description
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B
Good
morning
my
name
is
lenny
palmisano,
I'm
the
chair
of
the
budget
committee
and
I'm
going
to
call
to
order
this
regular
committee
for
monday
september
14th.
Before
we
proceed.
I
will
note
for
the
record
that
this
meeting
has
remote
participation
by
council
members
and
city
staff
as
authorized
under
the
provisions
of
minnesota,
open
meeting
law,
section
13
d
.021
due
to
the
declared
state
of
local
public
health
emergency.
C
A
D
D
D
D
A
B
Member
jamal
osmond
is
also
here.
Thank
you,
council,
member.
B
B
Item
number
two
is
the
overview
of
that
budget
presented
to
us
by
the
budget
office
after
we
dispense
with
that
presentation
and
discussion,
I
will
lay
out
our
schedule
going
forward
to
consider
and
amend
mayor
frye's
budget
proposal,
but
first
I'll
invite
micah
intermil
our
city's
budget
director
to
give
his
presentation
welcome.
Mr
intermil.
C
This
year
has
been
a
challenging
and
complicated
year
for
city
budgeting
processes.
You
all
have
heard
from
me
a
lot
about
the
current
year
budget
and
we
even
had
more
conversation
at
the
beginning
of
this
year
than
in
years
past
about
the
rollover
process.
That
is
the
process
of
reappropriating
project
dollars
from
last
year's
budget
that
went
up
unspent
because
even
in
the
best
of
years,
it's
sometimes
challenging
to
remember
how
the
budget
process
unfolds.
I
hope
you'll
agree
that
it's
good
to
start
at
the
beginning
and
walk
through
the
city's
budget
framework.
C
Each
year
we
start
with
calculating
the
cost
of
the
current
service
level,
which
I'll
go
to
in
detail
on
24.
I
will
go
into
detail
on
for
2021
in
the
coming
slides.
Then
the
mayor
meets
with
departments
to
determine
what
changes
he
or
she
may
want
to
make
in
recent
years.
These
have
been
adds
to
the
current
service
level,
and
this
year
we
will
see
both
ads
and
subtractions.
C
C
C
Each
year
we
calculate
the
current
service
level
for
each
department
and
program
by
summing
up
the
calculated
costs
of
personnel
for
the
next
year,
adding
in
the
cost
of
internal
services
provided
and
layering.
On
top
of
that,
any
non-personnel
based
funding
for
programs
or
operations
next
slide.
Please.
C
C
The
calculated
personnel
costs
included
in
the
current
service
level
are
based
on
the
current
roster
of
employees
and
any
approved
vacant
positions.
Each
year
in
march,
the
budget
office
reviews
that
current
roster
and
applies
step
progression,
cost
of
living
adjustments,
anticipated
increases
to
health
insurance
costs
and
any
changes,
if
any,
to
para
rates.
That
is,
the
public
employee
retirement
association
to
create
an
estimate
for
the
payroll
costs
of
each
employee
for
the
following
year.
C
This
is
lower
than
the
three
percent
growth
assumption
included
in
our
five-year
financial
direction,
and
that
savings
is
a
direct
result
of
a
change
in
methodology
in
calculating
wage
growth
for
this
year
in
prior
years
last
night,
please,
in
prior
years
we
would
generate
an
assumed
payroll
cost
for
each
job
classification.
C
In
doing
so,
we're
able
to
take
into
account
the
precise
cost
of
step
progression
and
health
care
elections
in
a
way
that
saves
the
general
fund,
roughly
six
million
dollars
in
this
year's
budget
also
of
note
this
year
because
of
continued
positive
experience
with
our
movement
to
self-insurance
for
medical,
the
city's
health
insurance
premium
costs
are
increasing
by
just
1.7
percent.
This
compares
to
increases
in
the
high
single
to
low
double
digits
in
the
not
too
recent
past.
C
Lastly,
it's
important
for
me
to
mention
that
the
calculated
personnel
costs
were
recalculated
in
early
august
this
year
to
incorporate
changes
made
during
the
2020
revised
budget
process.
This
includes
the
movement
of
several
positions
out
of
the
minneapolis
police
department
and
into
the
city
clerk
and
communications
departments.
C
C
These
are
monies
paid
by
city
departments,
to
city
departments
in
exchange
for
the
provision
of
business
type
activities
such
as
our
civil
legal
services,
our
I.t
department,
rents,
paid
fleet,
etc
costs
increase
or
decrease
in
the
in
current
service
level
allocations
only
when
the
costs
of
the
given
service
increase,
so
just
as
with
external
businesses,
internal
business
operations
calculate
their
anticipated
expenses
from
one
year
to
the
next
and
develop
a
cost
allocation
model
to
recover
monies
to
cover
those
expenses.
C
Just
to
be
very
clear.
These
are
not
money
making
enterprises
for
the
city
and
we
we
do
our
level
best
to
hold
those
hold
the
the
growth
of
those
costs
down.
But
when
the
cost
of
doing
business
increases,
the
cost
of
the
charges
increases.
Well,
some
examples,
as
noted
on
the
slide
include,
you
know,
increases
to
various
maintenance
contracts
for
it
systems
or
as
heating
and
cooling
expenses
grow
for
our
buildings.
Those
expenses
are
passed
along
to
the
customer
departments
in
the
city
next
slide
this
year.
C
Internal
cost
allocations
are
growing
by
approximately
four
percent
or
three
million
dollars
in
the
general
fund.
This
growth
matches
the
assumption
included
in
the
five-year
financial
direction,
and
it's
actually
the
the
first
of
the
last
several
years
that
the
growth
here
has
matched
the
assumed
assumed
growth
in
the
five-year
financial
direction
in
the
past
several
years,
it's
been
exceeding
that
assumption,
and
so
all
of
our
internal
service
providing
departments,
particularly
public
works
fleet,
has
done
a
good
job
of
controlling
costs
this
year
for
the
current
service
level.
C
Unfortunately,
as
with
most
of
our
colleagues
across
the
enterprise,
our
work
plans
for
the
year
went
out
the
window.
