Budget Committee - September 10, 2025   9/10/2025

Roll Call

• • SPEAKER_04
  • 00:00:44
    All right.
  • 00:00:45
    Calling the St Paul City Council Finance and Budget Committee to order.
  • 00:00:49
    Good morning, everyone.
  • 00:00:51
    We have a really great presentation by this very singular Madeline Mitchell.
  • 00:00:56
    We are going to be reviewing the mayor's budget by the Office of Financial Services.
  • 00:01:04
    Please join me in welcoming the interim director of Office of Financial Services, Laura Logsdon, who is here.
  • 00:01:11
    Hello, Laura.
  • 00:01:12
    and Budget Manager Madeline Mitchell.
  • 00:01:13
    So the floor is yours, please take it away.
• • SPEAKER_01
  • 00:01:17
    Thank you.
  • 00:01:18
    Good morning Vice President Kim, Council members.
  • 00:01:20
    My name is Madeline Mitchell.
  • 00:01:21
    I'm the city's budget manager.
  • 00:01:22
    Thank you for inviting me here today to share an overview of the 2026 proposed budget.
  • 00:01:28
    Special welcome to Councilmember Coleman.
  • 00:01:30
    We're excited to work with you on your first budget process.
  • 00:01:34
    I will start with some summary level information.
  • 00:01:37
    I'll go into highlights, briefly review the capital budget, and then finally explain how this all comes together to impact the typical home in St. Paul.
  • 00:01:45
    There is a lot to cover in this budget.
  • 00:01:47
    The budget book is well over 300 pages.
  • 00:01:50
    I will focus on high-level themes today and then all departments will be presenting to you in the coming weeks with much more detail.
  • 00:01:57
    And my team and I are taking notes and we'll track your questions as they come up and provide follow-up as needed.
  • 00:02:04
    Before we start, I want to recognize the members of the budget team over here who have worked so hard on preparing this budget.
  • 00:02:11
    Mada Gera, Brian George, Shannon Forney, Michelle Botko-Woods, and Emma Schuster from Avis.
  • 00:02:16
    And just to brag for a minute here, the cyber attack occurred when we were right in the middle of our busiest crunch time.
  • 00:02:25
    The focus then shifted across the city to cyber response away from some of the detailed budget work, which was necessary.
  • 00:02:32
    And we lost access to many of the documents that we rely on to build the budget and produce a typical budget and produce that 300-page book.
  • 00:02:40
    but this team adapted really quickly.
  • 00:02:42
    They recreated analysis and tables and graphs that we no longer had access to, finding ways to automate some of our manual reports that had been saved on network drives, and kept supporting city departments as they also experienced the same loss of critical budget information.
  • 00:02:56
    So somehow this excellent team still managed to produce a pretty darn good budget book by our statutory deadline, so thank you team.
  • 00:03:03
    And I would also like to thank Interim Finance Director Laura Logsdon who has jumped right in on supporting
  • 00:03:08
    The work of this team, Director Logsdon's leadership, has been critical to the success of this budget.
  • 00:03:13
    Thank you, Laura.
  • 00:03:17
    All right, let's get into it.
  • 00:03:19
    So at the highest level, the 2026 proposed operating budget is about $887 million.
  • 00:03:25
    This includes a 5.3% property tax levy increase.
  • 00:03:30
    It funds nearly 3,200 FTEs and features three themes, housing and economic opportunity.
  • 00:03:36
    As you've heard before, every year we start the budget process with a gap in our general fund budget.
  • 00:03:47
    This is because the cost of doing business, of just doing the same thing we did last year, gets more expensive every year.
  • 00:03:53
    And our revenues don't automatically grow to keep pace.
  • 00:03:56
    For 2026, our starting budget gap is $23 million, made up of inflationary salary and fringe growth,
  • 00:04:02
    Reabsorbing costs from the ARP face-off, funding the debt levy, and covering other obligations like utilities, property insurance, and the City's contribution to the Ramsey County Dispatch Center.
  • 00:04:12
    Again, this is before adding any spending.
  • 00:04:14
    About 80% of the budget gap is driven by employee expenses, which is proportional to the amount of general fund expenses spent on personnel.
  • 00:04:22
    This also includes $1 million for the new paid leave program that will go into effect on January 1st.
  • 00:04:27
    We're really proud to invest in our workforce, but these are real and rising costs that we must budget for.
  • 00:04:32
    For reference, a 1% increase to the property tax levy yields about $2.1 million in revenue for the city.
  • 00:04:38
    So if we were to close the gap with only property taxes, this would mean a nearly 11% increase.
  • 00:04:43
    Just to cover the salary and benefit growth, it would be a 7.7% increase in the levy.
  • 00:04:48
    In addition to our standard inflationary pressures, we're also facing a lot of external risks, tariffs, to funding volatility at state and federal levels, to the very targeted attacks on our state by the Trump administration.
  • 00:05:00
    And finally, shifts in property values are changing who pays what.
  • 00:05:05
    As commercial and apartment values fall, homeowners are carrying more of the tax burden.
  • 00:05:08
    We take this shift very seriously when we're setting money.
• • Rebecca Noecker
  • 00:05:13
    I'm curious about the 1.9 million ARP reductions for expiration.
  • 00:05:25
    I know we need a separate report on ARP spending, but given that we de-federalized a lot of those dollars and moved them into the general fund, what does that actually mean in terms of the budget?
  • 00:05:34
    Are we actually losing 1.9 million or is it just that's the expiration date should those funds have been left as ARP funds?
• • SPEAKER_01
  • 00:05:42
    We did de-federalize a lot of funds, but there were some that continued to be funded with remaining ARP dollars.
  • 00:05:50
    This in particular $1.9 million was for mill and overlay.
  • 00:05:53
    Those were costs that had been in the general fund moved to being funded with the American Rescue Plan dollars and now are coming back as planned.
• • Rebecca Noecker
  • 00:06:00
    Thank you.
• • SPEAKER_01
  • 00:06:06
    All right.
  • 00:06:07
    We often refer to the budget as a values document, but it is also a document full of really hard trade-offs.
  • 00:06:13
    So when we talk about balancing the budget or closing the budget gap, we have three levers to pull that can get that gap to zero.
