Budget Committee April 14, 2025   4/14/2025

Discussion

• • Aisha Chughtai
  • 00:00:29
    Good afternoon, my name is Aisha Chugtai and I'm the chair of the Budget Committee.
  • 00:00:33
    I'm going to call to order the Budget Committee meeting from Monday, April 14, 2025.
  • 00:00:39
    Before we begin the meeting, I want to offer a friendly reminder to all members, staff, and the public that these meetings are broadcast live to enable greater public participation.
  • 00:00:49
    These broadcasts include real-time captioning as a further method to increase the accessibility of our proceedings to the community.
  • 00:00:55
    Therefore all speakers need to be mindful of the rate of their speech so that our captioners can fully capture and transcribe all comments for the broadcast.
  • 00:01:05
    We ask all speakers to moderate the speed and clarity of their comments.
  • 00:01:09
    At this time I'll ask the clerk to call the roll so we can verify the presence of a quorum.
  • 00:01:13
    Council Member Payne.
• • Robin Wonsley
  • 00:01:15
    Present.
• • SPEAKER_13
  • 00:01:16
    Wonsley.
• • Robin Wonsley
  • 00:01:16
    Present.
• • SPEAKER_13
  • 00:01:18
    Rainville is absent.
  • 00:01:20
    Vitau.
  • 00:01:21
    Present.
  • 00:01:23
    Ellison.
• • SPEAKER_09
  • 00:01:23
    Here.
• • SPEAKER_13
  • 00:01:25
    Let the record reflect that we have a quorum.
• • Aisha Chughtai
  • 00:01:47
    I'll also remind my colleagues that we will be using speaker management today, so please make sure you sign in.
  • 00:01:54
    colleagues, we have four items on our agenda.
  • 00:01:58
    I will begin with discussion item number one, which is related to the appointed position of Assistant Director of Labor Relations in the Human Resources Department.
  • 00:02:08
    I will invite Brenda Miller from our Human Resources Department to come up and begin the presentation.
• • Brenda Miller
  • 00:02:16
    Good afternoon Chair Chug Thai and members of the committee.
  • 00:02:19
    I'm Brenda Miller, the classification and compensation manager for the city, and I'm here to present the assistant director of labor relations for your consideration.
  • 00:02:31
    The assistant director of labor relations reports to the director of labor relations in the human resources department.
  • 00:02:37
    The position oversees the implementation of enterprise compensation strategy, positioning, maintaining alignment with the city's mission and objectives.
  • 00:02:46
    The Assistant Director of Labor Relations has been evaluated at 573 points, grade 12.
  • 00:02:52
    The salary schedule for 2025 is between $138,000 and $164,000.
  • 00:03:00
    The incremental costs will be paid for by using existing HR funds, and the changes are effective April 17th of 2025.
  • 00:03:10
    We believe this position meets the criteria of Section 2010-10 of the Minneapolis Code of Ordinances.
  • 00:03:16
    It reports to the Director of Labor Relations.
  • 00:03:19
    It's a member of the Human Resources Department's management team.
  • 00:03:23
    It assists the Director of Labor Relations in the development and implementation of city policy, goals, and strategic planning for human resources labor relations.
  • 00:03:32
    It requires leadership, vision, team building, and strategy implementation.
  • 00:03:37
    And it also establishes policy goals and strategies that are consistent with the goals and priorities established by the Mayor, City Council, and the Chief Human Resources Officer.
  • 00:03:50
    We're asking that you find the Assistant Director of Labor Relations meets the appointed criteria as defined in Section 2010-10 of the Minneapolis Code of Ordinances and forward it on to Council for approval.
• • Aisha Chughtai
  • 00:04:03
    Thank you for that presentation and I see that we have Human Resources Director in the audience today so anyone from Human Resources joining us to speak to the position itself and the need you're hoping to fulfill with this appointed position.
  • 00:04:23
    Welcome, Director Odom.
• • Nikki Odom
  • 00:04:24
    I was going to say good morning but that's not right.
  • 00:04:27
    Madam Chair, Council Members, so we're continuing to restructure and align the HR department to make sure that we are doing what we can to ensure that we are getting the best customer service for our employees and that we are aligning things to make sure that we are getting proper efficiencies.
  • 00:04:48
    We have determined that the compensation team
  • 00:04:53
    should probably be a part of the labor relations team because 90 plus percent of our employees are unionized and we want to make sure that the that there is a cohesion and proper communication especially when we were talking about our collective bargaining agreements and our negotiations there has traditionally been a little bit of a disconnect and
  • 00:05:18
    with a lot of the new focus and I would say some of the media attention and other things we want to make sure that those teams are working very closely and that we are aligning our compensation for our employees especially our unionized employees in the right way and so those two teams need to work really inseparably and then work again pretty closely with finance.
  • 00:05:42
    and so we believe that moving that team into labor relations is what really needs to happen there and that we need to elevate one of the labor relations principles to manage that team.
  • 00:05:54
    And we have an individual who is doing a wonderful job.
  • 00:05:57
    kind of melding the two, the comp and LR.
  • 00:06:00
    And so we think that this is obviously a lot more, a lot more responsibilities for that person.
  • 00:06:07
    The person is not just now doing labor negotiations, they will be doing that plus managing all of the compensation.
  • 00:06:14
    So that is the reason for making this restructure change.
• • Aisha Chughtai
  • 00:06:20
    Wonderful, thank you for that presentation.
  • 00:06:24
    Colleagues, are there any questions or discussion related to this item?
  • 00:06:31
    And, oh, I will recognize Council President Payne.
• • Elliott Payne
  • 00:06:35
    Thank you, Madam Chair.
  • 00:06:36
    Yeah, I was curious if you know which bargaining units might be up for contract renewal this year.
• • Nikki Odom
  • 00:06:44
    That is something I can get to.
  • 00:06:46
    There's I think four in process now and ten by the end whose contracts will be up by the end of the year so we can certainly get that list to you.
• • Elliott Payne
  • 00:06:56
    Could we have that as an administrative follow-up?
  • 00:06:58
    Thank you.
• • Aisha Chughtai
  • 00:07:02
    Wonderful, thank you.
  • 00:07:06
    just wondering is there a director as well of the total compensation team?
• • Nikki Odom
  • 00:07:14
    This position will basically be now the director of the compensation not total comp so total we have to re revise the name of that division because it was basically compensation and benefits
  • 00:07:26
    So we're now moving the compensation team under the LR Director and so we need to revise the name of total compensation But this will basically be the manager of comp and it'll sit under LR and that will cover like 95% of employees because they're unionized
• • Aisha Chughtai
  • 00:07:48
    Got it.
  • 00:07:49
    I was just wondering if there was an existing appointed position for director of that team and if they will not be moving?
• • Nikki Odom
  • 00:07:56
    It's not a director, but a manager.
  • 00:07:58
    Yes, and then so we'll be restructuring.
• • Aisha Chughtai
  • 00:08:01
    Got it.
  • 00:08:01
    Wonderful.
  • 00:08:02
    Thank you.
  • 00:08:03
    Not seeing any further discussion, so I will move approval of this item.
  • 00:08:10
    Can I get a second?
• • Elliott Payne
  • 00:08:12
    Second.
• • Aisha Chughtai
  • 00:08:13
    The item has been properly moved and seconded.
  • 00:08:16
    All those in favor please signify by saying aye.
  • 00:08:20
    Those opposed say nay.
  • 00:08:22
    Any abstentions?
  • 00:08:24
    The ayes have it and that motion carries.
  • 00:08:27
    Item number two on our agenda is the rollover of unspent appropriations from 2024 to 2025.
  • 00:08:33
    This includes items that were delayed or not completed during the 2024 budget year for several departments.
  • 00:08:40
    At this time I will invite our controller to come up and present this item.
  • 00:08:45
    Welcome.
  • 00:08:49
    Take your time to get set up and then we'll just make sure that you're right in front of the mic so that we can capture your comments for the broadcast.
• • George Hargrove
  • 00:08:58
    Okay thanks.
• • SPEAKER_01
  • 00:09:44
    We need the display
• • SPEAKER_09
  • 00:10:12
    Okay, yeah, thanks Casey
• • George Hargrove
  • 00:10:39
    I think I'm already here now.
  • 00:10:41
    Good afternoon, Chair Chuktai, City Council members.
  • 00:10:44
    Thank you very much for allowing me to come and present the 2024-2025 rollover request from last year.
  • 00:10:55
    Just as a reminder, what rollovers are is that they're an increase to the 2025 budget for items that were started in 2024 but weren't yet complete.
  • 00:11:11
    There could be legal obligations on contracts or things along those lines as well too.
  • 00:11:16
    It's not an authorization for brand new spending or anything that wasn't before the council.