In
march,
we've
not
been
able
to
develop
deep
prop
to
make
deep
progress
on
illuminating,
the
specifics
of
each
dollar
in
the
base.
We
will
continue
that
endeavor
next
year,
however,
we
can
say
with
certainty
that
base
dollars
only
exist
because
they
were
put
there
at
one
point
by
the
council
base
dollars
include
two
distinct,
equally
important
categories
program
dollars,
those
necessary
to
deliver
a
given
program
or
department
submission.
C
Typically,
those
dollars
are
used
for
and
in
community,
whether
through
contracts
for
services
or
direct
grant
and
aid
and
discretionary
operating
expense.
These
are
monies
used
to
run
the
operations
of
the
enterprise
similar
to
other
private
or
public
entities,
and
include
categories
such
as
travel,
training,
membership,
subscriptions,
etc.
Anytime,
the
council
includes
an
ongoing
change
item.
The
non-personnel
dollars
included
are
added
or
subtracted
in
the
next
year's
base.
C
In
most
years
the
non-personnel
base
does
not
grow,
and
this
is
because,
as
I
mentioned
before,
the
base
is
set
by
the
ongoing
changes
incorporated
by
council.
2021
is
slightly
different,
however,
as
non-personnel
dollars
are
growing
by
roughly
one
percent
or
half
a
million
dollars.
C
This
is
due
to
some
cleanup
work
performed
by
my
staff
to
identify
persistent
vacancies
held
open
from
year
to
year
by
departments
in
order
to
get
garner
salary
savings
in
each
of
the
past
three
years.
We've
heard
concerns
from
council
members
about
this
practice.
So
in
an
effort
to
get
ahead
of
the
question
this
year,
we
worked
with
departments
to
make
those
structural
changes
where
they
made
sense
in
the
2021
base.
C
Next
slide,
please
in
total
the
2021
current
service
level,
expenses
and
transfers,
which
this
year,
those
transfers
equal,
18.5
million
dollars,
come
to
about
525
million
dollars.
As
the
mayor
mentioned
in
his
address
on
august
14th,
because
some
of
some
of
the
revenue
changes
I'm
about
to
discuss,
this
would
have
required
an
increase
to
the
property
tax
levy
of
roughly
50
million
dollars
to
cover
in
full.
C
B
Mr
intermittent,
could
we
just
pause
for
a
brief
second
and
for
any
questions
about
the
previous
slides
consul?
I
will
note
for
the
record
that
council,
member
goodman
has
joined
us
and
I
will
call
on
councilmember
cunningham.
E
Thank
you,
madam
chair,
and
thank
you
director
intermel.
I
wanted
first
to
just
say
how
much
I
appreciate
the
work
that
went
into
changing
the
methodology
that
saved
a
good
chunk
of
money.
So
thank
you
for
that,
as
well
as
the
structural
changes,
both
of
those
are
much
appreciated.
E
I
had
a
question
specifically
around
the
internal
cost
allocation.
I
know
that
there
are,
you
know,
there's
the
wrench
and
the
various
heating
and
cooling
costs
have.
Has
there
been
any
calculations
around
how
that
will
change
when
the
new
public
service
center
is
up
and
running.
C
Chair
palmisoni,
councilmember,
cunningham,
that's
a
good
question
and
in
in
general
I
don't
have
specific
numbers
off
the
top
of
my
head,
but
in
general
the
the
costs
of
running
the
new
public
service
building
are
supported
by
the
elimination
of
outside
leases,
and
so
we
have
that
was
sort
of
part
of
the
the
whole
philosophy
behind
the
new
public
service
building
was
consolidating
city
staff
into
primarily
two
buildings:
those
who
work
downtown
into
primarily
two
buildings.
C
So
we
are
shedding
those
outside
leases,
so
we
don't
have
those
costs
and
instead
those
monies
are
being
put
towards
running
our
own
public
service
center,
and
so
there
there
is
not
a
a
noticeable
increase
in
expense
related
to
operating.
That
facility.
C
In
in
terms
of
what
we
had
been
paying
for
previously
and
what
we
will
be
paying
for
in
the
future,
yes,
we
we
expect
those
to
be
pretty
comparable.
Of
course,
we
have
debt
service
costs
associated
with
the
borrowing
that
we
did
for
the
new
building
and
and
those
are
being
supported
as
you'll
see
later
on.
C
In
the
presentation
there
we
had
been
levying
for
a
referee,
there
was
a
referendum
to
add,
take
debt
on
to
support
the
library
system
that
debt
is
going
away
and
instead,
it's
being
repurposed
to
pay
for
this
new
building,
but
in
total
on
net.
Looking
at
the
at
the
program,
there's
not
a
a
significant
increase
in
costs.
C
C
C
These
self-supporting
operations
rely
on
services
performed
by
the
general
fund
functions
such
as
human
resource
finance,
neighborhood
and
community
relations,
the
city
clerk
and
others,
and
they
pay
the
general
fund
for
those
services
accordingly,
just
as
the
general
fund
pays,
the
internal
service
funds
for
the
services,
they
provide
the
internal
service
and
enterprise
funds
pay
into
the
general
fund
for
the
services
it
provides
them.
C
The
licenses
and
permits
category
is
largely
driven
by
construction
permit
and
business
licensing
activity,
though
the
construction
permit
activity
in
particular,
has
remained
robust
through
the
pandemic.
We
do
anticipate
some
level
of
cooling
in
that
market
next
year.
It's
important
to
keep
in
mind
that
the
expenses
in
this
area
generally
lag
the
revenues
by
anywhere
between
one
and
three
years.
This
is
because
fees
are
paid
when
permits
are
issued
prior
to
a
given
project's
commencement
and
inspection
activity
is
performed
after
the
project
is
complete.
C
Special
assessments
are
set
to
increase
by
1.2
million
dollars
and
21
in
2021.
This
is
due
to
the
full
dissolution
of
the
regulatory
services
revolving
fund,
which
has
been
used
since
the
great
recession
to
collect
revenues
and
expenses
primarily
related
to
nuisance
abatement,
work
in
and
around
residential
properties.