  • 00:06:21
    We can increase the property tax levy, we can reduce spending, or we can find new non-property tax revenue.
  • 00:06:28
    We have control over some of those non-property tax revenues in that we can set rates and fees
  • 00:06:33
    but much of that non-property tax revenue growth is volume driven or stationary or in some of our pension aids and local government aids it's set by other bodies.
  • 00:06:42
    That leaves property taxes and spending reductions as our most powerful tools for balancing the budget and using either of those tools have real impact on our community and need to be balanced within the greater picture of our goals for the city.
  • 00:06:55
    These are tensions that the mayor and his team have grappled with during the production of this proposed budget
  • 00:07:00
    and Tensions, you all will now take on as you consider changes you'd like to see in the adopted budget.
  • 00:07:09
    Here are the components of how that $23 million gap was closed in the 2026 budget.
  • 00:07:15
    A 5.3% property tax levy increase amounted to around $11.5 million in revenue.
  • 00:07:22
    We were also able to update projections to book an additional $4.1 million in non-levy revenue.
  • 00:07:28
    Next, we worked closely with departments to review staffing levels and identify vacancies that could be removed from the budget.
  • 00:07:35
    It's really important to note here that these positions were not unnecessary or unimportant.
  • 00:07:40
    Rather, the elimination of these vacancies reflects a commitment to our current employees.
  • 00:07:45
    This is so we can make sure everyone who is currently employed at the city still has a job in St. Paul.
  • 00:07:51
    Removing these positions from the budget saves approximately $2.9 million.
  • 00:07:55
    The budget also includes $5.4 million in department reductions.
  • 00:07:59
    Each department will present to you in the coming weeks about their specific reductions, but these range from canceling underused service contracts to backfilling positions at lower levels to reducing hours at some city facilities.
  • 00:08:10
    Departments across the city are tightening their belts.
  • 00:08:13
    There is a small amount of new spending, auto milling.
  • 00:08:16
    This includes a net increase of 166,000 for a team within the City Attorney's Office to manage the city's significant volume of data requests.
  • 00:08:23
    This 166,000 is supplemented by the reallocation of existing 1.5 FTEs.
  • 00:08:29
    We've also made necessary investments in the city's technology and cyber security infrastructure totaling just under 500,000 in the general fund.
  • 00:08:37
    There's also additional investment of 700,000 for cyber security from a special fund that's not reflected on this slide.
  • 00:08:44
    Finally, the General Fund budget invests an additional $200,000 to support the work of our district councils.
  • 00:08:49
    Overall, this budget focuses on providing stability for our employees, not getting the can down the road.
• • Saura Jost
  • 00:08:55
    Councilmember Jost.
  • 00:08:56
    Thank you, Chair Kim.
  • 00:08:58
    I have a question about two things on that slide.
  • 00:09:02
    So the inflationary revenue growth of $4.1 million, how accurate is that?
  • 00:09:07
    Is that pretty conservative, or how do you estimate that value?
• • SPEAKER_01
  • 00:09:12
    Chair Kim, Councilor Dost, it really depends on the revenue.
  • 00:09:16
    Some of them we have a lot more data on.
  • 00:09:19
    Some of them we do our best to estimate.
  • 00:09:21
    So I would say it is somewhere in between aggressive and conservative.
  • 00:09:27
    It's pretty much right down the middle.
• • Saura Jost
  • 00:09:29
    And then my second question, I know we're going to hear from all the other departments after this, but when it says other department budget solutions basically cutting 5.4 million dollars from departments, can you talk a little bit about how it was decided, how you decided like how much each department's going to cut?
  • 00:09:45
    Was each department given a target number?
  • 00:09:48
    How did that process work?
• • SPEAKER_01
  • 00:09:50
    Chair Kim, council member, earlier in the budget process we identified the total budget gap.
  • 00:09:54
    From there we calculated
  • 00:09:56
    for each department based on the department's share of the overall general fund budget.
  • 00:10:02
    And then departments made submissions for how they would meet those targets.
  • 00:10:06
    Not all of those targets were taken.
  • 00:10:08
    Not all of those reductions were taken.
  • 00:10:09
    That was part of the decision-making process that the mayor went through with his team and his leadership.
  • 00:10:14
    So some departments met their full target, others didn't, just depending on the impacts to operations and city services.
• • Saura Jost
  • 00:10:23
    So when you say it's proportional to the department's proportion of the budget, is that proportional to the general fund portion of the budget or to their total budget?
• • SPEAKER_01
  • 00:10:34
    Chair Kim, Councilmember, to the general fund.
  • 00:10:37
    Okay, so zooming back out to the full picture, the 2026 city and library general fund budget is $414 million.
  • 00:10:50
    This is an increase of about 17.4 or 4.4 percent over 2025.
  • 00:10:56
    Special funds account for about $418 million, a decrease of 7.1 percent over 2025.
  • 00:11:02
    This decrease is largely due to the planned spend down of American Rescue Plan dollars and the correction of a scrivener's error in solid waste and recycling fund.
  • 00:11:13
    The debt budget is $54.3 million, an increase of $4.3 million or 8.6 percent from 2025.
  • 00:11:20
    As a reminder, special funds are for situations where revenue has to be directly tied to the expense.
  • 00:11:25
    For example, our sewer utility is funded with sewer fees, and grant dollars are typically required to be spent on very specific things stipulated in the grant agreements.
  • 00:11:35
    Separating these things into special funds allow us to track them and make sure we're staying in compliance.
  • 00:11:41
    The general fund is essentially everything else, and it's funded primarily through property taxes and local government aid, as we'll discuss in a few slides.
  • 00:11:53
    If we break down our spending into broad categories, we can see that the vast majority, around 83% of our general fund expenses, are salaries and benefits for our employees.
  • 00:12:05
    If we include special funds in the same graph, that number drops to 51%.
  • 00:12:09
    And part of that drop is due to factoring in the city's debt service.
  • 00:12:15
    And then the other segment here in yellow includes things like payments to sub-recipients in our STAR programs.
  • 00:12:21
    and because operations like the sewer utility are housed in special funds, the services and materials segment is larger in the all-fund side of the pie chart than in the general fund.
