Minneapolis City Council — Transcript
Monday, September 28, 2026
Payment in Lieu of Taxes (PILOT) Program Feasibility
Regulatory Services Department 2027-2028 Budget Overview
City of Minneapolis Homelessness Response Budget and Strategies
Votes (3)
Response to Staff Direction: Payment in Lieu of Taxes (PILOT)
Christina Keerling, Senior Advisor to the Board of Estimate and Taxation, presented an analysis of Minneapolis's tax-exempt landscape and the concept of Payment in Lieu of Taxes (PILOT). The report, in response to a staff direction, detailed over 6,000 exempt properties, with a custom spreadsheet available for deeper data exploration. It outlined the tax-exempt status as per Minnesota state statute, categorized properties by usage and ownership (majority being government-owned, then religious), and identified entities with the highest portfolio values, notably the University of Minnesota. Keerling explained PILOT as voluntary payments by nonprofits to compensate for city services, citing Boston and Providence as examples of routine annual payment and long-term contract models, respectively. Criticisms of PILOT from the nonprofit sector and legal concerns were also presented. The University of Minnesota's unique status as a land-grant university with its own police and land care was highlighted as a special consideration. Council members inquired about the legality of PILOT programs, specific stadium exemptions, the scope of the University of Minnesota's self-provided services, potential for corruption in negotiated models, and dedicated fund allocation. The City Attorney indicated that legal review was premature for specific funding allocations.
Regulatory Services Department 2027-2028 Budget Presentation
Director Enrique Velasquez presented the Regulatory Services Department's (RSD) budget for 2027-2028, outlining its diverse work in housing, livability, traffic safety, special events, and animal control. The proposed $35.1 million budget for 2027 represents a $3.4 million increase, driven by internal service charges, liability allocation, and staff costs like COLA. Key investments include $278,000 for overtime/on-call, $130,000 for parking/custodial at a new facility, and $458,135 for the traffic safety camera pilot. Divestments include the proposed reduction of eight General Fund FTEs and the repurposing of one vacant housing liaison to maintain an Inspector 2 position. Council members raised questions about the projected decrease in inspection licenses revenue, the significant impact of FTE cuts on frontline services, the city's move to externalize rubbish abatement services from Public Works, and the impact of losing an animal foster program coordinator. Concerns were voiced about preserving jobs, maintaining service levels, and the need for increased rental license fees to cover costs.
City's Homelessness Response Budget and Strategies
Director Enrique Velasquez introduced a multi-departmental presentation on the city's homelessness response, emphasizing the goal of making homelessness 'rare, brief, and non-recurring' in partnership with Hennepin County. The Regulatory Services' Homeless Response Team (five members strong) reported over 1,000 311 requests and nearly 2,000 engagements, resulting in 275 housing referrals in 2026, and plans to deepen support in 2027 with a $1.3 million budget. Interim Health Commissioner Heidi Richie detailed the Health Department's Mobile Medical Unit (MMU), serving over 900 individuals and providing 600+ referrals in 2026, funded by $835,000 in opioid settlement dollars for 2027. Alfred Port of CPED explained their role in capital projects and outsourcing services through a joint powers agreement with the county, with a proposed $9.8 million budget for 2027 (a 46% reduction due to one-time funds ending). The Police Department's role was noted for providing safety measures, with a proposed 10% budget increase for a dedicated lieutenant. The discussion highlighted inter-agency coordination and specific services for unsheltered populations.
Notable Quotes (11)
Pilot is typically low in revenue generation though, with successful programs typically bringing in less than 1% of a municipality's total revenue.
From the nonprofit sector, the attitude is typically that they have earned their tax exempt status. And to ask for payment in lie of taxes is to kind of question that tax exempt status.
Are there ever accusations of corruption when it comes to that? I could see like let's say a future mayor, we did this in Minneapolis, a future mayor went to Augsburg as an example, and then Auguxburg had a lower negotiated than uh I don't know, a different private college, St. Thomas, let's say.
I guess my question for the city attorney's office that we can respond with a follow-up memo is uh can we do either of these options in Minneapolis?
The proposal does not increase our discretionary spending or budget. Every additional dollar we would receive is already accounted for and will cover costs that we're required to pay.
I will just say it here today, I think that would have a devastating impact on our housing stock, on our rental units, on the livability of our renters, and um cutting potential inspector positions.
I'll just state I think this for me is a move that is kind of counter to the progress that we want to see. I think we want to see more programming inhouse as a city service rather than having services go out to outside vendors.
Without it, we're unfortunately concerned that the percentage of animals who are able to be rehabilitated and leave our shelter alive will decline. Additionally, fewer animals will enter foster care, leading to longer shelter stays, overcrowding, and higher levels of stress and illness among animals.
Where service providers tend to focus on the person experiencing homelessness, the homeless response team builds upon that approach by engaging them, plus the other people and services surrounding them.
The health department's homelessness response is primarily delivered through our mobile medical unit, bringing low barrier health services directly to people who may otherwise have difficulty accessing care.
Our model is to outsource all service related um activities and contracts through through a joint powers agreement with the county as they are the designated um um community continuum of care um provider in the in the in the state or in the county.
Ordinances & Resolutions (24)
Legal basis for tax-exempt status in Minnesota
Analysis of raw assessing data for tax-exempt properties in Minneapolis
Synthesizes major takeaways from tax-exempt data set
Formal contracts used in long-term PILOT model (e.g., Providence)
Document containing list of addresses for University of Minnesota campus properties
Graphic showing Boston's annual tax tally and PILOT contributions
Committee's request for PILOT analysis
Explored better PILOT implementation for Providence
Overall budget proposal for the city departments
Pilot program for speeding enforcement at select intersections
Grant that previously funded an Inspector 2 position
Agreement with Hennepin County for winter warming center services; also for homeless services
City's non-emergency service line for complaints and service requests
Emergency service line, mentioned in context of University of Minnesota police collaboration
Requires certain rental licenses to go before council for review
Health Department's direct health service delivery for unsheltered individuals
System used to track housing referrals and homelessness data
Voluntary count of homeless individuals, expanded to include those in vehicles
Event supported by neighborhood resource centers
CPED's fund for capital projects and homelessness response
One-time funding source that fell off CPED's budget
One-time funding source that fell off CPED's budget
Program that experienced a fiscal cliff, received one-time funding
Committee that will receive an update on emergency rental assistance