C
Several
years
ago,
regulatory
services
identified
a
problem
of
structural
imbalance
in
that
fund.
They,
along
with
finance
and
policymakers,
will
have
fully
solved
that
problem
with
all
activity
previously
contained
in
the
regulatory
services
revolving
fund,
integrating
fully
into
the
general
fund
in
2021.
C
That
brings
1.2
million
dollars
of
special
assessment
revenue,
as
well
as
an
equal
amount
of
offsetting
expense
to
the
general
fund.
Next
year,
miscellaneous
revenues
will
be
down
next
year,
largely
related
to
fewer
dollars
collected
associated
with
the
recapture
of
loans
unpaid
in
cped
interest.
Earnings
will
be
down
due
due
to
the
anticipated
continued
recession
environment,
we're
in
and
excluding
local
government
aid.
Our
revenues
from
the
state
will
be
similar
in
2021
to
what
we
saw
in
2020..
C
The
source
of
those
aids
that
municipal
state
aid
is
the
state's
gas
tax
and,
as
the
gas
tax
goes
up
or
down
those
municipal
state
aid,
monies
increase
or
decrease
because
of
the
decreased
use
of
vehicles.
In
this
pandemic,
the
gas
tax
revenues
have
decreased.
Therefore,
municipal
state
aid
decreases
the
largest
decline
that
you
see
on
this
slide,
though,
fall
in
two
areas:
local
government
aid
and
transfers
in
the
amount
of
local
government
aid
each
jurisdiction
receives
in
a
given
year
is
dependent
on
one.
C
The
total
amount
of
local
government
aid
provided
by
the
state
and
two
a
regression
formula
that
estimates
local
need.
Local
government
aid
was
built
to
be
a
relief
valve
on
property
taxes,
so
the
formula
assumes
as
a
jurisdiction's
property
values
increase
its
needs
for
relief,
decrease
minneapolis
has
grown
impressively
over
the
past
several
years.
This
growth
has
outpaced
the
growth
scene
in
other
jurisdictions,
so
the
formula
tells
state
lawmakers
that
our
need
is
less.
C
Our
intergovernmental
relations
team
tried
to
find
a
solution
to
this
problem
last
legislative
session,
but
as
it
was
a
short
and
distant
session,
unfortunately,
a
solution
did
not
materialize.
As
a
result,
our
local
government
aid
will
decrease
by
just
under
four
million
dollars
or
five
percent
in
2021,
and
that
brings
us
to
the
transfers.
In
each
year.
We
plan
for
transfers
in
from
two
primary
sources:
the
parking
fund
and
the
downtown
assets
fund
in
2021.
The
parking
fund
will
transfer
the
parking
fund
transfer
will
proceed
as
planned.
C
The
downtown
assets
fund
transfer,
however,
will
not
the
downtown
assets
fund
transfer
consists
of
the
transfer
of
entertainment
taxes,
which
can
be
paid
which,
by
state
law,
can
be
used
for
any
purpose
and
the
transfer
of
other
local
taxes
which
under
state
law,
can
be
used
to
support
economic
development
activities
and
capital
improvements.
Only
we
project
that
our
local
taxes
will
continue
to
be
depressed
next
year,
due
to
the
continued
social
distancing
impacts
of
the
pandemic,
noticeably
the
prohibition
of
large
gatherings
in
our
five-year
financial
direction.
C
C
As
you
see,
the
non-property
tax
owned
fund
revenues
to
the
general
fund,
those
shown
in
light
blue
remains
stable
from
2020
into
2021
transfers
in
and
other
revenues,
which
includes
local
government
aid
and
the
transfers.
I
just
mentioned
those
dollars
shown
in
orange
shrink
noticeably
and,
as
a
result,
property
tax
revenues
need
to
increase
to
support
the
level
of
spending
previously
discussed.
C
So.
In
total,
our
current
service
level
expenses
exceed
our
available
revenues,
including
the
5.75
increase
to
the
property
tax
levy
recommended
by
the
mayor
by
between
26
and
27
million
dollars,
absent
these
cuts.
The
levy
would
have
needed
to
grow
by
another
eight
percent
or
more
in
order
to
balance
our
budget
cuts
are
needed.
C
The
budget
office
is
working
with
the
mayor
and
departments
to
finalize
documentation
of
those
cuts,
and
we
anticipate
that
documentation
to
be
ready
for
your
review.
One
week
from
tomorrow
on
september,
22nd
work
has
been
done
to
minimize
the
impacts
of
the
cuts,
but
cuts
are
never
without
pain,
as
I
mentioned
earlier
this
year.
With
respect
to
the
cost
containment
measures
put
into
place
through
the
2020
revised
budget,
we
cannot
expect
to
get
the
same
amount
of
work
done
with
significantly
fewer
resources
available
to
do
that
work.
C
At
the
same
time,
many
of
the
same
needs
present
in
our
city
prior
to
the
pandemic,
and
civil
unrest
persist.
You
all
and
the
mayor
have
been
clear
in
the
need
to
continue
investing
to
help
solve
some
of
those
problems,
in
particular
those
around
affordable
housing,
economic
inclusion
and
public
safety.
C
C
So
next
I'll
walk
you
through
the
changes
to
the
property
tax
levies
recommended
by
the
mayor
and
then
spend
our
remaining
time
talking
through
the
impacts
of
those
taxes
on
minneapolis
next
slide.
C
C
C
B
I
see
I
thought
it
was
just
me
here,
let's
just
pause
for
a
second
and
see
if
we
can't
get
him
back
online.
A
B
Cj
it
does
say
that
his
internet
died.
He
just
sent
me
a
text
message.
So,
let's
see,
let's
give
him
just
a
minute
to
call
back
in.
E
C
For
those
technical
difficulties,
so
I
was
just
I
I
think
I
was
just
discussing
the
debt
levy.
C
The
debt
levy
is
increasing
in
accordance
with
plan
levels
and
also
to
accommodate
a
slight
increase
associated
with
some
actions
taken
by
mayor
and
council.