  • 00:12:37
    In the general fund, our two largest departments are police and fire, accounting for nearly half of our general fund expenses.
  • 00:12:43
    Other large general fund departments include parks at 12.3% and public works at 10.5%.
  • 00:12:50
    Smaller departments, primarily internal services like finance technology, the City Attorney's Office, make up that 18% you see in the yellow segment on the right side of the pie chart.
  • 00:13:03
    If we consider all funds, we see a pretty significant shift.
  • 00:13:07
    Public Works is now the largest individual department with 26.7% of spending.
  • 00:13:12
    Police and Fire now make up just a quarter of all spending.
  • 00:13:16
    General Government accounts is 5.3%, which is slightly higher than you'd see in an average year due to the inclusion of remaining American Rescue Plan and Public Safety $8.00.
  • 00:13:28
    Internal Service Departments still make up a very small portion of the overall spending, as you can see again on the right side.
  • 00:13:40
    The 2026 proposed budget funds 3,181.7 FTEs,
  • 00:13:46
    This is a decrease of about 36.4 or 1.1% from 2025.
  • 00:13:52
    As I mentioned earlier, a significant number of those positions, 42.73, were removed to help balance the general fund budget.
  • 00:14:00
    Other changes to FTE totals include two new positions for the data practices team, a new revenue-supported position to manage cannabis administration, and a change to the way we reflect safety specialists at the library.
  • 00:14:12
    The costs for these safety specialists had been budgeted but are now reflected as FTEs
  • 00:14:16
    We've got a question from Council President Naker.
• • Rebecca Noecker
  • 00:14:23
    Thanks, Chair Kim.
  • 00:14:23
    So just can you say that one more time?
  • 00:14:25
    How many total new FTEs are being added?
• • SPEAKER_01
  • 00:14:29
    Chair Kim, Council President Naker, I believe I have to follow up with you on all funds.
  • 00:14:36
    In the general fund there are two new FTEs for the data practices team and a new position that is revenue supported for cannabis administration.
  • 00:14:45
    So I believe it's three.
  • 00:14:46
    New FTEs and the General Fund.
• • Rebecca Noecker
  • 00:14:48
    And the 5.5 from the Chair for Library is reallocating to the General Fund.
  • 00:14:55
    Those aren't new positions.
• • SPEAKER_01
  • 00:14:56
    They're not new positions.
  • 00:14:57
    They were just budgeted as dollars and not as people, and now they are reflected as people.
  • 00:15:04
    So it's just a change in the way that they are reflected in the budget.
• • Rebecca Noecker
  • 00:15:08
    So you'll follow up on the total new FTEs citywide.
  • 00:15:11
    Yes.
  • 00:15:11
    Thanks.
  • 00:15:11
    Thank you.
• • SPEAKER_01
  • 00:15:14
    Here is a list of the FTE reductions by department and as a percentage of 2025 FTE totals.
  • 00:15:21
    All of these positions are either currently vacant or expected to become vacant following natural turnover.
  • 00:15:27
    Where necessary, employees and work will be reassigned to ensure no one loses a job and services are maintained as much as possible.
  • 00:15:36
    Individual departments will provide more detail on specific impacts when they present in the coming weeks.
• • SPEAKER_04
  • 00:15:42
    Yeah, we've got a question, Council President.
• • Rebecca Noecker
  • 00:15:44
    Thank you, Chair Kim.
  • 00:15:46
    Ms. Mitchell, can you just say a little bit more about what it means to say that something will be left vacant following natural turnover?
  • 00:15:52
    Does that mean that we have received notice from someone?
  • 00:15:57
    Is this just an estimate based on attrition and it's not specific to the position?
  • 00:16:02
    I mean, how do we know that?
• • SPEAKER_01
  • 00:16:03
    Chair Kim, Council President Maker, there are titles in the city where we see more turnover than others.
  • 00:16:09
    It's usually when we have a lot of a single title and we know that there will be some turnover.
  • 00:16:14
    So as those positions, as somebody leaves those positions, they won't be backfilled.
  • 00:16:20
    But nobody will be, nobody will be fired or laid off.
  • 00:16:25
    It's just that those will occur naturally and then not be backfilled.
• • Rebecca Noecker
  • 00:16:29
    Can you, as a follow-up,
  • 00:16:31
    give us more detail as to which positions won't be back filled.
• • SPEAKER_01
  • 00:16:45
    Taking a look at revenues, we can see that the city's general fund is primarily supported by property taxes.
• • SPEAKER_04
  • 00:16:51
    I'm so sorry, you were right on your roll.
  • 00:16:53
    Chair Johnson.
• • Cheniqua Johnson
  • 00:16:54
    Thank you, Council Vice President.
  • 00:16:56
    I was just going to say, as also as a follow up for the previous slide, I know that we'll be able to hear per department which vacancy reductions that they have.
  • 00:17:05
    But just for a note and a nod, I think it would be really important for us to also see then the classification of those staff and who they are.
  • 00:17:13
    Chair Kim, Council Member Johnson, I believe that has been sent over to the Council already but we will re-up that in the Council inboxes.
  • 00:17:43
    And when you say the council, do you mean our council offices or do you mean to our central staff?
• • SPEAKER_04
  • 00:17:48
    We did council offices, it was shared.
  • 00:17:51
    So it was, we can re-up it.
  • 00:17:54
    But just to compound your point, I think it's an important context as we think about impacts to services.
  • 00:18:00
    And then when we see the staffing changes by department, it's always really good to know which staff are being left vacant, which ones are not being back filled, and what any potential new hires there would be, recognizing the slim budget we have this next year.
  • 00:18:14
    Any other questions regarding that comment?
  • 00:18:17
    Great.
• • SPEAKER_01
  • 00:18:19
    Okay, thank you.
  • 00:18:21
    Taking a look at revenue, we can see that the city's general fund is primarily supported by property taxes and local government aid.
  • 00:18:28
    Other taxes include things like Excel franchise fees and hotel tax.
  • 00:18:33
    Non-LGA intergovernmental revenue on the general fund side is primarily police and fire aids from the state.