  • 00:11:23
    in the past.
  • 00:11:24
    The city does have pretty strict rules for the rollovers I'll go over in a minute.
  • 00:11:30
    They're also thoroughly reviewed by a team we have in finance here with myself, our budget director and chief financial officer.
  • 00:11:39
    So from the
  • 00:11:42
    From the presentation here, you can see the criteria here under Section 4.13.1 all related to the rollover.
  • 00:11:50
    In order to be eligible for a rollover, they must be a valid encumbrance.
  • 00:11:54
    Usually that means a contract or purchase order on the contract.
  • 00:11:58
    Must be a one-time expenditure, not something that's recurring like payroll, for example, wouldn't be eligible.
  • 00:12:04
    have a purpose consistent with the department's business plan, you know, something that was in the 24 budget.
  • 00:12:11
    And then the department as a whole must have a positive appropriation balance as of the end of the year that can absorb the rollover.
  • 00:12:19
    So again, it's not new spending, it just gives people a little more time to spend their 24 budget.
  • 00:12:24
    And then also finally have a
  • 00:12:26
    The fund itself has to have a positive financial position and I'm happy to report this year that we feel that all funds were in a good enough state to consider rollovers.
  • 00:12:39
    So just to talk a little bit about the process, what we do is finance leadership sends a request to the departments, usually around the end or middle of February or so.
  • 00:12:52
    Departments have several weeks to complete the request for the rollovers.
  • 00:12:57
    The deadline this year was March 7th.
  • 00:12:59
    and then we do ask them to kind of signify compliance with the first four requirements of the policy.
  • 00:13:06
    New this year is we also sent a list of purchase orders that were existing or had year-end balances as the end of 2024.
  • 00:13:14
    We asked the departments to, if at all possible, tie their requests back to the purchase orders.
  • 00:13:21
    That way we knew that it was a valid encumbrance.
  • 00:13:25
    And then finally we take a look at the fund balances and determine if there's enough money to roll over the requests.
  • 00:13:34
    And like I say, I'm happy to report that we feel there is.
  • 00:13:38
    Continuing with the process.
  • 00:13:41
    Like I say, after we receive the request, we evaluate all the responses, we ask clarifying questions, we make contact with the departments.
  • 00:13:50
    There's quite a bit of conversation back and forth.
  • 00:13:53
    And then finally, we bring the request to the City Council that we're doing today to amend the 2025 budget.
  • 00:14:01
    Again, rollovers don't authorize new spending.
  • 00:14:04
    They just allow us to complete purchases from 2024.
  • 00:14:09
    And then at the end of the resolution, there's language to roll over grant funds, capital funds, and other restricted sources of revenues from last year to this year.
  • 00:14:19
    And again, these are all multi-year projects or grants.
  • 00:14:27
    And just to give a little bit more detail, this is a summary of the resolution.
  • 00:14:30
    You can see that we have, certainly CPED is the department that has the most requests.
  • 00:14:39
    They had a fairly big budget variance at the end of the year.
  • 00:14:43
    You can see we have neighborhood safety and finance.
  • 00:14:46
    A lot of that is public safety aid that's being rolled over and I can talk more about that I think when we get to the fourth quarter finance presentation.
  • 00:14:55
    Otherwise, the rest of the departments were pretty well in the six to seven figures or so.
  • 00:15:04
    So this compares, you can see the bottom line is about a little less than 42 million dollars out of the general fund.
  • 00:15:10
    And then if we look at the non-general fund on the last slide here, you can see again where most of this is community planning and development, CPED.
  • 00:15:20
    A lot of that is for their capital projects.
  • 00:15:25
    and TIF District work.
  • 00:15:28
    Then we see IT and Public Works have a fair amount, the Target Center have a fair amount for their projects as well too.
  • 00:15:36
    So at this point I stand for any questions and we appreciate your request for these rollovers for this year.
  • 00:15:42
    Thank you.
• • Aisha Chughtai
  • 00:15:44
    Thank you for that presentation.
  • 00:15:47
    Colleagues, are there any questions or discussion from the committee?
  • 00:15:50
    I'll first recognize Council President Payne followed by Council Member Palmisano.
• • Elliott Payne
  • 00:15:55
    Thank you, Madam Chair.
  • 00:15:56
    This is more of a process question, but every one of these dollars, is it tied to a PO or it's a project that's in flight or spending that's in flight?
  • 00:16:10
    If these were not to get
  • 00:16:13
    approved today, what would be the result of that?
  • 00:16:16
    I imagine we're contractually obligated to certain transactions, right?
• • George Hargrove
  • 00:16:20
    Yes, yes, Chair Chagti, Council Member Payne.
  • 00:16:24
    Yes, they are tied to legal encumbrances that we have.
  • 00:16:27
    So yes, most of these are on purchase orders or contracts that we've signed in the past.
  • 00:16:33
    Some are projects as well, too.
  • 00:16:36
    So yes, if we didn't
• • Elliott Payne
  • 00:16:37
    And then the other piece to this, the policy says it has to be in alignment with the department's business plan.
  • 00:16:53
    Do departments have business plans that you review as part of this process?
• • George Hargrove
  • 00:16:58
    Yeah, we I generally myself I review them through the the budget book I guess and so and the budget some of the budget materials That I reviewed since I've been here.
  • 00:17:09
    But again, yeah That's that's generally what we look at and I've also worked with the CFO and the budget director on that as well, too And we do ask some questions occasionally to you know, if we have if we have a you know questions or concerns on that so the the budget book would be what we would define by this policy as the
• • Elliott Payne
  • 00:17:27
    The business plan, yes, yes Those are my questions for now, thank you Thank you Councilmember Palmisano
• • Linea Palmisano
  • 00:17:46
    Thank you, Madam Chair.
  • 00:17:48
    Do we typically see this much rollover for CPED on a regular basis?
  • 00:17:53
    It just seems to be a big outlier.
  • 00:17:57
    And I get there can be some big projects that just can't wrap up by December 31st, but do you see this as an outlier and are you concerned about it?
• • George Hargrove
  • 00:18:08
    I would have to I think get back to to see the history of CPET I do I do I am pretty sure it is more than last year
  • 00:18:18
    I could look at the history of it, I'm not sure if people that have been at the city longer than I have have incited that, otherwise I can get back to you on that as far as what their requests have been.
  • 00:18:32
    But I do believe it is more than 24, or from 23 to 24.
• • Linea Palmisano
  • 00:18:35
    So, I see the line by line items, I'm just curious what explains that in aggregate.
  • 00:18:45
    I have a big post here in my way.
  • 00:18:47
    I'm not sure if there's anybody from CPED that would want to comment on that, but for follow-up I think the right way to phrase the question is,
  • 00:18:56
    Maybe over the past three years, what has been the rollover and are there any big items that strike this as being unusual?
  • 00:19:09
    We don't want to collect more taxpayer dollars than is needed to get something done within a year.
  • 00:19:14
    We could have otherwise waited until the following year.
  • 00:19:18
    The other question that I have is about public safety aid.
  • 00:19:22
    Am I seeing this correctly that it looks like there's about 3.4 million dollars of unallocated public safety aid that then looks like it's rolling over in property and finance services?
• • George Hargrove
  • 00:19:36
    Yeah, actually, um, yeah, I can speak to a public safety aid, Madam Chair and Councilmember Pelamisio
  • 00:19:45
    What's happened with we had roughly of the 19 million dollars we got at the end of 2023 we had about 15 million left over and of that about 5.3 million or so was actually programmed into the 2025 budget that was already approved by the council so we needed that you know as part of the funding to fund the general fund portion to help fund the general fund portion
  • 00:20:10
    of the 25 budget, and then the other 9.7 million is being asked to be rolled over as part of this request.
  • 00:20:16
    That's mainly in the neighborhood safety area as well as in the finance area.
• • Linea Palmisano
  • 00:20:21
    But those are all, that's money that there have not been decisions made on how it will be allocated out.
• • George Hargrove
  • 00:20:29
    I would say I could go over the or get back to you or go over now to over the actual 9.7 million in rollover requests.
  • 00:20:41
    I'd have to consult I think would be best for me to consult with the budget office on the 5.3 million that was already planned for use in the 25 budget.
  • 00:20:50
    I mean to answer your question I do believe it was planned on something for 25.
• • Linea Palmisano
  • 00:20:54
    I believe so too.
  • 00:20:56
    All right, I guess my last question is I see $289,000 rolling forward for media buys for the Imagine Yourself campaign for MPD recruitment.
  • 00:21:08
    Given the funding was gutted for this program in this year's budget, what would be the plan for those funds?
  • 00:21:15
    Would it be to continue the work from last year as long as it as far as it can take us?