Earlier
20
budget
challenges,
the
pension
levies
remain
flat
this
year.
This
is
reflective
of
good
work
done
over
the
last
several
years
by
our
former
cfo
now
city
coordinator
mark
ruff
to
stabilize
our
funding
of
the
closed
minneapolis
pensions
now
merged
with
the
public
employees
retirement
association.
C
The
nbc
levy
decreases
by
roughly
two
million
dollars,
as
the
city
will
utilize
accumulated
fund
balances
within
the
nbc
to
pay
for
much
of
our
rent
next
year.
C
The
mayor
is
recommending
the
reinstatement
of
a
levy
for
the
board
of
estimate
and
taxation
as
a
similar
approach
to
the
one
I
just
described
with
the
mbc
was
utilized
in
2020
with
that
board.
Investment
in
taxation,
as
it
drew
on
its
own
reserves
to
fund
its
operations
and
the
last
two
levies
shown
remain
constant
to
support
our
obligations
to
the
teachers,
retirement
association
and
for
repayment
of
debts
associated
with
the
library
referendum
of
the
mid-2000s
and
the
new
building
project,
as
discussed
with
council
member
cunningham.
C
C
So
what
does
all
of
that
mean
for
an
individual
property
tax
bill?
This
is
a
good
and
obvious
question
which
always
includes
a
confusing
answer,
so
I've
included
a
screen
grab
from
the
video
my
office
put
together
last
year
in
conjunction
with
the
city
clerk
and
a
team
from
our
communications
department
to
try
and
provide
a
a
plain.
If
lengthy
answer
to
this
question,
a
link
to
the
video
on
youtube
is
included
on
the
screen
and
I
do
believe
the
video
has
been
put
into
circulation
on
city
channels
or
will
be
put
into
circulation
shortly.
C
The
property
tax
equation
is
multivariate,
and
that
is
to
say,
the
equation
includes
multiple
variables
that,
when
considered
in
relation
to
all
other
properties
yields
the
answer.
So,
generally
speaking,
individual
property
taxes
are
dependent
on
the
total
property
taxes
levied.
In
our
case
this
year,
the
mayor
is
recommending
that
total
levy
should
be
5.75
more
than
what
was
levied
in
2020..
C
It's
also
dependent
on
the
total
tax
capacity
of
the
city,
and
that
is
an
estimate
of
how
much
tax
could
reasonably
be
paid.
Given
the
total
value
of
properties
in
the
city
and
the
tax
capacity
of
a
given
property
and
tax
capacity
is
determined
by
the
property's
value
and
what
kind
of
property
it
is,
so
residential
properties
are
assumed
to
have
a
lower
tax
capacity
than
similarly
valued
commercial
apartment
and
industrial
properties.
C
C
B
Mr
intermil,
if
I
can
just
pause
you
here,
evidently
some
people
can't
use
the
chat
function.
Some
of
the
council
members
here
aren't
able
to
see
it
right
now,
there's
a
bit
of
a
glitch,
but
I
do
want
to
call
on
council
member
fletcher
and
then
pause
for
any
others.
That
maybe
would
like
to
ask
a
question
and
have
been
trying
to
get
our
attention
here.
Council.
D
F
Thank
you,
chuck
palmisano,
director
intermel,
going
back
to
the
service
level
cuts.
Sorry
I
was
trying
to
get
in
and
we
had
chat
issues,
so
I'm
coming
in
a
little
late.
The
I
think
one
of
the
questions
that
I've
had.
I,
I
think,
there's
a
a
tough
balance
to
strike
when
we're
thinking
about
these
cuts
between
really
wanting
to
lean
on
the
hiring
freeze
as
a
way
of
avoiding
layoffs,
which
is
obviously
one
of
our
goals.
F
F
Goals
and
we
might
end
up
finding
ourselves
not
cutting
in
places
that
we
probably
should
strategically
be
cutting,
because
that
doesn't
happen
to
be
where
employees
are
looking
to
leave
or
looking
to
make
career
changes
and
then
putting
our
cuts
more
in
places
that
we
actually
might
strategically
really
want
to
lean
into,
and
so
there's
a
risk
of
doing
the
more
sort
of
passive
hiring
freeze,
related
service
level
cuts,
or
you
know,
but
budget
cuts,
as
opposed
to
some
more
strategic
and
proactive.
F
You
know
service
level
changes,
and
so
I
guess
I'm
wondering
maybe
I'm
jumping
ahead
by
a
week
and
we'll
get
these
answers
next
week.
But
can
you
give
us
a
sense
of
you
know?
To
what
extent
are
the
cuts
that
were
contemplating
relying
on
one
strategy
or
the
other?
How
proactive
are
the
cuts
that
that
are
being
considered
by
department,
heads
versus
sort
of
waiting
to
see
who's,
moving
on
or
retiring
or
or
otherwise,
transitioning
their
employment.
C
Sure,
chair
palmisano
and
council
member
fletcher,
it's
it's
a
a
good
question
and
I
think
cuts
straight
to
the
heart
of
the
the
policy
challenges
that
all
of
you
and
the
mayor
face
with
this
budget
environment.
C
And
so
I
think
that
in
in
thinking
through
the
the
various
approaches,
a
continued
hiring
freeze
going
or
versus
going
more
directly
into
layoffs,
you
know
it's
it's
challenging.
I
think
it's
challenging
to
get
to
knowing
which,
which
layoffs
are.
C
I
think
that,
coupled
with
the
early
retirement
incentive
program
strategy
which
that
the
incentive
is
still
being
developed-
and
I
anticipate
it
will
be
the
framework
for
that
incentive
will
come
before
council
in
the
next
cycle
or
two.
Those
two
things
together
create
space
to
be
able
to
more
thoughtfully,
evaluate
what
the
resource
needs
are
in
a
given
department
in
order
to
be
in
order
to
deliver
the
desired
service
level.
C
And
so
I
think
your
your
point
about
a
hiring
freeze
to
some
extent
puts
puts
decisions
in
faith's
hand,
but
it
also
as
it
is
a
temporary.