  • 00:18:42
    And charges for services include things like paramedic fees.
  • 00:18:45
    If we include all funds, property taxes and LGA support
  • 00:18:49
    about 32% of operations.
  • 00:18:51
    Other taxes on this side include sales tax, and then non-LGA intergovernmental revenue includes state and federal grants.
  • 00:19:04
    Here's a closer look at our property tax revenue.
  • 00:19:06
    The 2026 proposed budget includes a property tax levy of $232.5 million.
  • 00:19:11
    $180 million of that supports the city's general fund.
  • 00:19:15
    $26 million is levied to pay debt service.
  • 00:19:18
    23 million supports the Public Library Agency and 2.9 million is levied on behalf of the Port Authority.
  • 00:19:25
    The total levy growth is 5.3% over 2025.
  • 00:19:29
    For reference, total market value growth for properties in the City of St. Paul is estimated to be a pretty modest 1.5% for taxes payable in 2026.
  • 00:19:39
    There are a lot of shifts happening, property values this year.
  • 00:19:43
    Ramsey County typically comes to present information on these shifts and how they impact property owners
  • 00:19:48
    I'm not sure if and when that presentation will happen this year, but the county is always a really great resource if you'd like to learn more about property values.
• • SPEAKER_04
  • 00:19:57
    Yeah, we certainly had intended it was on the potential schedule, but given just making sure that we're hitting the top five and working really closely with you and all the department directors to achieve the top five before we set the max levy, we pushed, we tentatively scrapped the Ramsey County property tax assessor's report.
  • 00:20:15
    But I do think given your urging and your guidance, it'd be nice to get back on the schedule.
• • 00:20:23
    Thank you.
• • SPEAKER_01
  • 00:20:24
    Next up is a really critical revenue for the city, local government aid.
  • 00:20:29
    LGA was originally created by the state to stabilize local property taxes and ensure that basic services are available in all Minnesota cities and can be maintained regardless of population size or property tax base.
  • 00:20:41
    Unlike grants or other restricted state and federal aids, LGA is a flexible funding source, making it a really important resource for our budget.
  • 00:20:50
    It's based on a formula that starts by determining a city's revenue need.
  • 00:20:54
    that's on the left side of that set of circles and then it which includes factors like jobs per capita and the age of our housing stock then the formula backs out what we can generate on our own that's the sort of right side of those red circles what we can generate on our own with our market values and property taxes and that leaves us with that blue circle that's our unmet need which is what the state formula says should be funded through LGA
  • 00:21:24
    that LGA has not ever been fully funded or at least not in recent memory.
  • 00:21:31
    So St Paul has the highest unmet need and the largest gap between our unmet need and our actual allocation of LGA.
  • 00:21:40
    Thanks to an $80 million increase to the statewide allocation, we received an additional $8.8 million in 2024.
  • 00:21:47
    This was a huge win at the Capitol, but we'd really love to see this program fully funded in the future.
  • 00:21:52
    eliminating that gap between our unmet need and the LGA we receive.
  • 00:21:55
    For 2026, the increase is $233,000 and this is driven just by the formula.
  • 00:22:05
    In addition to property taxes and LGA, we had about $4.1 million in other general fund revenue growth compared to 2025.
  • 00:22:13
    The biggest driver here is stronger investment earnings, about $1.25 million more than 2025.
  • 00:22:20
    and that is thanks to the higher interest rate environment.
  • 00:22:23
    We're also seeing an increase of about $900,000 in state pension aids for police and fire and about $880,000 more in franchise fee revenue now that we collect for an additional month.
  • 00:22:34
    There are also some smaller but still meaningful changes, about $740,000 more in excess TIP revenues, $71,000 more from hotel tax as lodging activity continues to rebound,
  • 00:22:46
    and a net of about $384,000 in other department adjustments across the city.
  • 00:22:51
    On the downside, paramedic fees are coming in lower than expected, so that offsets some of the gains, but overall these changes on the non-levy side help shrink the budget gap and take some of that pressure off the property tax levy.
• • Rebecca Noecker
  • 00:23:03
    Thank you, Chair Kim.
  • 00:23:06
    Ms. Mitchell, can you say a little bit more about that last point about the paramedics and other fire-related fees?
  • 00:23:10
    It looks like it's saying here higher paramedic fee revenue
  • 00:23:14
    being offset by reduction in expected reimbursement.
  • 00:23:18
    I'm just not sure what that means.
• • SPEAKER_01
  • 00:23:23
    Chair Kim, Council President Naker.
  • 00:23:27
    Yeah, I believe that I have that flipped.
  • 00:23:30
    So in our revenue reporting, we combine sort of all of the fire revenues into one.
  • 00:23:35
    So on the whole, it's down.
  • 00:23:38
    Paramedic fees are up.
  • 00:23:39
    And then governmental reimbursement is down.
  • 00:23:43
    So I had that flipped.
  • 00:23:44
    Thank you.
• • Rebecca Noecker
  • 00:23:44
    I think that's what it says here.
  • 00:23:47
    So we're making more from paramedic fees, but we're getting less reimbursement from government?
  • 00:23:53
    Yes.
  • 00:23:53
    And why are we getting less reimbursement?
  • 00:23:57
    What is that?
• • SPEAKER_01
  • 00:23:59
    Chair Kim, Council President Maker, I may have to follow up with you on that.
  • 00:24:02
    I don't have that detail right now.
• • Rebecca Noecker
  • 00:24:04
    Okay, thank you.
• • SPEAKER_04
  • 00:24:05
    Yeah, and in addition to that, it'd be interesting if that reflects the reimbursement that we would get, and maybe this is what it is, but the reimbursement that we would get from insurance companies.
  • 00:24:14
    So if not, I'd be interested to just also have that sort of tangential information.
  • 00:24:18
    So if that is or is not impacting it, and this is like a singular reimbursement that's not connected to those services, it'd be just good to know.
  • 00:24:26
    So I appreciate that.
• • SPEAKER_01
  • 00:24:27
    Thank you.
  • 00:24:28
    Chair Kim, thank you.
  • 00:24:29
    We will follow up with that.