• • George Hargrove
  • 00:21:20
    Yeah, that is that was the request to to to roll to roll keep keep the media by going I believe was part of the HR request that line item.
• • Linea Palmisano
  • 00:21:32
    So this is about half of what was taken for 2025 So it So I'm sorry It seems my colleagues on the dais
  • 00:21:50
    might have more information.
  • 00:21:52
    I'll yield to them.
  • 00:21:53
    Thank you.
• • George Hargrove
  • 00:21:54
    Okay, thank you.
• • Aisha Chughtai
  • 00:21:57
    Director DeCenza, did you want to just come up briefly and speak on public safety aid?
  • 00:22:01
    Because I understand there was, we took the public safety aid remainder and that lived in finance, but that was allocated as a part of the budget process and the recommended budget.
  • 00:22:11
    So I just think it'd be super helpful if you could shed some clarity on
• • Jayne Discenza
  • 00:22:16
    So there was a portion of, in the 24 budget there were two sections of public safety aid that were sitting in the finance department.
  • 00:22:31
    One of those was fully uncommitted, saving for future uses.
  • 00:22:36
    and one of them was related to future pilots.
  • 00:22:41
    The amount that was uncommitted was programmed in the 25 budget.
  • 00:22:45
    I believe that was four and a half million dollars and so that helped us buy down the levy on a one-time basis.
  • 00:22:54
    And so those dollars are spent in the 2025 budget.
  • 00:22:59
    Does that answer your question?
• • Aisha Chughtai
  • 00:23:01
    Yes.
  • 00:23:02
    And then can you speak to what's being rolled over?
  • 00:23:04
    Sure.
  • 00:23:05
    Is that the different projects that were approved in 2023 for the 2024 budget?
• • Jayne Discenza
  • 00:23:11
    Mm-hmm.
  • 00:23:11
    Chair Tuktai, yes.
  • 00:23:12
    So departments gave us an update on where so many of those projects were.
  • 00:23:18
    We didn't program them in the 2025 budget and so they need to be rolled over if that work is to continue.
• • Aisha Chughtai
  • 00:23:25
    Great, thank you.
  • 00:23:27
    Alright, so next I will recognize Council Member Wonsley.
• • Robin Wonsley
  • 00:23:34
    Thank you, Chair Chuktai.
  • 00:23:38
    Also, I wish there was a way to kind of go line by line on this resolution because I also had a lot of just
  • 00:23:47
    I have two outstanding questions starting even with Neighborhood Safety Department.
  • 00:23:50
    There's one section here where there's 3.7 million dollars that's being rolled over and it's titled various uncompleted operational contracts and I know when we have them come before us they share that there were not any outstanding contracts still within that department.
  • 00:24:07
    So I would love to get clarity on this and actually following up to Councilmember Palmisano's question around the media buys MPD recruitment campaign.
  • 00:24:17
    I would love to get follow-up on this.
  • 00:24:20
    As that same line that Council Member Palmisano has shared around Council Members gutting this actually was not the case.
  • 00:24:29
    MPD recruited or requested an additional, I believe, $500,000 in new spending on the basis that apparently there was no money for this.
  • 00:24:38
    And now we're seeing that there was $289,000 that was
  • 00:24:43
    in the department available for this.
  • 00:24:45
    So it feels as if we were given mixed information during the budget session around what resources were actually available within various departments, especially around certain initiatives when we were looking to make funding appropriations for our specific amendments.
  • 00:25:04
    So very curious how we landed there.
  • 00:25:08
    Also,
  • 00:25:10
    I'm really interested, I know my neighborhood associations would love to know the rollover, how we landed that with some of the appropriations within NCR and some of the programs that are really tied to funding initiatives for neighborhood associations like how did we land there
  • 00:25:30
    It just begs the question of we had a very intense budget deliberation session where again we had lots of questions around how do we reduce the levy and it does feel kind of just weird right now that we're looking at over a hundred million dollars in rollovers and I know some of this is
  • 00:25:52
    committed and that is not also reflected in this resolution that's presented to us of like what is the breakdown of that of these amounts that is already committed versus not committed.
  • 00:26:03
    So I will name that as a concern and I don't know what budget leadership could do to help reconcile that.
  • 00:26:10
    There's ways to get additional information on that piece so that we can actually know what is
  • 00:26:17
    more flexible funding or understanding what funding did not get spent down.
  • 00:26:23
    Our departments having challenges spending some funding and what is actually committed and is moving out the door.
  • 00:26:30
    That does not feel clear from the resolution that's attached to this file for me.
• • Aisha Chughtai
  • 00:26:45
    Thank you.
  • 00:26:45
    I will recognize Council President Payne.
• • Elliott Payne
  • 00:26:48
    Thank you.
• • Aisha Chughtai
  • 00:26:49
    Actually, I'm gonna just cut that short real quick.
  • 00:26:54
    Director Krueger, if you wanted to just join potentially address some of the questions or discussion items that were raised.
• • Deb Krueger
  • 00:27:01
    Chair Sugtai, Council Member Wonsley, absolutely.
  • 00:27:05
    Deb Krueger, Director of HR Operations.
  • 00:27:08
    To speak a little bit to the recruitment campaign.
  • 00:27:11
    Oh gosh, okay, so this started in 2022 when we created, we used ARPA dollars to create a branding campaign and we started out with law enforcement and sort of those hard to fill positions and we
  • 00:27:30
    spent all of those ARPA dollars on the campaign as well as media buys.
  • 00:27:33
    And then to keep it moving forward, so that was the first, let me think, it launched in January, our first media buys with ARPA went through April of 2024.
  • 00:27:44
    And to continue that work, we received the money through the public service aid, yes, the public service, no, public safety aid, sorry, public service, public safety.
  • 00:27:59
    the actual work in terms of purchasing the media buys was transitioned to the communications department so there Jordan Gildenbach and the social media arena of communications actually places the media buys for the recruiting campaign for law enforcement.
  • 00:28:20
    There was between April and July
  • 00:28:26
    staff wasn't available in the Communications Department to do so.
  • 00:28:28
    So there was a bit of a delay getting that kicked off and off the ground.
  • 00:28:32
    We had our vendor who created the branding campaign
  • 00:28:39
    They have been placing the media buys since
  • 00:29:00
    July of 2024, and there has been an additional of that rollover dollar, an additional $45,000 had been spent, but the invoices did not come in prior to the close of the 2024 financials.
  • 00:29:17
    So there's about $45,000 of that has been spent.
• • Robin Wonsley
  • 00:29:21
    and just a follow up question on that quickly, is the reason why, oh, okay, now I'm seeing it with the communications, within the HR Administration Department, that's where it's being routed through, because I see HR, okay, yeah, gotcha, alright, thank you.
• • Aisha Chughtai
  • 00:29:43
    Thank you, Council President Payne.
• • Elliott Payne
  • 00:29:46
    Thank you, Madam Vice President.
  • 00:29:50
    kind of a couple angles here.
  • 00:29:52
    First angle is I want to thank Deputy Commissioner Hanlon for being in the room to answer questions but I don't think I have any because the descriptions are pretty straightforward but I'm not getting that for the rest of the departments.
  • 00:30:07
    It's kind of a smattering of some of them are self-evident and other ones it leaves questions for me so I'm curious from a process perspective
  • 00:30:18
    is health an outlier here and just provided extra content in the description or do other departments in the documentation that they were providing through the requests, is there more information available than what's presented here that we could review or would we need to ask other departments to
  • 00:30:37
    to present more detailed descriptions so that we could kind of get a better understanding of some of these line items.
  • 00:30:42
    I don't want to go line item by line item, but I will highlight health seems to have pretty clear descriptors, but other departments are not as clear to me as to what the request is for.
  • 00:30:55
    And I'm wondering maybe if I want to even make a motion to forward this without recommendation so that we could give departments an opportunity to
  • 00:31:03
    put some more information in here because I some of these are very clear and I support them and other ones I don't understand what it's for and I'd want to give it a little bit more scrutiny but I don't know if I'd need to do that if I had enough information.
  • 00:31:15
    So I direct question in the process were you given much more content than is available and what's presented here that we could just compile or would that be an extra request of department heads to provide more information?
• • George Hargrove
  • 00:31:31
    Yes, to answer your question, I do have one more report that's in more detail than the actual resolution itself.
  • 00:31:43
    It'll contain things like the purchase order numbers and what row they were.
  • 00:31:47
    on my report.
  • 00:31:48
    It kind of contains some information on project numbers and things like that.
  • 00:31:52
    What you're seeing on the resolution is what I copied over from the department's request.
  • 00:31:56
    So maybe for future reference, I should probably help edit it or maybe push some of them back or so, and I'll definitely take that under consideration, definitely next time around.