It
is
a
temporary
solution.
It
sort
of
buys
more
time
to
get
to
a
future
solution.
So
it's
it's
a
hiring
freeze
rather
than
the
elimination
of
these
positions,
in
order
to
take
advantage
of
that
time.
If,
if
that
rambling
answer
made
sense,.
B
B
C
Great,
so
I
I
think
one
one
last
piece
that
I
would
add
to
that
last
question,
because
it
highlights
an
an
important
feature
of
this
year's
budget
process,
and
that
is
these,
as,
as
I
said,
the
these
are
important
conversations
out.
C
That
will
take
time
also
they
they
may
require
a
more
iterative
process
this
year
than
we're
used
to-
and
I
think
that's
not
only
in
terms
of
this
year
and
and
this
year's
budget
in
fact
has
already
rolled
out
or
is
in
the
process
of
rolling
out
in
stages,
but
I
think
it
it
highlights
that
into
next
year.
When
we
see
what
the
impacts
of
that
early
retirement
incentive
program
are,
you
know
we
that
that
may
trigger
additional
needs
to
re-budget.
C
C
So
back
to
the
the
presentation
itself,
there
are.
There
are
three
major
factors
impacting
minneapolis
property
taxes
in
2021..
C
So,
first,
though,
the
growth
from
2020
into
2021
in
terms
of
market
value
is
pretty
similar
to
what
we
saw
in
prior
years.
It's
concentrated
this
year
in
apartment
and
commercial
property
types
rather
than
being
equally
shared
across
all
all
properties,
and
so
that
shifts
the
burden
from
residential
parcels.
C
When
we
talk
about
residential
parcels,
we're
talking
about
primarily
detached
single-family
homes,
but
also
condos,
duplexes
and
triplexes
shifts
the
burden
from
that
property
type
to
apartments,
commercial
and
industrial
parcels
and
you'll
see
in
a
few
slides
how
that
that
will
have
some
unanticipated
impacts
on
property
tax
bills
this
year.
C
Second-
and
this
is
truly
the
the
biggest
impact
to
taxes
this
year-
is
the
expiration
of
the
consolidated
tif
district
and
the
the
consolidated
tif
district
was
a
very
large
district
that
encompassed
downtown
east
the
north
loop,
the
the
mississippi
river
waterfront
on
the
southern
southern
edge
of
the
river
from
I-35
all
the
way
through
north
minneapolis,
as
well
as
area
around
target
field
and
area
and
uptown,
and
so
this
is
a
very
large
district
that
has
a
lot
of
tax
capacity
in
it.
C
C
C
This
year,
our
distribution
back
from
the
pool
grew
by
eight
percent,
which
was
faster
than
our
contribution
to
the
pool
which
grew
by
six
percent.
So
that
means
on
net.
We
get
to
keep
a
greater
percentage
of
our
tax
capacity,
which
reduces
the
the
tax
burden
on
each
individual
property
within
within
minneapolis
next
slide.
Please.
C
The
owner
can
look
at
the
percentage
change
in
their
market
value
and
subtract
six
percent.
The
resulting
percentage
is
what
they
can
expect:
the
growth
or
reduction
in
their
taxes
to
be
so.
If
a
property
property's
value
grew
by
six
percent,
its
taxes
would
remain
unchanged
from
2020,
because
six
minus
six
equals
zero.
If
the
value
grew
by
three
percent,
taxes
would
go
down
by
three
percent.
Again,
three
minus
six
equals
negative
three,
and
if
the
value
went
unchanged,
taxes
would
go
down
on
that
property
by
six
percent.
C
The
figures
on
this
slide
do
have
a
slight
update
because
we've
received
more
recent
and
accurate
information
from
the
county,
but
they're
similar
to
what
was
seen
on
the
14th
each
year
we
highlight
the
impacts
of
the
median
value
homesteaded
home,
so
that's
a
home
that
you
both
own
and
live
in
this
year,
that
median
valued
home
is
valued
at
281
thousand
five
hundred
dollars
and
its
value
grew
by
about
two
percent
because
of
the
impacts
I
walked
through
on
the
prior
slide
that
parcels
tax
capacity
as
a
share
of
the
total
tax
capacity
shrank.
C
C
C
First,
the
values
of
lower
valued
homes
are
growing
faster
than
the
values
of
greater
valued
homes,
and
this
is
good
news
from
a
wealth
generation
and
retention
standpoint
for
those
homeowners.
However,
it
also
means
that
the
lowered
value
homes
will
see
greater
percentage
increase
in
their
taxes,
as
values
continue
to
even
out
across
the
city.
C
Individuals
on
fixed
incomes
who
may
be
living
in
homes
held
over
multiple
generations
may
feel
pinched
in
particular,
and
for
those
folks
actually
for
all
folks.
I
encourage
utilization
of
the
state's
property
tax
relief
programs,
which
we'll
talk
about
at
the
end
of
this
presentation.
C
The
last
point
here
is
that,
as
residential
values
increase
less
of
that
homes,
value
is
excluded
from
the
calculation
of
its
tax
base,
and
so
the
homestead
market
value
exclusion
program
reduces
the
total
taxes
paid
for
properties
valued
under
four
hundred
and
thirteen
thousand
eight
hundred
dollars,
and
it's.
It
is
also
that
participation
in
that
market
value
exclusion
program
is
a
qualifying
factor
for
homeowners
to
be
able
to
receive
the
minnesota
property
tax
refund,
but
again
I'll
discuss
in
a
few
slides.
B
I
just
want
to
pause
there
and
ask
my
colleagues
if
they
have
any
questions
or
thoughts
about
the
slide.
I
also
wanted
to
mention
that
on
that
last
slide,
a
couple
just
to
reiterate
a
couple
things
you
mentioned
one,
is
that
this
is
not
final,
but
more
of
a
draft
using
county
data,
as
presented
in
the
august
14th
mayor's
budget
presentation
is
that
right,
director.