  • 00:24:30
    Moving into highlights, one of the larger investments in the budget is housing and economic opportunity, more than $13 million altogether.
  • 00:24:41
    On the housing production side, that includes $5 million for office to housing conversion downtown, $1 million for smaller scale housing developments, and $600,000 to support accessory dwelling units.
  • 00:24:52
    These investments were made possible by using unspent dollars from the Housing Trust Fund and Local Affordable Housing Aid, or LAHA.
  • 00:25:00
    We began receiving LAHA in 2024, but only started budgeting for it in 2025.
  • 00:25:05
    And then in 2025, we ended up receiving more than expected.
  • 00:25:10
    So this allowed for a one-time surplus of around $2.8 million that has been used to advance that office to housing conversion work.
  • 00:25:18
    On the affordability side, we've budgeted $2 million for down payment assistance, which is an increase of $1 million from 2025.
  • 00:25:25
    We've maintained $1 million for emergency rental assistance, $1 million for the inheritance fund, and $880,000 for a supportive housing contract.
  • 00:25:34
    All of these are funded on an ongoing basis with local affordable housing aid.
  • 00:25:39
    And then for economic opportunity, the Commercial Corridors Program had been funded on a one-time basis in 2025.
  • 00:25:45
    An additional $1 million of funding has been allocated to extend that program into 2026.
  • 00:25:51
    There's also $500,000 in the HRA budget to support business retention and expansion, and $150,000 for implementing the downtown development strategy.
  • 00:25:59
    All of these investments are about making sure St Paul residents have access to stable housing and strong neighborhood economies.
  • 00:26:10
    The second theme is modernizing city services, which I've broken down into two broad categories here, technology and innovation.
  • 00:26:17
    Residents expect us to deliver high quality services even as those costs rise, meaning we need to work smarter and invest in the right tools.
  • 00:26:27
    The budget includes 626 for continued implementation of Poly, our new permitting and licensing system that will replace outdated technology.
  • 00:26:37
    It also invests one million in cyber security,
  • 00:26:39
    including $700,000 in one-time funding and $381,000 in ongoing general fund support.
  • 00:26:46
    We've also set aside $115,000 for a new grants management software and $450,000 for a robotic street marking vehicle that will make our public works crews safer and more efficient.
  • 00:26:59
    On the innovation side, we've included $100,000 for a facilities management study to help us maintain our buildings more efficiently.
  • 00:27:06
    and $60,000 for a mobile device audit that will result in ongoing cost savings, process efficiencies and improved device security and compliance.
  • 00:27:15
    The budget also includes $100,000 for consulting to move us towards priority-based budgeting.
  • 00:27:21
    This is really exciting for us because it will allow us to better connect the dollars that we spend to the outcomes that we want to achieve.
  • 00:27:28
    And finally, as mentioned earlier, the budget adds a new data practices team, a $166,000 net increase, a revenue-supported staff position for cannabis administration, and $200,000 for council office security upgrades.
• • Cheniqua Johnson
  • 00:27:46
    I wanted to follow up on this slide, and I know we'll get into it for the next couple slides, I think.
  • 00:27:53
    But can you also go through and verify, just anytime there's a special fund one time, whether they are new one-time allocations, meaning, for example, for poly, depending on if that special fund that you're using, I'm assuming we're referring to
  • 00:28:10
    I'm assuming that we're referring to specific special funds so can you just kind of clarify as we go into the next couple slides the special funds that they're coming from and then also if there are new special fund allocations or extended warrant plan for you know additions?
  • 00:28:28
    Sure.
• • SPEAKER_01
  • 00:28:29
    Chair Kim, Council Member Johnson.
  • 00:28:32
    Yes, in two slides here I have a list of where all of those are coming from so
  • 00:28:40
    there's a chunk of them that are coming from 211 which is general government special projects that's where projects that had formerly been funded with American Rescue Plan dollars are budgeted and then we have fund 710 which includes our innovation and technology account and our ERP maintenance account so those those are the primary places that these are coming from I believe most of these are new
  • 00:29:07
    New investments, Poly obviously has existing, has had existing budget so this is supplementing the existing work for Poly but I think the majority of the others are new investments in those special funds.
• • Rebecca Noecker
  • 00:29:30
    The third theme is community well-being.
• • SPEAKER_01
  • 00:29:48
    These are targeted investments that respond to needs in our community funded primarily through special fund sources rather than the general fund.
  • 00:29:56
    This includes $1 million from opioid settlement funds
  • 00:29:59
    to support treatment response and prevention related to opioids and fentanyl.
  • 00:30:03
    We've also budgeted $100,000 for a temporary library lease at Hallie Q.
  • 00:30:07
    Brown, which will allow services to continue while the Rondo Branch is under renovation.
  • 00:30:12
    There's also $90,000 for contracted security to help ensure the safety of Rondo Library while it's under renovation.
  • 00:30:20
    The budget includes $200,000 in ongoing support for district councils, recognizing the role they play
  • 00:30:25
    On this slide, you can see the detailed list of the one-time funding sources we're using in the 2026 budget.
  • 00:30:51
    I won't go through each of these lines
  • 00:30:54
    but I want to note that we've been intentional about matching one-time dollars to one-time investments.
  • 00:30:58
    The sources here that are shown as negative numbers are either projects with unspent funds like the DSISAC financial assistance project or unallocated fund balances.
  • 00:31:08
    These sources allow us to fund strategic investments without adding ongoing costs to the general fund.
• • Cheniqua Johnson
  • 00:31:14
    Chair Johnson.
  • 00:31:16
    Would we be able to get the actual Fund 211 spending from the fund balance pieces all for 2025 as well since we didn't get reports quarterly as we had requested?
• • SPEAKER_01
  • 00:31:29
    Chair Kim, Council Member Johnson, we can follow up on that.
• • Cheniqua Johnson
  • 00:31:33
    yeah I would like to see all the transactions in and out of the special fund like so plus the negatives of the special fund 211 in part to trace the the fund balances and how they've changed and which which has rolled over and I think that would be really helpful since we didn't get a chance to review them quarterly as we had originally requested
  • 00:31:52
    and then as a follow-up and kind of continuing to these could for the special fund the government special projects could you specify again so looking at the different types of investments which ones were new not originally planned to come out of ARPA with the council mayoral agreement in 2024?