  • 00:32:05
    But no, I do have another more detailed report that pretty much follows the department's, how they're listed on the resolution.
• • Elliott Payne
  • 00:32:14
    Because I think I would like to see that additional detail before voting to approve this.
  • 00:32:20
    So I certainly wouldn't expect you to produce that on the fly here.
  • 00:32:24
    And so forwarding without recommendation, could that give us enough time to get some of that additional detail?
• • George Hargrove
  • 00:32:32
    Yeah, yeah, no, I could certainly, certainly the detailed report I can come up with very quickly.
  • 00:32:36
    If it got to the point where we wanted to go back to the departments, certainly we could do that on a one-by-one request or just in general have them look at it and beef it up.
  • 00:32:48
    But you're alright, you're totally correct.
  • 00:32:49
    Some departments describe things a little better than others.
  • 00:32:52
    So, you know, maybe we could start with the detail and then either let us know or certainly I'm happy to just let the departments review it as well too.
• • Elliott Payne
  • 00:33:01
    Yeah, cuz I it like I said some of these I are pretty self-evident and cleared I want to support moving forward other ones that I have questions about I'd hate to hold up departments that have provided clarity and Waiting for other departments.
  • 00:33:16
    So maybe what we can do is forward without recommendation If there's a second for that second
  • 00:33:22
    and then have you generate that report and get that to us and then maybe we could work together to flag here goes the ones that we want to separate out with more questions that need more detail and here's the ones that are ready to move forward yeah yeah yeah no no that's an excellent idea
• • Jayne Discenza
  • 00:33:40
    If I could just add through the chair a comment, you know, most of these items are as council president indicated in the first question items that contracts that the council has previously voted to approve and move forward and so The council has already given that authority to spend what was really happening in rollover is moving the budget dollars from 24 into 25 so that
  • 00:34:04
    Yeah, I'll just give some insight into where my head is at
• • Elliott Payne
  • 00:34:19
    we have a
  • 00:34:39
    should we have folks come forward requesting individual budget amendments as they're ready to move forward instead of this comprehensive rollover process.
  • 00:34:49
    But we're not taking on that policy decision today, but I do want us to have a little bit more of a grasp on when I see a dollar figure like 150 million dollars, especially under the current federal reality that we might be losing some federal funding.
  • 00:35:05
    I'm just wanting us to have a little bit more oversight of this process.
• • Aisha Chughtai
  • 00:35:08
    So just to conclude, there is an additional report that includes details about each of these rollover requests that our controller will follow up with us on so that we can review that prior to Council on Thursday.
  • 00:35:28
    Great.
• • SPEAKER_08
  • 00:35:29
    CFO Dai, go ahead.
  • 00:35:31
    Chair Chuktai, Council President Payne, just wanted to clarify what a rollover is.
  • 00:35:37
    I think Controller George Hargrove kind of talked through, you know, it must be a valid encumbrance.
  • 00:35:45
    That also means that you all have approved whatever it is that we're asking to roll over, right?
  • 00:35:52
    We do have an obligation to pay these vendors that do have contracts.
  • 00:35:58
    So if we don't roll over the funds, all that means is that we will probably be spending 2025 budget allocation.
  • 00:36:07
    So we'll probably be in the hole for the amount that
  • 00:36:12
    that's not rolled over from prior year.
  • 00:36:14
    Also, this is a part of our year-end exercise to be able to close out our books.
  • 00:36:20
    I just want to make sure that that's not delayed as we have a requirement to complete our financial statements by June 30th.
  • 00:36:28
    Thank you.
• • Aisha Chughtai
  • 00:36:29
    Wonderful.
  • 00:36:29
    Thank you.
  • 00:36:32
    Council Member Chowdhury.
• • Aurin Chowdhury
  • 00:36:35
    yes thank you so much madam chair I don't have a question just more so a comment in the discussion that we're having I think for me
  • 00:36:46
    This rollover process from the perspective of council is a really good opportunity, as other colleagues have kind of noted, to understand the ways in which our enterprise is spending money or not spending money within a certain time frame.
  • 00:37:02
    All of these items don't dispute that we approved.
  • 00:37:06
    That's how it got done, but just coming into this rollover process
  • 00:37:11
    having more transparency and understanding of what are the contracts that we have to fulfill?
  • 00:37:16
    What's contracted versus non-contracted?
  • 00:37:18
    I think that's a question that I'm getting just from the comment that CFO Dye made.
  • 00:37:25
    We do want to fulfill those contracts if those are in existence, but what I have before me doesn't necessarily give the clarity of these are the contracts that we are on the hook for versus the contracts we aren't on the hook for.
  • 00:37:36
    And then I also will agree with Council President on
  • 00:37:41
    just better details on what's being rolled over, right?
  • 00:37:44
    Like one example that I can see that's pretty clear is we have cultural slash community media programming listed four times as different items and it's like what is the difference between those items in terms of what we're rolling over.
  • 00:37:59
    For me that's important to get an understanding so I have a good understanding of how we're spending money and
  • 00:38:06
    in a calendar year versus not and then what we're rolling over into.
  • 00:38:12
    And I think this is also an exercise for us to think about how we're going to approach our budget process this next year.
  • 00:38:20
    It's not something that's separate from the discussions that we'll be having as we're work planning and then also setting up our priorities as council members in tandem with the mayor's administration and the discussions that we'll have.
• • Aisha Chughtai
  • 00:38:37
    Thank you.
  • 00:38:38
    Next, I'll recognize Councilmember Wonsley.
• • Robin Wonsley
  • 00:38:42
    Thank you, Chair.
  • 00:38:43
    Yeah, I just also wanted to flag another one, for instance, where we're just saying we want a little bit more transparency around certain programs that yes, Council has already approved allocations towards and then we are trying to get a sense of are there challenges in spending down that money as Councilmember Chaudry highlighted during a certain time frame like I'm thinking, for instance,
  • 00:39:06
    Hate Crime Prevention 2024.
  • 00:39:08
    Last year, we spoke a lot about the hate crimes that were happening in our respective wars across the city and wanting to know, and I believe this was the exact amount that's being rolled over that was appropriated by council.
  • 00:39:22
    I would have hoped to see a lesser amount to indicate that there were some spending of this to be directed at addressing that problem across the community.
  • 00:39:33
    and that says something if there's not.
  • 00:39:35
    So we want to get a sense of why is that not being spent when we know especially in a climate like ours right now under Trump and even prior to that
  • 00:39:45
    where we're hearing about hate crimes and attacks and we're passing items, legislative motions that's being responsive to hate crimes like Davis-Maturi, for instance, just a few months ago.
  • 00:39:57
    Why aren't those being spent?
  • 00:40:00
    Why are the funding towards programs that council are moving forward with are not being spent?
  • 00:40:06
    That is something of concern.
  • 00:40:08
    And if we only see in the description that's saying hate crime prevention 2024, that's not sufficient.
  • 00:40:14
    So I would love to see some more detail as to what's going on with that, for instance.
• • Aisha Chughtai
  • 00:40:23
    Thank you.
  • 00:40:23
    I'm not seeing any further discussion.
  • 00:40:28
    And so we have a motion to forward this item without recommendation that's been properly seconded.
  • 00:40:35
    I'll ask the Clerk to call the roll on that.
• • SPEAKER_13
  • 00:40:39
    Council Member Payne?
• • Elliott Payne
  • 00:40:40
    Aye.
• • SPEAKER_13
  • 00:40:42
    Monsey?
  • 00:40:42
    Aye.
  • 00:40:44
    There are ten ayes and zero nays.
• • Aisha Chughtai
  • 00:41:12
    That motion carries.
  • 00:41:13
    This item has been forwarded to Thursday's council meeting without recommendation and we'll keep an eye out for a more detailed report from Controller Hardgrove.
  • 00:41:22
    Thank you so much for your presentation.
  • 00:41:25
    We'll now move to item number three which is a biannual personnel report.
  • 00:41:32
    This is the first of two personnel reports that we'll be receiving this year I'll invite Deb Krueger, Director of Human Resources Operations, to begin that presentation
  • 00:42:29
    Welcome, Director Krueger.
• • Deb Krueger
  • 00:42:31
    Thank you.
  • 00:42:33
    Good afternoon again, Chair Chogtai, Budget Committee members.
  • 00:42:37
    My name is Deb Krueger, Director of HR Operations.
  • 00:42:40
    I will be presenting the biannual personnel report today, the summary of.
  • 00:42:46
    Before I begin, I'd actually like to thank you, Chair Chogtai, for
  • 00:42:50
    Agreeing and being amenable to moving the date the presentation of this report from February in order for us to really provide a more complete accurate report as we completed February was a little too soon as we completed year-end 2024 activities and then are able to get the budget the budget documents for q1 of 2025 and we were also completing the annual
  • 00:43:15
    Workforce Reconciliation process with departments reconciling their workforce data in the HR system to the 2025 budget FTE count and doing that alignment.