C
B
Correct
manager,
and
then
the
other
piece
is
it
is
really.
It
is
a
challenge
to
understand
without
a
lot
of
graphs
and
going
into
its
own
presentation,
but
the
homestead
exclusion
factor
kind
of
bottoms
out
at
a
certain
point,
and
do
you
happen
to
know
director
intermil
what
that
new
point
is
that
the
homestead
exclusion
zeroes
out.
C
Madam
chair,
thank
you
for
the
question,
so
the
the
ex
the
homestead
market
value
exclusion
phases
out
at
for
homes
that
are
valued
at
four
hundred
and
thirteen
thousand
eight
hundred
dollars,
and
so
right
now
it's
hard
to
see
on
the
slide,
but
the
the
75th
percentile,
valued
homestead
residential
property
is
valued
at
385
or
380
thousand
500.
So
it's
getting
very
close
to
that
phase
out,
and
so,
while
I
I
didn't,
have
a
chance
to
run
the
numbers
before
this
presentation,
you
know,
roughly
you
know,
probably
around
20
of
properties.
C
Homestead
residential
properties
in
minneapolis
can
no
longer
take
advantage
of
that
program
and
that
413
800
phase
out
is
set
in
state
law.
It's
not
indexed,
so
it
doesn't
grow
each
year
as
as
home,
values
increase,
and
that
may
be
something
that
the
city
might
consider
adding
to
its
legislative
agenda
this
year
and
in
future
years.
B
B
We're
not
hearing
her
give
her
I'll
give
her
a
chance
to
figure
that
out
and
why
don't
you
go
ahead
to
the
other
side,
we'll
come
back
to
her.
C
Certainly
so
this
this
slide
is
one
you're
all
familiar
with.
It
shows
the
distribution
of
changes
to
residential
market
values
for
from
the
assessment
for
taxes
payable,
2020
to
the
assessment
for
taxes
payable
next
year
in
2021.
C
and
each
year
we
perform
this
analysis,
excluding
parcels
that
are
valued
less
than
30
000
and
also
excluding
those
which
have
experienced
construction
in
the
last
year
or
those
whose
property
classification
changes.
So
if
somebody
moved
out
of
their
home
and
started
renting
that
that
detached
single
family
home
out,
it's
no
longer
a
homestead
at
home,
and
so
we
would
exclude
that
from
this
calculation.
C
And
you
know
all
of
these
exclusions
are
our
attempt
to
get
an
apple
staples
comparison
of
the
impacts
both
of
the
market
and
the
levy
on
taxes
across
the
city.
So
the
x
axis
so
along
the
along.
The
bottom
of
the
chart
shows
the
changes
in
percentile
changes
in
market
value
and
the
y-axis
so
going
along.
The
side
shows
the
percentage
of
residential
parcels
that
fall
into
each
percentile.
C
In
prior
years.
This
chart
has
looked
much
more
like
a
normal
distribution
or
bell-shaped
curve.
With
the
majority
of
changes
in
value
happening
towards
the
the
middle
of
the
chart,
with
tails
on
either
side,
but
as
I
just
mentioned,
lower
value
properties
are
converging
on
that
median
and
higher
value
properties
are
the
valuations
are
largely
staying
stable.
So,
as
a
result,
the
bars
on
this
chart
this
year
are
concentrated
towards
the
left
side
of
the
chart
and
that's
good
news
for
residential
property
taxpayers
this
year,
as
indeed
nearly
50
of
residential
parcels
will
see.
C
So
this
this
is
a
similar
chart,
but
showing
not
the
showing
that
tax
estimated
tax
increases
rather
than
the
changes
in
market
value,
and
so,
as
I
mentioned
earlier,
the
feels
like
factor
this
year
is
negative.
Six
percent,
so
homer
homeowners,
who
saw
an
increase
of
value
of
five
percent
or
less,
will
see
a
decrease
in
the
minneapolis
portion
of
their
property
taxes.
C
It's
slightly
mind-bending
to
understand
how
a
5.75
levy
increase
means.
Nearly
three-quarters
of
homeowners
will
see
a
decrease
in
their
taxes,
but
it
all
goes
back
to
the
three
major
drivers
discussed
earlier,
most
notably
the
expiration
of
the
consolidated
tif
district
and
the
inclusion
of
that
additional
33
million
dollars
in
the
general
tax
pool
budget
office
staff
will
produce
data
and
charts
on
market
value
and
tax
changes
for
each
of
your
awards.
C
In
the
coming
days,
we
can
also
produce
them
for
apartment
and
residential
or
apartment
commercial
and
industrial
parcels
as
well
and
again,
it's
important
to
note
that,
for
all
of
this
analysis,
when
we
talk
about
a
property,
tax
decrease
we're
talking
about
the
minneapolis
portion
of
the
bill
next
slide.
Please.
C
So
to
me,
there
are
three
big
takeaways
with
respect
to
the
impacts
of
tax
changes
this
year
in
minneapolis.
So
again,
first,
as
I
mentioned,
nearly
three
quarters
or
74
percent
of
all
residential
parcels
will
see
a
decrease
to
their
minneapolis
tax
bill,
not
taking
into
account
changes
in
hennepin,
county
or
minneapolis
public
schools,
taxes.
C
C
This
is
slightly
more
for
non-homesteaded
or
slightly
less
for
homesteaded
parsons,
so
in
total,
adding
those
together
with
a
levy
increase
of
5.75,
roughly
91
of
all
residential
parcels,
will
see
a
change
to
their
property
taxes
of
6
or
less
and
and
what
this
does
is
really
debunks
everything
I've
ever
said
when
somebody
says
well,
if
the
levy's
increasing
by
5.75
percent
won't
my
taxes
just
increased
by
5.75
percent,
and
the
answer
this
year
is
they're
likely
to
increase
chances
are
very
good
that
they'll
increase
by
that
levy,
increase
or
much
lower.
C
B
F
Thank
you
chuck
palmisano.
I
I
wanted
to
ask
about
that
a
little
bit
because,
on
the
previous
slide,
you'd
indicated
that
on
average
apartment
buildings,
we're
going
to
see
an
increase,
and
so
I
guess
I'm
curious.