• • SPEAKER_01
  • 00:32:15
    Chair Kim, Council Member
  • 00:32:19
    I believe the cyber security investments, the library contracting security, the library lease, and the robotics striping machine were not specifically ARP projects.
• • Cheniqua Johnson
  • 00:32:34
    Okay, thank you.
  • 00:32:34
    And Madeline, so that would mean that at this particular juncture this would be proposed this year as new coming from the special fund and not previously discussed as a part of the council mayoral conversations of ARPA.
• • SPEAKER_01
  • 00:32:46
    Chair Kim, Council Member, I can't speak to what was discussed in those conversations, but these are new investments.
• • SPEAKER_04
  • 00:32:54
    Okay.
  • 00:32:54
    Okay, thank you.
  • 00:32:56
    Council President.
• • Rebecca Noecker
  • 00:32:58
    Thanks, Chair.
  • 00:32:59
    I think my follow-up was pretty much Council Member Johnson's follow-up, but maybe just to say it again, I think we need the quarterly ARPA update that we requested
  • 00:33:12
    I can speak to what we agreed to and I know we all can because we have it written down in the global agreement about how ARPA funds would be spent.
  • 00:33:19
    and I think we need to see how they have been spent, whether or not they're in 211 or wherever they are and to Council Member Johnson's point, what is now being proposed that might be different from that original agreement.
  • 00:33:30
    So I'm not sure, Chair, when we're planning to have that ARPA quarterly report as part of the budget process, but that seems like important information.
• • SPEAKER_04
  • 00:33:38
    Yeah, we're definitely going to be working on that and I know there have been questions around, what is it, like ERA 2 as well, which we believe falls under the umbrella of ARPA and we see Interim Director Watson, hi.
• • SPEAKER_00
  • 00:33:49
    Hello, I'm Council Vice President.
  • 00:33:50
    I just wanted to share, we have shared the quarterly reports with the Council.
  • 00:33:55
    The Fund 211 quarterly reports have been shared.
  • 00:33:59
    We have that record.
  • 00:34:00
    We've shared that back with Director Wilms as well.
  • 00:34:03
    So those are available.
  • 00:34:04
    I just wanted to make sure that that was clear.
  • 00:34:07
    Thank you.
• • Rebecca Noecker
  • 00:34:08
    That's great.
  • 00:34:08
    Thank you.
• • SPEAKER_04
  • 00:34:09
    Yep.
  • 00:34:10
    Council President.
• • Rebecca Noecker
  • 00:34:10
    I'm so sorry Director Logsdon.
  • 00:34:12
    I don't know when that was last done.
  • 00:34:14
    Can you tell us when Mr. Wilms?
• • SPEAKER_00
  • 00:34:21
    Thank you, Council Vice President and Council President Aker.
  • 00:34:25
    We've shared each of those quarterly reports since it was included in the resolution last year.
  • 00:34:30
    The deadlines have been, I mean every quarter, so July, I think October, they've been provided regularly.
  • 00:34:38
    I know Director Wellams just asked us to resend all of them, and we resend all of them this week.
  • 00:34:45
    I appreciate the clarification and I look forward to maybe hearing from Mr. Wilmes about where those are.
• • SPEAKER_01
  • 00:35:16
    All right.
  • 00:35:17
    Moving on, the 2026 proposed capital budget is 151.7 million.
  • 00:35:24
    Michelle Botko-Woods on our team will be back in a few weeks to present the capital budget in much more detail.
  • 00:35:30
    But for now, on this slide, you can see some of the primary revenue sources.
  • 00:35:34
    You may notice that the amounts for the geo capital improvement bonds are relatively low.
  • 00:35:38
    Historically, these have been around 11 million a year, as you can see in 2027.
  • 00:35:44
    This is because of the accelerated five-year plan we implemented a few years ago to take advantage of low interest rates and front-load our projects, making the out-years much smaller, funding mainly annual programs.
  • 00:35:55
    This table also shows a decrease to our GO street reconstruction bond totals from 2025.
  • 00:36:00
    This is not a contraction of the program, rather the 2025 budget reflected the carrying forward of unspent bond funds of around $7 million from 2024
  • 00:36:12
    So 2026 just reflects a return to normal funding levels.
  • 00:36:16
    I'll also note that CDBG and CIB department processes occurred this year and that the CIB process reflected a commitment to completing existing projects and improving existing facilities.
  • 00:36:27
    In addition to funding the remaining need for the Randolph Bridge project, the proposed budget funds two transforming libraries projects at Hayden Heights and Riverview libraries.
  • 00:36:37
    And again, Michelle will be back in a few weeks to provide much more detail.
  • 00:36:45
    This is what we expect the impact of all of these changes to be on a typical home.
  • 00:36:49
    The median home value for 2026 is 289,000.
  • 00:36:52
    This home would see an increase of $107 in city property taxes, $45 increase in sanitary sewer charges, an $18 increase in storm sewer charges, a $5 increase in the recycling fee, no increase to the trash fee, and a $57 increase to the water bill.
  • 00:37:11
    Public Works will be back in a few weeks to discuss the trash, sewer, and recycling fees in more detail, but the total estimated impact of all of these charges is a net increase of $232.
  • 00:37:27
    Finally, I just wanted to take a moment to thank the Council for your letter earlier this year outlining your priorities.
  • 00:37:33
    It was very helpful to have that in advance of budget decisions.
  • 00:37:36
    As you can see on this slide,
  • 00:37:38
    I believe there's a great deal of alignment between the Council's stated priorities and the investments and the trade-offs that are proposed in this budget.
  • 00:37:46
    While the budget may not include all of the priorities that were outlined in the memo, we worked really hard to ensure that it reflects a shared vision for St Paul.
  • 00:37:54
    So thank you again for sharing those priorities.
  • 00:37:57
    I look forward to continuing to partner with you all to deliver a budget that is responsible, reflective of our community's current needs, and forward-looking.
  • 00:38:06
    With that, I'll thank you for your time today and stand for any additional questions.
• • SPEAKER_04
  • 00:38:11
    Great, thank you so much.
