Minneapolis City Council — Transcript
Monday, June 8, 2026
Gift Acceptance for City Operations Officer
Research into Payment in Lieu of Taxes (PILOT) Program
2027-2028 Budget Estimated Revenues and Expenditures (Current Service Level)
Votes (3)
Gift Acceptance for Interim Deputy City Operations Officer Katie Topinka
Moved by Aisha Chugai/Chair · Seconded by Unknown
The item involved the acceptance of a gift to enable Katie Topinka, interim deputy city operations officer, to attend the Strive Together 2026 policy summit and city accelerator cohort meetings. This was a walk-on item added to the consent agenda. Council member Wansley initially had a question but later withdrew it, indicating no significant debate.
Staff Direction to Research a Potential Payment in Lieu of Taxes (PILOT) Program
Moved by Council Member Wanley · Seconded by Unknown
Council Member Wansley introduced the item, citing a recent report highlighting Minneapolis's lower per capita revenue compared to peer cities and its heavy reliance on property taxes. The PILOT program is proposed as a voluntary revenue diversification strategy, targeting tax-exempt entities like higher education and healthcare institutions that consume significant city resources. It is estimated to generate $10M-$19M annually. Concerns were raised by Council Member Warren about the potential impact on tuition costs for low-to-moderate-income families, but Wansley clarified the voluntary nature of the program and its distinction from a new tax, emphasizing it's for services already provided. The motion is a directive for further staff analysis.
Report Regarding Estimated Revenues and Expenditures for 2027-2028 Budget (CSL)
The budget committee received a presentation on the 2027-2028 Current Service Level (CSL) budget calculations. Key findings included a projected $28M-$33M gap between expenses and revenues in the general fund, driven by 5.1% expense growth versus 1.9% revenue growth. Expense drivers included rising personnel costs (salaries, healthcare, paid family leave), and increased internal service charges due to inflation. Revenue challenges stem from reduced interest earnings (due to declining fund balance), and moderating growth in local option sales taxes (LOST). Council President Payne expressed alarm at the gap size, queried the internal service allocation model, and emphasized the need for accurate overtime forecasting, noting past '5x delta' issues. Council Member Wansley pressed for an overdue update on a comprehensive fee study, while Vice Chair Schaefer sought clarification on staff's priorities (efficiencies vs. revenue vs. levy) in addressing the gap. Council Member Stevenson raised questions about council's powers over budget deviations and overtime management.
Notable Quotes (9)
This particular revenue 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 taxes.
This is essentially we already provide services to many of these institutions but we don't receive revenue because they don't pay property taxes. So, this is getting a sense of what are those services, what would be the fiscal amount to them if we actually charged some of these institutions.
If we're looking at higher education institutions and and um things like that, I'm thinking about the lower to moderate income families that are paying into those institutions and what that may possibly do for the fees that families are paying to have their children to attend these different education institutions or what 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 already, you know, struggling to pay that tuition.
This year, we enter decision-m with an estimated gap between expenses and revenues of between 28 and $33 million. That becomes the problem to solve throughout the summer as part of the mayor's budget process alongside consideration of any other funding needs.
This is a large gap. Um I won't I won't sugarcoat that. We have a lot of work to do. Um and we will do it. But I would say that this is a substantial gap that we're facing right now.
Absolutely not possible to accurately predict down to the second what overtime is going to 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's going to invade your city. These are not things that you build into your model typically. Mhm. Um, so I want to give the caveat that there's no way we would have guessed the right amount of overtime this last year, but there at the same time a 5x delta is like you need to be within an order of magnitude in your forecasting as well.
Council passed a a legislative directive two years ago asking um for the administration to complete a comprehensive fee study um so that we could have a better understanding of areas where fees are not being fully optimized to cover the full cost of various city services.
I think the only thing that stops this institution from overspending is the public and their relative engagement on what we do here and whether or not they are outraged or supportive of it. that political pressure drives everything else, right? So, the authority to make sure that a department doesn't overspend is solely with the mayor. ... The ultimate authority is with the mayor. And the only thing that can affect that is the relative engagement of the residents of Minneapolis.
We passed a p policy amendment last December that says as it relates to any council appropriations um those implement or the implementation of those or if there's any changes that the administration wants to make to not implement um any you know council initiated budget amendments they need to come before this body and ask for our approval or for a denial essentially because what we have seen for far too often is we will make budget amendments and then they would not be implemented and then they would be um routed towards other city programs.
Ordinances & Resolutions (18)
Request for Council Action, provided for the walk-on gift acceptance item.
An extensive report and presentation received by the council earlier in the year regarding potential city revenue increases, specifically highlighting the PILOT program.
Refers to the detailed Guide House report, which defines organizations eligible for the PILOT program.
A new budget software platform being implemented by the city's budget team.
Guiding principles for the budget process, adopted in December, referenced multiple times for personnel, internal service costs, and overtime.
Industry best practice organization whose guidelines inform the city's financial policies.
Accounting standards followed in the city's budget processes.
Specific city financial policy regarding overtime, stating it is not inflated and requires mayor/council approval.
Specific city financial policy stating general fund departments are provided budget to pay for internal service charges.
Financial policy language relevant to the management of the Downtown Assets fund balance.
A key document guiding the city's financial planning, referenced for planned growth in the general fund levy and FTE allocations.
The budget adopted for the previous year, serving as the starting point for current service level calculations.
The comprehensive document containing budget details, to be released in August.
Reports that provide updates on the city's financial status.
Outlines financial responsibilities within the city government, attributing most to the City Council except for the proposal of the annual budget (Mayor).
A comprehensive analysis requested by Council two years prior, aimed at optimizing fees for city services to ensure full cost recovery and offer taxpayer relief.
Fund that received a $7 million transfer from the downtown assets fund in response to Operation Metro Surge.
An event or situation that impacted certain sectors like food service but saw aggregate sales tax collections remain strong in Q1 2026, and also triggered additional funding for small businesses.