Budget Committee November 17, 2025   11/17/2025

Good afternoon.

My name is Aisha Chugtai and I'm the chair of the Budget Committee.

I'm going to call to order our meeting for Monday, November 17, 2025.

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.

These broadcasts include real-time captioning as a further method to increase the accessibility of our proceedings to the community.

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.

We ask all speakers to moderate the speed and clarity of their comments.

At this time, I'll ask the clerk to call the roll so we can verify the presence of a quorum.

Wonsley is absent.

Allison is absent.

is present

Let the record reflect that we have a quorum.

I'll also remind my colleagues that we will be using speaker management today, so please make sure to sign in.

We have one item on our agenda today, which is the 20-year neighborhood park plan guaranteed minimum annual amounts.

I'll invite the budget team to join us and begin their presentation.

Good afternoon, council members.

My name is Liam O'Brien.

I'm a senior budget analyst with the Finance and Property Services Department.

Today I will provide an overview of the proposed inflationary adjustment to the park's infrastructure component of the 20-year neighborhood park plan ordinance.

This will be a brief presentation where I will provide an overview of the ordinance, explain the key technical details of the resolution we are discussing today, describe the collaborative process between the city and the Minneapolis Park and Recreation Board, and outline the ordinance-driven timeline for this resolution.

In 2016, through Chapter 16, Article 14 of the Municipal Code, the City established guaranteed minimum annual funding allocations to address identified gaps in neighborhood parks and streets infrastructure over a 20-year period.

The ordinance requires the City of Minneapolis and Park Board to collaborate every five years to review and adjust these funding amounts using a mutually agreed upon objective measure of inflation.

The first such adjustment occurred on December 15, 2021, when the City and Park Board approved a 3% inflationary increase from 2022 to 2026.

For context, the ordinance originally required the City to contribute $10.5 million annually for park development and rehabilitation.

This was done from 2016 to 2020.

Due to the inflationary adjustment agreed to in 2021, the annual funding provided has risen to $13.1 million by 2026.

Looking ahead, within our resolution, the City and Park Board have agreed to a 4% annual compounded increase from 2027 to 2031.

Based on this rate, the 13.1 million budget for 2026 is projected to grow to approximately 15.9 million by 2031, which we are planning to cover through increased capital bonding.

I want to highlight that this inflation increase is not intended to increase the number of projects the Park Board will complete, but to account for construction inflation costs associated with planned projects,

and to ensure the effectiveness of the funding that we allocate.

To implement this adjustment, both the city and park board must adopt concurrent resolutions detailing the inflationary adjustment and the resulting funding increase.

It's important to note that this resolution does not program or appropriate funding at this time.

Once approved, city staff will coordinate with the park board to incorporate this inflationary increase into the park capital program beginning in 2027.

I'll take a moment to summarize the collaborative work completed so far between the city and park board.

In the spring, the park board submitted a letter from Rockwise Strategies, a consultant specializing in construction cost estimating.

The letter recommended a 4% annual cost escalator based on several quarterly published construction cost index reports.

After reviewing the letter, the budget office conducted its own analysis for comparison.

We examined a broad set of established construction cost indices focused on non-residential construction, capturing cost increases tied to final selling prices.

This gave us a clear view of both current and historical trends, and we calculated year-over-year increases from 2023 to 2025.

Our analysis showed that the national non-residential construction costs rose 3.8% over this period, while Twin Cities costs increased 3.4%.

We also considered input from other capital development departments.

and reviewed existing capital cost estimating strategies, which typically use a 3% annual inflation adjustment for capital development.

However, given current economic conditions such as tariffs for construction goods, our internal discussions concluded that a 4% annual increase is a reasonable and appropriate inflation escalator.

The City of Minneapolis Park and Recreation Board need to approve through concurrent resolutions the proposed inflation-adjusting guaranteed minimum annual allocations for 2027-2031 by December 15th of this year to align with the funding adjustment timeline outlined in the ordinance.

The Park Board approved the resolution on November 5th, 2025.

If the City's resolution is approved by the Budget Committee today, the full Council will review and vote on the adoption of the proposed inflationary adjustment on November 20th, 2025, well ahead of the ordinance-driven timeline.

That concludes our presentation.

Thank you for that presentation Mr. O'Brien.

Council Member Vitale.

Thank you, Chair.

I just wanted to quickly say thanks to everyone for this.

I know the Park Board is looking forward to us passing this.

This is a routine thing and it's really about inflation and how we move forward in our relationship with parks and I've always been grateful for the Neighborhood Parks Plan so looking forward to us all voting on this.

Wonderful, thank you council member.

I am not seeing any further discussion, so I'll move approval of this item.

Do I have a second?

All those in favor please signify by saying aye.

Aye.

Those opposed say nay.

Any abstentions?

The ayes have it and that motion carries.

With that we've concluded all business to come before the committee today and without objection we stand adjourned until our next meeting which is this Wednesday November 19th at 605 p.m. when we will hold our third public hearing on the 2026 budget.