  • 00:38:13
    Any additional questions, Council?
  • 00:38:18
    We'll go to Chair Yang and Council President.
  • 00:38:24
    Thank you.
• • Nelsie Yang
  • 00:38:27
    You have a few slides with proposed revenue for 2026.
  • 00:38:32
    I'm wondering, does that include the revenue from the 1% sales tax too?
• • SPEAKER_01
  • 00:38:37
    Chair Kim, Council Member Yang, no, that is just the general fund revenues.
• • Nelsie Yang
  • 00:38:43
    Okay.
  • 00:38:45
    Yeah, there were, there's a few illustrations where it says general fund and then all funds.
  • 00:38:49
    So where it says all funds, how about that one?
• • SPEAKER_01
  • 00:38:53
    Yes.
  • 00:38:54
    Chair Kim, Council Member Yang, yes.
  • 00:38:56
    So on this slide here, that does include the 1% sales tax revenue.
  • 00:39:03
    Okay, great.
  • 00:39:04
    I'm sorry.
  • 00:39:06
    It does not include the 1%, it includes the half cent sales tax.
  • 00:39:10
    The 1% is only in our capital budget.
• • Nelsie Yang
  • 00:39:15
    Can you explain a bit about, I know this is just a tentative number that y'all are projecting for 2027 for the city 1% sales tax projects.
  • 00:39:27
    Can you explain a bit about going from the 55 million to 51 and then 28 million in 2027?
• • SPEAKER_01
  • 00:39:36
    Chair Kim, Council Member Yang, I don't have details on that right now, but we can certainly follow up.
• • Nelsie Yang
  • 00:39:47
    And I'm just curious, has OFS sent us information about how much we have received in the 1% sales tax so far for 2025?
  • 00:39:55
    If not, having that data would be helpful.
• • SPEAKER_01
  • 00:40:01
    Chair Kim, Council Member Yang, I am not sure what has been shared yet, but I will follow up on that as well.
• • Nelsie Yang
  • 00:40:06
    Okay, great.
  • 00:40:07
    And then I'm also wondering for the City Council security upgrades here that you have at $200,000, which I just want to share right off the bat.
  • 00:40:22
    I'm very supportive of our City Council office renovation project.
  • 00:40:26
    It's very important.
  • 00:40:27
    and especially is important in making sure that our offices are accessible and safe, especially for our staff who are at the front desk.
  • 00:40:36
    I'm wondering if this hasn't been shared yet, can you share with us what are the details for what is inside this $200,000?
  • 00:40:48
    I can't speak to the specifics on what is in the 200,000
  • 00:41:05
    and the City Council.
  • 00:41:23
    and I am concerned that it wouldn't actually address the things that we want to have resolved for all of our staff to be safe and for there to be accessibility in our office.
  • 00:41:34
    So I would like that information and also information about
  • 00:41:40
    to come to this conclusion of the $200,000.
• • Rebecca Noecker
  • 00:41:59
    of the City Council.
  • 00:42:16
    in this budget to make sure that our priorities were reflected.
  • 00:42:20
    I want to particularly call out two funding priorities that we shared, the Commercial Corridors Assistance Program and the District Council funding.
  • 00:42:27
    And I know we're not exactly where we want to be with both of those, although we'll try to get there.
  • 00:42:31
    But I really appreciate seeing that there.
  • 00:42:34
    And then also the focus on unfilled vacancies, which is something that this council has been
  • 00:42:39
    Chair Kim, Council President Aker, thank you.
  • 00:42:49
    I really appreciate that.
• • Cheniqua Johnson
  • 00:43:01
    Yeah, it was once again I think an alignment with the Council President on this one.
  • 00:43:04
    I appreciated this slide because I think it just showed like direct a direct response just to some of them.
  • 00:43:11
    I would say that what would be really helpful this cycle in this budget cycle in particular is the continuous conversation between Council and OFS.
  • 00:43:19
    I felt as though last year as changes were made and recommended the partnership pieces weren't necessarily there or exactly where.
  • 00:43:28
    I'd love to see them as a colleague of City
  • 00:43:30
    and I think being able to have you know some ability to know that while these budget recommendations are that budget recommendations until adopted by the council I think it would be really important to know just you know as things are moving and especially the communication piece as we hear maybe suggestions from council members changes recommendations from council members or even just
  • 00:43:53
    as we get into conversations around, you know, let's say for example, right, the piece that was mentioned by Council Member Yang, right, originally the ARPA allocation, the special plan allocation for the council, the office pieces and the safety and accessibility investments was two million.
  • 00:44:10
    Clearly two hundred thousand is separate from that.
  • 00:44:12
    is different from that and a deterrent from that agreement.
  • 00:44:15
    And so just kind of going into pieces that there are movements to try and make sure that we're able to get back to what was originally requested from the Council's side and from what was requested in the memo that we are able to do that in partnership and where it doesn't feel like any suggestions being made may not be necessarily adequate or somehow send us in a catastrophe or chaotic situation as some of the things from last year I think
  • 00:44:40
    and the language used last year for me, I would love to avoid this year and would love to do that in partnership.
  • 00:44:45
    So I think that piece around just who is being communicated with and how we're communicating moving forward and throughout this process overall, I'd really love to see that partnership between OFS, between council.
  • 00:44:57
    We have a new chief budget officer in Camud and I think just overall the continued pieces of, I'd rather over communicate.
  • 00:45:06
    committee.
  • 00:45:12
    I want to say thank you for the
  • 00:45:25
    Chair Kim, Council Member, thank you.
• • Saura Jost
  • 00:45:54
    Council Member Jost.
  • 00:45:55
    Thank you, Chair Kim.
  • 00:45:57
    Ms. Mitchell and all your staff, I just want to echo what other folks have been saying.
  • 00:46:03
    I found this last slide extremely helpful.
  • 00:46:06
    Otherwise, I would be going back to our memo and reading through the budget and checking things off.
  • 00:46:10
    So I really appreciate that.
  • 00:46:12
    And I think that this budget really reflects a lot of the questions and suggestions that our council had in the budget cycle last year.
  • 00:46:23
    and also these particular priorities.