  • 00:43:25
    So thank you so much for your flexibility in the date.
  • 00:43:30
    On that note, I'd also like to thank the budget office and the department liaisons.
  • 00:43:34
    They have worked really hard and diligently reconciling our HR system workforce FTE counts and position data against and aligning to the budgeted FTE counts for 2025.
  • 00:43:51
    We used a new process this year.
  • 00:43:54
    the budget office pretty much met one-on-one with each department spent months reconciling data and making those cleanups in our HR system so that we can have some more streamlined reporting and it really improves our workforce reporting process so thank you to the budget office as well.
  • 00:44:13
    So a little bit about the biannual personnel report.
  • 00:44:17
    This is in response to the council legislative directive and is in support of the budget committee's work plan.
  • 00:44:24
    The full report was prepared by the Human Resources Department and the Finance Budget Office.
  • 00:44:35
    The last biannual personnel report was presented in August of 2024.
  • 00:44:39
    And today's presentation will provide a summary of both city and departmental approved FTEs, the status of those positions, personnel expenses,
  • 00:44:53
    cost-saving initiatives within departments and personnel administrative actions here to date.
  • 00:45:00
    The full detailed report is available in LIMS, the Legislative Information Management System, and I'm going to apologize in advance.
  • 00:45:08
    There is an updated version of both the PowerPoint and the report
  • 00:45:12
    there was a calculation error in the overtime expenses and an update.
  • 00:45:17
    They have been provided to the clerk's office and have been updated and uploaded in LIMS.
  • 00:45:25
    And last but not least, I just want to make a distinction that at least from the workforce data, the workforce data that's in the report is with data effective March 20th of 2025.
  • 00:45:46
    So the workforce summary... Oh, actually before I begin, I would like to just make one clarification.
  • 00:45:56
    There's a bit of a disconnect in the legislative directive.
  • 00:46:00
    So the workforce data and all of the data that you're going to see throughout my presentation and that is also in the report is based on budgeted approved FTEs.
  • 00:46:10
    So the full-time equivalent of a full-time position.
  • 00:46:14
    We do have
  • 00:46:16
    about a hundred and sixty less than full-time positions throughout the city anywhere from you know point a point five like a half of an FTE to intermittent positions of like point two percent of an FTE and so when we talk about you know to report out the approved budgeted and in legislative directive calls employees we don't budget on employees we budget on on FTEs so throughout this report you're going to see FTEs which may be different
  • 00:46:44
    from the number of employees we actually have actively working at the city, okay?
  • 00:46:48
    I just wanted to make that distinction, that it won't be the number of employees necessarily, but the number of FTEs.
  • 00:47:01
    In 2025, the FTE count for the city is, that was council approved in the 2025 budget
  • 00:47:12
    adoption is 4,272.61 FTEs.
  • 00:47:15
    In addition to that, year to date, there have been 3.3 FTEs added to the budgeted FTE count through the approved administrative add process that I will speak to a little bit more in depth in an upcoming slide.
  • 00:47:38
    Which brings us to a total of 4,200 and almost
  • 00:47:41
    4,276 FTEs at the city.
  • 00:47:44
    That represents an increase of 81 FTEs, which is a 1.9% increase overall FTE count from 2024 approved FTEs.
  • 00:48:00
    Of those 4,276 FTEs, almost 99% of them are full-time positions.
  • 00:48:10
    The remaining 1.2% are part-time or intermittent in nature and the majority of those positions are in the convention center and due to the event driven nature of their staffing needs.
  • 00:48:26
    Of the 28 city departments,
  • 00:48:29
    We have a wide range of FTEs in each department ranging in size from a little over a thousand FTEs in the Public Works Department down to the smallest department of six FTEs in Arts and Cultural Affairs.
  • 00:48:46
    The workforce summary and the numbers within both the presentation and the full report does exclude, much like the schedule five of the 2025 budget book, does exclude capital-funded, temporary, and short-term grant-funded positions.
  • 00:49:02
    Those aren't, you know, sort of the regular permanent year-round positions.
  • 00:49:08
    So they are also not included in the workforce summary and in the report so that it matches to the schedule five of the 2025 budget book.
  • 00:49:17
    and again the full report does show the council approved FTEs by individual city departments.
  • 00:49:33
    As of March 20, 2025, 90% of those 4,276 FTEs, the positions that are associated with those FTEs, have been filled.
  • 00:49:45
    That is a 1% increase in filled positions over the previous report in August of 2024.
  • 00:49:53
    Seven city departments are fully staffed.
  • 00:49:56
    Those are primarily departments that are smaller in nature or medium-sized.
  • 00:50:04
    there are also 100, so in addition to the 4276 approved and budgeted FTEs there are also an additional 105 FTEs that technically are considered over allocated within departments above and beyond their approved FTE count.
  • 00:50:24
    Many of them are
  • 00:50:26
    There are some departments that have an allowance.
  • 00:50:38
    to sort of overfill the number of positions that are historically high turnover.
  • 00:50:48
    And they are also positions that have a longer time to fill hiring process.
  • 00:50:56
    For instance, in 911 with their 911 operators call takers, dispatchers, the fire with firefighters, and in 311.
  • 00:51:10
    There are also five FTEs that are either funded through one-time public safety aid funding or other short-term funded positions where the funding is from an external source.
  • 00:51:23
    That is also, again, not part of the approved council FTE count.
  • 00:51:29
    And most of the remainder of the 105 are around trainee, apprenticeship, pathway program positions where the
  • 00:51:41
    Those jobs are created as sort of an alternative approach to hiring for some hard-to-fill positions primarily in fire with firefighter cadets, EMS internships, police with their community service officer, police cadet, peace intern pathways programs, public works with their public service worker trainees, water distribution operator trainees,
  • 00:52:11
    Auto Mechanic trainees, some apprenticeship programs, and again, that alternative approach to be able to hire hard-to-fill positions.
  • 00:52:21
    These are funded positions as in they use the vacancy savings from those sort of full entry-level positions to fund the Pathways programs so that we train individuals to become qualified for those full entry-level positions.
  • 00:52:39
    The vacancy savings from those full positions that are budgeted is used for the trainees so that when they graduate from their training or pathway program, they move into that full role.
  • 00:52:54
    So again, the funding there then exists largely through the vacancy savings of those full-time positions for the pathways and the trainees and the apprenticeships, as well as overtime savings, which is those positions that are allowed to overfill due to historical high turnover, and buyer and 911.
  • 00:53:23
    In addition, the city departments do take the opportunity to utilize the skill sets of temporary employees to supplement their regular staff for various reasons.
  • 00:53:44
    As of March 20th of 2025, there were 509 temporary FTEs enterprise-wide.
  • 00:53:49
    363 of those were election judges.
  • 00:53:53
    49 are interns.
  • 00:53:54
    20 FTEs are temporary or permit employees.
  • 00:54:01
    Again, temporary in nature, either to backfill a vacant position as that position goes through the hiring process or on a special project basis.
  • 00:54:14
    and then there were also 78 outside trades, skilled workers, primarily in the convention center, which is their stagehands who do the lighting for their events, CPAD, and in public works for their construction season, and finance property services for their skilled, like carpenters, plumbers, electricians.
  • 00:54:41
    The temporary employee numbers are down significantly from the last report, where it was like 3,000.
  • 00:54:46
    Primarily that had to do with election judges.
  • 00:54:48
    It's kind of that natural reporting difference in the reporting cycles.
  • 00:54:56
    Quite a bit fewer elections judges, again, like right now at this time of the reporting,
  • 00:55:03
    It's outside of the normal internship season that will primarily start in May and then go through August or September, so we might see higher numbers there in the next report in September.
  • 00:55:14
    And then as well for outside trades, again, much lower for public works.
  • 00:55:18
    Their construction season is just beginning, and so they've started to hire but have not reached their peak in hiring yet for those outside trades.
  • 00:55:32
    Pardon me.
  • 00:55:35
    Vacant positions, 10% of the authorized budgeted positions are vacant which comprises 404 vacancies.
  • 00:55:46
    The highest vacancy rates within the city are in the police department.
  • 00:55:50
    They are at about 16% vacant positions, which is down from 22% from the last report.
  • 00:55:58
    Public Works, 9% vacancy rate, again down from 11% in August of 2024.
  • 00:56:05
    And the Convention Center at 22% vacancy rate, again down from 24% in August of 2024.
  • 00:56:13
    Departments have been very diligent in filling their vacant positions and we've had a lot of success in recruitment and our applicant numbers are higher.