If
62
of
them
are
going
to
see
a
decrease
is,
is
there
some
smaller
percentage
on
the
margin
that
is
increasing
dramatically?
That's
pulling
up
that
average
or
what's
the
what's
the
driver
here
for
what's
what
looked
to
be
a
little
bit
contradictory
data
is:
is
there
some
either
geographically
distinctive
or
other
kind
of
factor?
F
That's
making
some
apartment
buildings
see
a
more
significant
increase.
C
So,
madam
chair
and
councilmember
fletcher,
I
this
is
a
good
and
important
question
and
and
one
that
I've
been
sifting
through
the
data
to
understand
better
myself,
and
I
think
it's
two
things
so
this
again,
this
analysis
is
looking
at
parcels
that
were
similarly
situated
last
year.
C
So
if
a
new
building
came
online
this
year,
they
they
would
not
be
picked
up
in
this
analysis,
so
I
think
that's
part
of
it,
but
also
the
if
we
were
to
look
at
a
chart
similar
to
the
one
I
just
developed
for
the
or
just
showed
you
for
the
residential
parcels.
You
would
see
the
the
largest
segment
of
apartment
buildings
is
seeing
that
decrease,
there's
a
a
blip
there's,
a
spike
at
eight
percent,
and
so
that
that
is
what
pulls
the
the
median
higher.
C
So
you
were.
You
were
writing
your
assumption
that
we
do
see,
and
this
again
this
is
referring
just
to
the
residential
parcels.
But
if,
if
this
were
to,
if
I
would
have
developed
this
chart
for
apartment
parcels,
we
would
see
both
a
high
blue
on
the
the
left
hand
side,
and
we
would
see
a
spike
blue
in
the
eight
percent
line
as
well.
And
so
that's
those
are
the
the
two
most
likely
scenarios
is
either
a
decrease
or
an
eight
percent
increase.
F
F
Thank
you.
I
guess
I'm
wondering
if
there's
anything
that
if
we've
looked
at
trends-
or
maybe
this
is
a
a
question
for
the
city
assessor
about
what
qualities
of
apartment
housing
are
putting
them
in
the
eight
percent
category,
I
guess
I'm
I'm
wanting
to
understand
is
that
noaa
properties
that
are
rising
in
value
as
people
are
making
speculative
purchases,
or
is
that
are
high-end
apartment
buildings.
Seeing
an
increase.
F
C
B
Sounds
good?
We
will
dig
into
this
further
as
we
as
we
proceed
with
the
budget.
I
want
to
call
on
council
president
bender,
and
I
also
want
to
just
make
sure
my
colleagues
know
that
the
chat
feature
is
simply
not
working
as
we
for
many
of
you
as
we
try
to
get
them
to
so
please,
just
instant
message
me
or
text
me
or
just
interrupt
as
you
might
have
comments
or
questions
so
that
we
can
make
sure
that
we're
proceeding
in
a
timely
way.
Council
president
bender.
G
Thank
you,
madam
chair,
and
thanks
for
supporting
us
all
through
the
various
technical
issues.
I
just
wanted
to
follow
up
on
councilman
fletcher's
questions,
and
thank
you,
mr
intermil,
for
looking
into
it
too.
Over
the
years,
I've
had
a
number
of
meetings
about
this
issue
related
to
how
we're
valuing
rental
property,
and
I
think
it's
fair
to
say
that
the
way
that
state
law
directs
local
governments
to
assess
property
are
not
in
line
with
our
goals
related
to
supporting
housing
stability
in
minneapolis.
G
It
hasn't.
You
know
my
my
take
is
that
it
will
be
very,
very
challenging
to
to
change
that
at
the
state
level,
but
certainly
worth
an
effort
to
do
so.
You
know,
for
me,
I've
focused
more
energy
on
other
various
things
related
to
rental
protections
and
and
other
things.
But
now
we
have
a
nice
coalition
of
local
elected
officials
who
are
working
on
housing,
stability
and
particularly
around
mentor
protection.
So
I
think
it
is
worth
us
continuing
to
understand
the
ways
in
which
the
assessment
laws
or
practices
affect
these
goals.
G
So,
for
example,
on
one
of
the
last
questions
that
councilman
fletcher
asked
you
know
we
know
that
building
sales
in
a
neighborhood,
even
if
it's
new
construction
being
sold
from
one
bank
to
another,
affect
the
assessed
property
of
all
of
the
rental
property
in
the
neighborhood
and
that's
a
thing.
For
example,
that
is
counter
to
our
goal
of
stabilizing
rents
in
older
buildings
and
noaa
properties.
G
That
appears
to
be
out
of
the
city's
control.
So
again,
I
just
want
to
flag
it
as
well
for
future
follow-up
and
noting
that
it
seems
very
challenging
to
change
state
law
in
this
space,
but
I
think
worth
us
understanding
the
ways
in
which
we
would
like
to
and
starting
to
build
the
coalition
around
these
issues,
along
with
all
the
other
things
that
we're
doing
to
support
housing.
Stability
in
the
city.
D
D
C
So
if,
if
there
are
no
other
questions,
I
think
I
think
that
that's
actually
a
very
good
segue
to
this
last
point
that
I
wanted
to
make,
and
that
is,
though,
taxes
are
going
down
for
most
there's
still
a
burden
for
many
in
our
community
and
again
this
year.
I
encourage
all
of
you
to
reach
out
through
various
channels,
to
your
constituents
to
encourage
them
to
participate
in
the
state's
property
tax
refund
program,
and
I've
included
a
link
to
that
information
here
on
the
slide.
C
Everyone
should
apply,
though,
as
the
programs
do
have
the
potential
to
return
meaningful
dollars
to
many
in
our
community,
and
you
know
I
think,
to
make
up
for
some
of
those
policy
blind
spots
highlighted
by
by
the
council
president,
and
that
brings
us
to
the
end
of
the
information
I've
prepared
for
you
today.