  • 00:46:27
    I just want to point to a couple.
  • 00:46:29
    These are all really great.
  • 00:46:31
    The district council funding I think is really important.
  • 00:46:34
    We work so closely with the district councils and they're just such an important investment for engaging with the community.
  • 00:46:40
    And I'll just share that last year a few of our council members asked for
  • 00:46:45
    asked for that funding and it didn't make it into the budget that year, but I'm happy to see it in the budget this year, especially with the work of our new district council coordinator.
  • 00:46:53
    I'm really excited to see the continued investment and the power of home and healthy homes.
  • 00:46:59
    I think another one that I really also cared about is the swimming pilot at Jimmy Lee.
  • 00:47:04
    I'm glad to see that that is being shifted to ongoing funding, hopefully for the long term.
  • 00:47:11
    And then I really appreciate the shift to the activity based budget reporting.
  • 00:47:15
    I think that's really going to help us as we think long term about how this process will go in the future and just being able to provide more transparency for the budget and for us it gives us a higher ability to be able to make budget decisions with the activity based budget reporting.
  • 00:47:33
    and so looking forward to that and just looking forward to the department presentations coming up.
  • 00:47:39
    So thanks so much to everyone for all the work.
• • Nelsie Yang
  • 00:47:43
    Thank you.
  • 00:47:45
    Chair Yang.
  • 00:47:46
    Thanks, Vice Chair Kim.
  • 00:47:47
    I just wanted to share my overall thoughts on the proposed levy amount right here, which is 5.3%.
  • 00:47:54
    I generally feel pleased that it's a much more modest proposal that we have this year compared to previous years, and I'll say that because
  • 00:48:03
    as a council member representing an area of our city that is very impoverished.
  • 00:48:09
    I'm already hearing from folks about the financial struggles that they're going through.
  • 00:48:13
    We've already been seeing news go out about the proposed increase here, and then also from the county, from the schools as well.
  • 00:48:23
    there's already lots of input that I'm sure all of you are receiving.
  • 00:48:28
    And I just want to name, there's a lot of things in the slides here that I'm very supportive of.
  • 00:48:33
    For example, I'm really pleased to see, like some of you mentioned already, the proposed increase for district councils also.
  • 00:48:41
    and the City Council.
  • 00:49:02
    and I just want to name that for me what is really important is making sure that we really think about the unique roles that we as a city provide and also services that we provide that the county doesn't do directly, that the schools don't do directly.
  • 00:49:17
    One of the things that
  • 00:49:17
    is really on top of mind for me are our rec centers, our libraries.
  • 00:49:22
    Are we making sure that we're fully funding them?
  • 00:49:24
    Because if we don't, then it's not like the county or the schools are going to be pitching in money to the city to make sure that our buildings are open.
  • 00:49:31
    So for me, looking at that and really focusing on it is really important because we really need to make sure that all those services are available for all our residents.
  • 00:49:41
    and that I think there's a lot of benefits to ensuring that our staff are able to have their jobs, to be able to work the hours that they need to in order to be able to sustain them and their families.
  • 00:49:58
    And so there's a lot of things that are in mind for me that I'm thinking about.
  • 00:50:04
    I just wanted to share that right off the bat so that my colleagues know where I am too.
  • 00:50:10
    and I don't have
  • 00:50:30
    the overall impact that taxes do have on our residents.
  • 00:50:35
    In Winder City right now we are really pushing on building more housing and our residents are really supportive of that too.
  • 00:50:40
    It's going to take quite some time for us to get to where we want to be and so we need to be really considerate of all those things.
• • SPEAKER_04
  • 00:50:49
    Great.
  • 00:50:50
    I just have a few comments myself, in agreement for lifting up the things that we agree on.
  • 00:50:56
    I think in connection to the vacancy reporting that we'd asked for last year, it's really great to see that being sort of applied universally as a way to find cost savings.
  • 00:51:04
    and sort of connected to that, it helps us better understand what's just like the cost of doing business here.
  • 00:51:08
    How do we keep the lights on, the rec center is staffed, the library is staffed and safe.
  • 00:51:13
    And I just do want to lift up our former budget officer and our chief operations.
  • 00:51:19
    Director Jay Wilms, who offered us this idea of moving to an activity-based budget reporting last year.
  • 00:51:25
    And so it's really great that we have a partnership in the mayor's office for that.
  • 00:51:29
    And supportive of the consulting, because as we looked at the budget, it's a pretty bare bones one.
  • 00:51:34
    And so when we're asking staff to do more, that means that we also kind of have to pony up and provide resources.
  • 00:51:38
    And especially for sort of this longer term investment in a different vision for our budgeting process for the city.
  • 00:51:46
    The only other thought, there was one other one.
  • 00:51:49
    I got a preview of the really great library.
  • 00:51:54
    Always competing for everyone's favorite department, the library presentation yesterday.
  • 00:52:00
    And one thing that I was noting, kind of to your point, Chair Yang, is that we are sort of supplementing some of our one-time dollars to support staff.
  • 00:52:09
    And so one thing that I'd be really interested as we continue this conversation on vacancies,
  • 00:52:14
    and thinking about activity based budgeting and reporting.
  • 00:52:18
    What does it look like if we were to take all of our special fund positions off and onto the general fund?
  • 00:52:24
    What impact would that have?
  • 00:52:25
    How many would it be?
  • 00:52:27
    right so if we're supplementing staffing we have a proposal coming to us the library board for I think safety specialists which I got a great update on and we should start asking how are they funded because if they're not in the general they're getting funded in other ways and I understand that that is sort of the cost of doing business and finding better hire you sources are ones that help alleviate the tax base but I think there's sort of not a reality check but
  • 00:52:49
    Thank you so much for the presentation today.
  • 00:53:11
    Always really lovely to work with you and the OFS staff.
  • 00:53:14
    We really appreciate all the time and attention and to
  • 00:53:17
    I think just a proactive thanks to all of the directors that nailed down their presentation times with us sort of in the slew and the aftermath of the cyber incident.
  • 00:53:26
    So we're just always grateful for the partnership.
  • 00:53:29
    Next week we're getting presentations from SPPD and Public Works and with that we are adjourned.