  • 00:56:24
    43% of those vacant positions have been vacant for six months or less.
  • 00:56:29
    41% have been vacant 12 months or longer.
  • 00:56:36
    However, I will note that 90% of those positions that have been vacant 12 months or longer are either sworn police or those positions which are hired on a seasonal basis.
  • 00:56:49
    Within primarily public works,
  • 00:56:52
    Convention Center or where there's class hiring like in fire.
  • 00:56:59
    For these 404 vacant positions, the hiring status and the hiring plans for those positions, I'm going to take the sworn vacancies out of the mix for a minute.
  • 00:57:12
    There's 136 sworn vacant positions.
  • 00:57:15
    So out of the 268 non-sworn vacant positions, 56% of those
  • 00:57:21
    They're actually either in an active hiring process right now.
  • 00:57:26
    We're accepting applications or we're screening applications or they're interviewing or making job offers.
  • 00:57:32
    Or they're in that sort of pre-process of getting a position up for recruitment and accepting applications.
  • 00:57:38
    They're doing job, their job posting development.
  • 00:57:43
    And 44% have an upcoming recruitment sometime, most of them generally through June.
  • 00:57:50
    They're intending to start the recruitment process.
  • 00:57:52
    It's either a new vacancy, like recent turnover, or a new vacancy from the 2025 budget process.
  • 00:58:02
    There's about 30 positions on this list that are in the classification process at this moment, and then they'll move into a hiring process.
  • 00:58:12
    Or it's seasonal hiring, and so throughout the year, those seasonal processes will begin.
  • 00:58:20
    or some departments are in the middle of a reorganization and so they may be changing their positions up a little bit or they are revamping the job duties slightly to align better with their business needs before they post those positions.
  • 00:58:38
    Overtime expenses, and again, I believe this new slide has been uploaded in LIMS.
  • 00:58:44
    There was a calculation error.
  • 00:58:47
    On this particular slide, overtime expenses, $10.9 million is budgeted in 2025 for overtime expenses.
  • 00:58:57
    $7.4 million has been spent on overtime year to date, which leaves 32% of budgeted overtime remaining for 2025.
  • 00:59:12
    with 75% of the year remaining.
  • 00:59:16
    So, overtime expenses are high so far for, you know, this was through, and I believe these dollars went through and this data went through March 31st, so the end of Q1 of 2025.
  • 00:59:33
    And there is a, in the report, there is a list of the departments that have overtime spend against their budget.
  • 00:59:42
    a budgeted amount.
  • 00:59:45
    Personnel administrative actions
  • 00:59:53
    For this report really comprises, again this is a year to date, what are the personnel administrative actions that have occurred really comprising two different types of personnel admin actions.
  • 01:00:06
    In terms of vacant positions where titles have been changed from what they were originally budgeted at to what they're being posted at as the positions vacant.
  • 01:00:16
    and or where a position has simply been reclassified, typically where there's an incumbent in the position.
  • 01:00:22
    There have been 19 job title changes or job reclassifications completed year to date.
  • 01:00:29
    That full list is in the detailed report.
  • 01:00:33
    And again, 3.3 FTEs have been added administratively and fully funded from the department's non-personnel budget.
  • 01:00:44
    and one of the requests and items in the legislative directive was sort of the budgetary impact of reclassifications and other administrative actions and the budget office is in the process of identifying those budgetary impacts of the reclassifications.
  • 01:01:03
    It occurs Q2 annually.
  • 01:01:05
    They're in the process of that right now.
  • 01:01:11
    Cost savings initiatives.
  • 01:01:15
    again in the report there is a full listing of the cost-saving initiatives that each city department is undergoing or is in the process of
  • 01:01:25
    analyzing what their actual cost savings are.
  • 01:01:29
    So in the full report that you will see, it's really more of a description of what changes they're looking at, particularly beginning now in 2025, which really aligns very closely with the mayoral 2026 budget ask of no new spend, right?
  • 01:01:45
    Let's maximize our resources that we have.
  • 01:01:48
    and so the departmental responses to what they're doing to save costs is really a wide range of initiatives.
  • 01:01:59
    The majority of those have been centered around technology adoption and workforce optimization.
  • 01:02:05
    Technology adoption to automate, many departments, to automate streamlined processes.
  • 01:02:11
    They can realize some efficiencies, some effectiveness, where they can maximize their existing resources and or reduce costs, either personnel or non-personnel costs through the adoption and automation of new technology.
  • 01:02:28
    Workforce Optimization.
  • 01:02:30
    Many departments are reevaluating, realigning job duties, job assignments, doing sort of the same with less, looking at ways of sharing costs of like administrative staff, and reducing critical overtime expenses.
  • 01:02:48
    Other departments have reported some of their cost-saving initiatives around resource sharing and also analyzing fleet and maintenance costs and fleet pool sharing and those types of ideas.
  • 01:03:06
    and then personnel budget, the budgeted personnel funding amount versus spend to date.
  • 01:03:16
    The 2025 personnel budget across the city is $623 million, roughly.
  • 01:03:23
    And through Q1 of 2025, which is March 30th for the 31st, $113.4 million has been spent.
  • 01:03:32
    So 82%
  • 01:03:34
    of the personnel budget is remaining for 2025.
  • 01:03:37
    I will stand for questions.
• • Aisha Chughtai
  • 01:03:43
    Thank you for that presentation, Director Krueger.
  • 01:03:48
    Colleagues, are there any questions or discussion related to this biannual personnel report?
  • 01:03:54
    I will first recognize Councilmember Palmisano followed by Vice Chair Koski.
• • Linea Palmisano
  • 01:04:00
    Thank you Madam Chair.
  • 01:04:01
    Ms. Krueger, just a quick clarification.
  • 01:04:03
    For those positions that have been vacant for more than 12 months but were listed, actually, sorry, you answered that one.
  • 01:04:15
    On the vacancy report, not your presentation, starting on page 9, what are some of the reasons why departments have listed intentionally holding?
  • 01:04:23
    Is it what you just said a few minutes ago, which this is about reclassifications or reorganizations or even seasonal hires?
• • Deb Krueger
  • 01:04:32
    Those are primarily the reasons.
  • 01:04:34
    A few of the others, they're holding
  • 01:04:37
    Some vacant positions that are sort of at a lower level Because the the hierarchical positions that report Are also vacant so they're going to be hiring the supervisor the manager the director right before they then open up The other positions that report into that person so that they have input into the hiring process.
• • Linea Palmisano
  • 01:04:57
    I see that makes sense.
• • Deb Krueger
  • 01:04:58
    Thank you You're welcome
• • SPEAKER_02
  • 01:05:02
    Thank you, Vice Chair Koski.
  • 01:05:04
    Thank you, Madam Chair.
  • 01:05:05
    Thank you, Director, for the presentation.
  • 01:05:09
    If we go to the overtime expenses, I'm just curious to know if there is a plan to cover the overtime.
  • 01:05:18
    It looks like we are going to go over the budgeted $10.9 million and what the plan is when that happens.
• • Deb Krueger
  • 01:05:29
    Chair Shartai, Council Member Koski, that is a wonderful question.
  • 01:05:32
    I would invite the budget office
• • Jayne Discenza
  • 01:05:39
    Through the Chair, Council Member Koski, you'll typically see those sort of discrepancies with overtime with the police budget, for example, and this is one area where the charter minimum with the number of sworn staff comes into play.
  • 01:05:52
    So we have vacancies that we know are going to persist and are not likely to be filled and so often those vacancy savings for those sworn officers will go instead towards overtime.
• • SPEAKER_02
  • 01:06:04
    okay so that's helpful because I do know that we utilize that vacancy savings for that but I didn't know if that was already part of this equation so at some point this will get reconciled and we will not be because we'll be using the vacancy savings from either the sworn offices or other roles
• • Jayne Discenza
  • 01:06:24
    Through the Chair, Council Member Koski, will it be reconciled?
  • 01:06:30
    You know, those funds are required to be allocated for the positions, but it is a bit of a dance that we do with the budget to the actuals, particularly for police over time.
• • SPEAKER_02
  • 01:06:41
    Okay, thanks.
• • Aisha Chughtai
  • 01:06:48
    Thank you.
  • 01:06:49
    I'm not seeing any further questions or discussion.
  • 01:06:55
    Council President Payne.
• • Elliott Payne
  • 01:06:57
    Thank you Vice President.
  • 01:06:59
    I know one of the times we went through this vacancy report we had some pretty extreme outliers in terms of the length of time that there were vacancies and I think there was a problem with the data and reporting and just the systems.
  • 01:07:13
    Have we resolved that issue and can we expect this report to not reflect any of those errors or is that a persistent thing that we're going to be trying to navigate?