I'm
happy
to
stand
for
any
additional
questions
that
you
may
have.
B
Thank
you
director,
so
the
comment
or
question
from
earlier
from
council
member
goodman,
who
wasn't
able
to
get
her
voice
onto
this
call,
was
simply
to
remind
us
all
that
the
city
portion
of
what
a
property
owner
pays
in
property
taxes
is
less
than
half
the
bill.
C
Thank
you,
madam
chair
and
council
member
goodman.
She
she
always
has
a
good
way
of
bringing
up
good
points
that
I
had
forgot
to
include
in
my
presentation.
So
the
the
city
portion
of
the
bill
represents
about
40
percent
of
the
property
tax
bill.
So
for
somebody
living
in
the
city
of
minneapolis,
their
property
tax
is
40
percent
city,
40
percent
hennepin
county
and
about
20
percent
minneapolis
public
schools.
C
Just
through
the
the
media,
I've
heard
the
county
board's
desire
to
have
a
flat
levy
this
year
and
I've.
Also
I've
not
heard
anything
about
the
minneapolis
public
schools
and
what
their
property
tax
levy
changes
may
be
for
for
2021..
B
Thank
you.
Are
there
any
other
questions
or
comments
about
for
or
about
this
presentation?
Just
go
ahead
and
go
ahead.
Please
because
I
can't
see
who
to
call
on
next.
B
The
next
step
will
be
to
receive
presentations
drilling
down
into
the
details
of
each
department's
proposed
budget.
We'll
begin
those
presentations
at
our
next
meeting,
which
is
scheduled
for
september
24th
at
10,
am
and
continue
through
early
november
council
members,
you've
already
received,
invites
for
all
of
these
meetings
and
the
clerk's
office
is
working
to
notice
them
for
the
public.
B
B
C
Madam
chair
and
councilmember
cunningham,
that
is
correct.
The
overview
number
two
which
will
be
on
september
24th
the
week
from
this
coming
thursday.
We
will
walk
through
the
the
details
of
the
changes
included
in
the
mayor's
recommended
budget
book
that
are
released
on
the
september
22nd
next
tuesday.
B
C
That
is
that's
correct,
madam
chair,
we'll
we'll
be
giving
an
overview
so
sort
of
a
high
level
comparison
of
where
the
various
reductions
to
current
service
level
will
be
seen,
but
the
the
individual
details
and
specifics
with
relation
to
how
those
what
those
cuts
will
mean
for
service
levels
and
and
how
folks
in
our
city
will
feel
the
impact
of
those
cuts
would
come
in
the
department
presentation
scheduled
to
occur
in
october
and
early
november.
E
So
the
details
will
be
released
on
the
22nd,
so
we're
getting
at
the
same
time
as
the
as
the
public
is,
what
I'm
assuming
that
means
okay
and
then,
and
then
I
I
just
I
I
heard
the
the
the
phrase
iterative
process.
So
can
I
get
some
clarification
about?
What
does
that
mean?
Like?
Does
that
mean
that
we're
going
to
go
back
and
forth
with
the
mayor
throughout
this
process?
Can
you
explain
what
what
iterative
process
means
within
this
context,.
C
So,
madam
chairing
council
member-
that's
a
good
good
point
to
highlight.
So
I
think
that
this
year
the
the
mayor
has
already
indicated.
Not
only
will
there
be
sort
of
a
formal
amendment
to
his
recommended
budget
in
mid-october
to
include
the
detail
of
his
recommended
capital
budget
plan.
C
He
also
anticipates,
just
by
virtue
of
all
of
the
moving
pieces,
particularly
related
to
the
the
question
that
council
member
fletcher
asked
about
the
hiring
freeze
and
holding
vacancies
open
and
how
that
might
be
able
to
change
or
not,
depending
on
the
participation
in
an
early
retirement
incentive
program.
The
mayor
has
indicated
that
he
intends,
or-
or
I
should
say,
anticipates
the
need
to
present
a
an
amendment
to
his
recommended
budget
in
in
the
late
fall
similar
to
what
has
happened
in
in
prior
years.
C
I
think
the
the
more
the
the
caution
or
foreshadowing
that
I
intended
to
give
was
really
as
we
get
into
january
february
march.
There
may
be
need
to
do
more
of
a
large-scale
update
to
our
budget
than
we
are
used
to
similar
to
what
we
did
this
year
in
the
revised
budget
process.
C
C
We
are
highly
dependent
on
local
government
aid,
for
instance,
which
represents
about
20
of
our
our
general
fund,
and
so
you
know
we
if,
if
there
were
to
be
any
changes
to
local
government
aid
next
year,
as
the
state
works
its
way
through
a
its
own
budget
crisis,
that
would
impact
the
city
of
minneapolis
meaningfully
and
we
would
have
to
take
action
at
that
point.
C
So
yes,
the
the
process
that
we've
been
following
through
these
revisions
is
to
mirror
the
the
cons,
the
construction.
The
charter
of
the
budget
process,
which
is
the
mayor,
presents
a
recommendation
and
then
the
council
modifies
that
through
amendments
and
ultimately
adopts
it,
so
were
we
to
be
in
a
situation
next
year
where
there
was
another
sudden
dip
in
revenues.
We
would
follow
a
similar
process
to
this
year,
where
the
mayor
would
make
a
recommendation,
and
then
the
council
would
react.
E
C
Talking
about
both
councilmember
and
that
just
highlights
the
complexity
of
this
budget
world
that
we're
living
in.
So
I
very
much
appreciate
the
questions
and
I
I'm
trying
to
make
it
as
clear
as
I
can,
but
in
the
interest
of
full
transparency
some
days,
it's
not
entirely
clear
to
me.
B
Not
seeing
any
so
with
that,
we've
concluded
all
business
to
come
before
committee
today.
These
were
just
to
receive
and
file
items
and
to
share
kind
of
the
work
as
we
move
forward.
So
without
objection
we
will
stand
adjourned.
Thank
you
for
your
time
and
for
hanging
in
there
with
some
of
these
technical
glitches
today.
Thank
you.