• • Deb Krueger
  • 01:07:25
    Through the Chair,
  • 01:07:27
    Council President Payne.
  • 01:07:29
    Generally speaking, yes many of those, we've identified where many of those issues came from and have made corrections and we're continuing to.
  • 01:07:36
    There are still a few outlying departments where
  • 01:07:39
    We're trudging through the workforce data in the HR system.
  • 01:07:44
    There are some system limitations in our current system where, particularly around outside trades positions that are budgeted through the council approval process, and they tend to hire them through a union hall.
  • 01:08:01
    they come in as a temporary employee so it makes it look right like that position has been vacant since 2017 when really it's been just filled in a different way and so being able to tie those together we are working with departments to find some alternative ways to identify that they haven't been sitting there vacant that whole time they've just been filled through an alternative method thank you
• • Aisha Chughtai
  • 01:08:27
    Thank you.
  • 01:08:28
    Now, seeing no further questions, never mind.
  • 01:08:33
    Councilmember Chaudry.
  • 01:08:34
    Sorry, we always just get right under the buzzer chair.
• • Aurin Chowdhury
  • 01:08:37
    I don't have any particular questions, I just wanted to state that this report was really, really helpful and detailed.
  • 01:08:46
    I think there's just like a lot to process here and follow up on, so just appreciative of you putting this together and just
  • 01:08:53
    Thank you to the authors of the legislative directive for working on this.
  • 01:08:59
    I see this as kind of a good marker for information that we'll be needing to go back to as we go through our work on the budget this year together.
• • Aisha Chughtai
  • 01:09:12
    Thank you.
  • 01:09:12
    Okay, I'm now not seeing anyone else in queue.
  • 01:09:18
    So with that, I'll direct the clerk to file this report.
  • 01:09:23
    And with that, we have concluded all business to come before the committee today.
  • 01:09:29
    And if there is no Oh,
  • 01:09:32
    No, you're right.
  • 01:09:33
    Oh my god, I'm so sorry.
  • 01:09:36
    No, we have a pretty meaty item still.
  • 01:09:40
    Okay, final item on our agenda.
  • 01:09:41
    Item number four, receive and file.
  • 01:09:44
    This is a presentation on the 2024 fourth quarter financial status report on select city funds.
  • 01:09:50
    And once again, I will invite Controller George Hargrove to come back and present this item.
• • George Hargrove
  • 01:10:42
    Okay, thanks.
  • 01:10:43
    Thanks again, Chair Chogtai, City Council members.
  • 01:10:47
    My name is George Hardrove, Controller for the City.
  • 01:10:50
    I'm here to present the fourth quarter financial status report.
  • 01:10:56
    So going on, moving on here now.
  • 01:11:00
    This report reflects our financial results as of December 31st, 2024.
  • 01:11:08
    We have closed period 12, which means that most of our, almost all of our operational activity is in this report.
  • 01:11:17
    However, it's still a point in time report.
  • 01:11:19
    We still have final audit adjustments, for example, like in the self-insurance fund, we're still
  • 01:11:24
    waiting for some information from our actuarial firm to complete the liabilities.
  • 01:11:29
    So there's still some more adjustments.
  • 01:11:31
    So it is unaudited.
  • 01:11:33
    The state auditors are working on auditing our financial report but that won't be complete until later on this spring or so.
  • 01:11:42
    As I said before too, like I say, this is a point in time subject to audit adjustments and even though there's no forecasts or anything on this report, it is the numbers from our system, we still recommend to check in if there's wishes to move things around or things like that.
  • 01:12:05
    As far as our financial highlights, basically I would say in one word it's been fairly stable in the last year, in 2024.
  • 01:12:16
    You can see our first bullet point, I think we mentioned last fall, that all three major rating agencies have rated us the AAA bond rating.
  • 01:12:26
    Other good news, the parking revenues are rebounding They're up about five million dollars from what we experienced in 2023 Pretty much back to pre-pandemic We hope that the parking can get back to their required minimum balances sometime this year or early next year
  • 01:12:48
    Property taxes were a little lower than expected.
  • 01:12:52
    We were about $22-23 million under, mainly due to non-collections of assessed values.
  • 01:13:00
    However, on the other side, as far as the local sales taxes like the entertainment tax, food tax, things like that, our downtown assets fund has done much better.
  • 01:13:11
    and they were up about nine, almost ten million dollars from 2023.
  • 01:13:15
    Then the other major highlight I think for the city during this last year was our ARPA.
  • 01:13:21
    That stands for the American Rescue Plan Act that was passed back in 2021.
  • 01:13:28
    Through council action we were able to close that in November of 2024, so all remaining spending was put on the general fund at that point.
  • 01:13:39
    Continuing on with our financial highlights, the total book value of our cash investments is about 1.233 million.
  • 01:13:48
    Just a slight decrease from 2000, from 2023, the end of 2023.
  • 01:13:55
    That again is pretty much most of the balances in our cash accounts and all the different funds.
  • 01:14:05
    Most of that is invested in treasury bills.
  • 01:14:23
    Moving on to a little bit more details.
  • 01:14:26
    You can see our self-insurance fund, as I mentioned earlier, is still being finalized.
  • 01:14:31
    However, it is below target in terms that it has a negative net position.
  • 01:14:38
    It's a little better than we thought last fall, about 47-48 million versus a little over 50 million.
  • 01:14:46
    I am happy to report, though, that the cash balance has got up now to about 175 million.
  • 01:14:52
    Another area that's not quite meeting our fund balance or cash balance requirements is fleet services The cash balance is about 8.3 million or so, which is above the target But we did forecast that to be below the target, but they didn't have enough deliveries of vehicles and other capital equipment at the end of the year
  • 01:15:13
    to spend it down below the level, but we continue to watch that.
  • 01:15:19
    As I mentioned before, the parking fund is doing better, cash balance is still below the target, but it has improved and it's gotten better since the end of 2023.
  • 01:15:29
    And then finally, property services is our last department that wasn't quite meeting our cash reserve target.
  • 01:15:38
    You can see they're about $900,000 under.
  • 01:15:45
    The next area I wanted to cover is really the general fund.
  • 01:15:49
    As I show on the slide here, this fund accounts for a lot of the finances for the city.
  • 01:15:57
    It calls for anything that's not required to be in a different fund, and generally those are enterprise special revenue and internal service funds.
  • 01:16:06
    You can see our cash balance is up.
  • 01:16:09
    is a little bit up from 2023.
  • 01:16:12
    Again, like I say, it reflects the stability of the city during the last year.
  • 01:16:19
    The next, in terms of the fund balance, I think this really is the kind of shows where we're at here.
  • 01:16:29
    We're at about 209 million versus 210 million.
  • 01:16:32
    So the city's been very stable, it's not better than it was a year ago, but it's not worse, really either.
  • 01:16:39
    Still exceeds the 17% minimum fund balance, which with the calculations from this last budget, it's about $112.7 million, so about $96, $97 million above that right now.
  • 01:16:52
    In terms of our 2020-2025 budget, we have about 24 million or so in plan use of fund balance.
  • 01:17:03
    Some of that is public safety aid.
  • 01:17:06
    Some of it is not.
  • 01:17:07
    It's about 5 million in public safety aid, about 20 million in other funds.
  • 01:17:12
    From the presentation earlier today, you can see our rollover request for the general fund is at 41.8 million.
  • 01:17:19
    and then I did talk about like say $15 million in public safety aid was left.
  • 01:17:23
    And then based on our fourth quarter projections, budget would be about 21% or so of the 25 proposed budget, which is about $27 million over the minimum.
  • 01:17:37
    And just to kind of look at the fund balance, the general fund balance in a little bit more detail,
  • 01:17:43
    You can see we have, like I say, we kept very steady, you know, it just went down about a million dollars in terms of the overall fund balance in the last year.
  • 01:17:51
    If you look at that in more details, like how did we get here, I would say we ended up with about 40 million less in revenue than we thought, but we also had 80 million less in expenses than budget as well too.
  • 01:18:04
    So that would have been a 40 million dollar gain, but the 24 budget used, had a
  • 01:18:10
    about 18 million dollars so use of fund balance and there was some rollovers as well to about 25 million or so.
  • 01:18:17
    So that's why it pretty much stayed the same even though we were a little bit favorable to budget but the budget contains some use of fund balances and rollovers.
  • 01:18:28
    You can see of the $209 million, you can see what we've restricted here.
  • 01:18:32
    The first two are the plan use of fund balances.
  • 01:18:35
    You can see that's about $24.6 million.
  • 01:18:38
    The ones in yellow here are about public safety aid versus about $19 million in non-public safety aid.
  • 01:18:45
    That's already been programmed in the 25 budget, so we have to restrict that because that'll be needed.
  • 01:18:51
    Should we exactly equal the budget in terms of our spending and revenue?
  • 01:18:56
    You can see in terms of the rollovers That's for the general fund about 41.8 million about 9.7 million of that is public safety aid and the other 32 million is non-public safety aid rollovers, so
  • 01:19:12
    So that gives us about $41.8 million total.
  • 01:19:15
    In that amount, there is about $3.3 million being rolled over to finance.
  • 01:19:19
    I think there was a question on that earlier.
  • 01:19:22
    So that's not programmed yet, but that continues to be in finance's budget awaiting programming.
  • 01:19:28
    Then you can see finally North Commons Park is also restricted for three million that was a formal Formal formerly ARPA project is not in the budget I don't believe in 2025, but we do have it restricted and and that could be used with your approval later on
  • 01:19:47
    So you can see about 69 million restricted out of our 209 million that leaves us about 140 million Our target would be 113 million gives us about 27 million or so an unassigned fund balance or so above the target
  • 01:20:03
    And obviously that's there to kind of finance a lot of future unknowns federal funds Of course a lot of things happening with that could potentially fill in gaps You know for using the use of fund balance and budgeting we have our self insurance fund That we'll need to look at again and certainly with lately with the market and the economy there's been some pretty big swings in that as well, too
  • 01:20:28
    So just give you a little bit more into the details of the of the general fund and some of the some of the revenues You can see there's really you know like as I mentioned before we were about 40 million under budget Most of that is in property tax so you can see that on the far left on the graph
  • 01:20:47
    and then the other one was the state aid or so since that was received in 2019.
  • 01:20:52
    So that makes up the bulk of the 40 million dollars or so in general fund revenue that we were under budget.
  • 01:21:01
    If we look at the timing of the revenue, you can see that it was pretty consistent all year round.
  • 01:21:07
    We were generally under our three year average for all the quarterly reporting periods for the year.
  • 01:21:14
    Normally we're a little above our budget.
  • 01:21:19
    This last year we were a little under it or so.
  • 01:21:22
    Again, some of that was the public safety that was received earlier.
  • 01:21:27
    Looking at the details on the general fund expenditures, you can see there we have about 80 million dollars under budget or so.
  • 01:21:34
    A lot of that, some of that is in internal services.
  • 01:21:40
    The Finance Department was holding funds for public safety in the North Commons Park, so that wasn't all spent certainly in 2024.
  • 01:21:48
    So we were favorable there, so that counted for some of it.
  • 01:21:52
    A lot of the other savings was CPED, which was about $21 million or so in the general fund under budget as well, with health being about $3 million under budget.
  • 01:22:02
    So that really makes up the bulk of the $80 million or so that we finished under budget in the general fund.
  • 01:22:11
    In terms of the timing of the spending, again, that was also, just like the revenue, was also less than the three-year average.
  • 01:22:22
    You can see pretty consistently for all four quarters, March, June, September, December.
  • 01:22:27
    Normally we would spend about 94% of our budget.
  • 01:22:29
    This last year was about 89%.
  • 01:22:31
    So that's one reason why the rollovers were a little more.
  • 01:22:38
    Moving on to non-general funds, the next category in our fund family is the special revenue funds.
  • 01:22:46
    They're generally used to account for revenue that comes in with specific restrictions on it.
  • 01:22:53
    You can see we have the Convention Center and the Target Center as well as regulatory services.
  • 01:22:59
    Our grants are generally restricted.
  • 01:23:01
    CPED has quite a bit of special revenue as well too.
  • 01:23:05
    And you can see for the fund balance and the cash, they both decreased substantially from 2023.
  • 01:23:11
    That was expected given the closeout of ARPA and the push to spend the remaining ARPA funds during this last year in 2024.
  • 01:23:21
    So you can see that accounts for most of the large decrease in the cash and fund balance.
  • 01:23:27
    And these are set aside for use and are generally considered either non-spendable, restricted, or committed.
  • 01:23:36
    Looking at a little bit of the details here, you can see the convention center is one area that's down a little bit.
  • 01:23:44
    However, downtown assets, if you go down a couple of funds below that, you can see that's up.
  • 01:23:52
    Generally, that's a result of transfers.
  • 01:23:55
    As well as you can see the grant funds down below They were like say the the cash balance went down about 83 million dollars again.
  • 01:24:05
    That's mostly driven by ARPA fund balances down as well, too so so like I say your special revenue is going down, but mainly because of the ARPA program and
  • 01:24:16
    Internal Service Funds, these are funds that we use to keep track of departments or areas of departments that sell services to the rest of the city as opposed to selling services to the public.
  • 01:24:28
    You can see some of our biggest ones, our fleets, the equipment fund, property services, IT, our self-insurance fund.
  • 01:24:36
    Those make up the bulk of the internal service funds.
  • 01:24:40
    Here we had generally a modest increase, certainly in our debt position went up about 4 million dollars, our cash went up about 25 million dollars or so.
  • 01:24:51
    Going down a little bit more of the details in our internal service funds.
  • 01:24:55
    You can see some of the fund balance that went down is attributed to the fleet and the equipment area.
  • 01:25:05
    You can see both cash and net position are down there.
  • 01:25:10
    Conversely, IT is up a little bit, which is mainly intergovernmental services.
  • 01:25:15
    The rest of them are pretty
  • 01:25:16
    pretty, stayed pretty much the same.
  • 01:25:19
    Some improvements in the self-insurance fund as I noted earlier as well too.
  • 01:25:23
    So again, a little bit, a little bit, a little bit, doing a little bit better than the end of 2023 for this, for our internal service funds.
  • 01:25:35
    And finally, our last family of funds here is our enterprise funds.
  • 01:25:39
    These are departments in the city of Minneapolis that sell services to the public as opposed to selling them primarily internally that we just looked at.
  • 01:25:50
    Most of these are all in public works except for CPIT has an enterprise fund as well too, but most of this is in public works, the sewer, water, solid waste, parking.
  • 01:26:02
    You can see we had kind of a mixed bag in terms of results for the year in these funds.
  • 01:26:09
    The net position increased from 2023.
  • 01:26:11
    Our cash decreased a little bit, about 8 million dollars from 2023.
  • 01:26:17
    Again, these are mainly fairly stable funds that do finance their capital needs by selling bonds as well as
  • 01:26:29
    you know, having a fund balance as well to have a reserve.
  • 01:26:34
    Just looking at, finally looking at our details here, you can see again, you can see our sanitary sewer has been up both in terms of cash and net position, storm water is down, parking is up a little bit, you know, it continues to improve.
  • 01:26:52
    Otherwise, the CPED Enterprise Fund is fairly stable.
  • 01:26:58
    So again, you can kind of see that it's not a big difference from either our forecast from the last quarter when we did the Q3 forecast or just even looking back to the end of 2023, fairly stable in terms of Enterprise Funds.
  • 01:27:13
    So that's my, that concludes my presentation for the fourth quarter.
  • 01:27:17
    At this time I can take any questions that you have.
• • Aisha Chughtai
  • 01:27:20
    Thank you for that presentation.
  • 01:27:21
    Colleagues are there any questions or discussion related to this item?
  • 01:27:25
    I'll recognize Council Member Palmisano.
• • Linea Palmisano
  • 01:27:29
    Thank you.
  • 01:27:29
    Mr. Hargrove, I'm also glad that Downtown Assets Fund is doing well.
  • 01:27:34
    But when you mention that property taxes are under budget by almost $23 million due to a higher non-collectible amount, where do we make up for that loss of revenue?
  • 01:27:46
    Like, how does that get fixed?
  • 01:27:48
    Does it eventually get fixed over time?
  • 01:27:50
    I don't think we just say, you know, can you help me understand how do we account for that?
• • George Hargrove
  • 01:27:58
    When we do the budgets, the way we budget, we do know that not all property tax will be collected.
  • 01:28:06
    The way the city budgets is to put the full amount in revenue but then have a bad debt expense at the bottom.
  • 01:28:16
    and so I don't, I think in this case this last year we had more, we collected a little bit less than we thought we would when we net both the total revenue from property taxes and the bad debt.
  • 01:28:31
    So it was higher this year.
  • 01:28:33
    In the long run it will affect the fund balance if we were to continue to you know, you know, if for example of the economy Well, you know got bad or things like that.
  • 01:28:44
    We weren't collecting as much anymore than gradually over time Yeah, it would start to affect the fund balance and subsequent budgets Okay.
• • Aisha Chughtai
  • 01:28:52
    Thank you Any other questions or discussion
  • 01:29:00
    I'm not seeing any.
  • 01:29:01
    I will direct the clerk to file this report and now we have concluded all business to come before the committee today and without objection we stand adjourned.
  • 01:29:12
    Thank you everyone.