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HomeMy WebLinkAbout2025.12.01 CCM SPECIAL12/01/25 -1- MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL SESSION DECEMBER 1, 2025 CITY HALL – COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in a Special Session, called to order by Mayor April Graves at 6:33 p.m. ROLL CALL Mayor April Graves and Councilmembers Dan Jerzak, Teneshia Kragness, and Laurie Ann Moore. Also present were City Manager Reggie Edwards, Finance Director Angela Holm, and City Clerk Shannon Pettit. Councilmember Kris Lawrence-Anderson was absent. 2026 BUDGET CITY MANAGER’S BUDGET TRANSMITTAL LETTER FOR FISCAL YEAR 2026 Dr. Edwards explained that this meeting is for Truth and Taxation to present the budget to the public and finalize the budget. He said he and Finance Director Angela Holm would be presenting the budget tonight. Dr. Edwards asked if the Council wanted to make a motion to accept the transmittal letter before the presentation or after. Councilmember Moore asked if that motion was in the packet or if it was just to start the process of discussing the budget. Dr. Edwards said the motion was in the packet, on page three of 206. Councilmember Moore asked if accepting the transmittal letter meant the Council was voting to accept the proposed budget as well. Dr. Edwards confirmed the motion was just to accept the transmittal letter. Councilmember Moore moved, and Mayor Graves seconded to accept the City Manager's Budget Transmittal Letter for the City of Brooklyn Center's 2026 Budget. Motion passed unanimously. Dr. Edwards explained that the presentation was primarily what the Council heard during the preliminary levy budget meeting. He said there would be some minor modifications, and the 12/01/25 -2- purpose of the presentation is to provide an overview of the budget process, the factors for the 2026 annual levy budget, fiscal analysis, and impacts. Dr. Edwards explained the extensive budget process, which began in June and July, where the City Council and the Finance Commission held joint Work Sessions about the audit, the budget overview, and the levy. Several meetings took place in August, where the joint Work Sessions also heard budget presentations from Department heads, debt service funds, and the Central Garage. He noted that in September, the City Council heard a preliminary levy and budget recommendation at their meeting. In October and November, the City Council held additional joint Work Sessions with the Finance Commission, where they heard budget presentations on Utilities, Grant funds, and the Enterprise fund. The Council also heard a presentation on Utility rates at their regular Council meeting last month. He noted that the budget process starts with the City's mission statement to provide safe, high-quality services and an inclusive community. He said that the budget has a focus on four strategic priorities, which include maintaining a strong financial position, improving community and employee safety, strengthening diversity and business development and housing, and improving the employees' experience. Dr. Edwards continued to explain the budget guiding factors. He said those factors include meeting challenges of systemic societal wealth and cost, such as the increase in the cost of living, which was outpacing income, other jurisdictions' tax increases, such as school districts, immediate tax burden versus long-term financial sustainability, and past reductions, including reducing City Staff. He explained that the path forward cannot include a reduction of operational costs after three years of reductions, but will focus on economic growth, investment, program innovation, and long-term funding stability. Dr. Edwards reminded the Council that Brooklyn Center's preliminary levy was set at 4.98 percent, and compared it to other surrounding cities that set their levies as high as 15.87 percent. He explained that the 2026 budget investments include a three percent wage increase for cost of living, benefits for City Staff, FMLA per Minnesota state law, Central Garage, Reserve fund restoration, and bonding costs. He noted that reductions included part-time employees not receiving the cost of the living raise, the elimination of one full-time firefighter position, two part-time Community Service Officers, reduction in hours for the Artist-in-Residence, one full time position in the office of Community Prevention, Health, and Safety, one full-time position in Administration Communication, and the elimination of a City Council consulting contract. He explained that while the reductions were not easy to make, City Staff chose to focus on the guiding principles of maintaining employee morale while maintaining service integrity, leveraging opportunities by potentially combining positions, addressing systemic challenges, addressing immediate pain, and keeping things fair and equitable across the City’s organization. Dr. Edwards explained that budget adjustments between the proposed budget and the annual budget include worker’s comp insurance rates have decreased, resulting in a reduced cost, modest expense reductions, and modest wage adjustments, resulting in reduced cost. These adjustments have a budget impact that includes restoring Sunday hours at the Community Center for room rental, if available. He said the Community Center has already adjusted its Staffing, so for right 12/01/25 -3- now, the Community Center will not fully reopen on Sundays. Restoring funding for one Fire Duty Crew position, which is part of a larger plan to adequately staff the Department, mitigate the impact of salary adjustments implemented after September 22, 2025, when the preliminary levy was set, and reducing the preliminary levy from 4.98 percent to 4.78 percent. Dr. Edwards said some of the adjustment impacts obviously include Staff reduction, which affects productivity, service quality, and morale. He explained that after analyzing the foot traffic that came through the Community Center on Sundays, it was determined that it was the only day that would have the least impact on residents, but he acknowledged that it still hurts. He noted that other adjustments were made, such as delaying cell phone purchases for Staff and future firefighter positions, which will have to be addressed later on. He noted that the final proposed levy increase for 2026 is 4.78 percent, which is a total $1,261,631 increase that includes the general levy and bonding. Ms. Holm explained that the budget policies provide a basic framework and assist in the decision- making process. Those policies include a balanced budget, which means current revenue should pay for current expenses, which is more complex than it sounds. She said she would provide a more detailed document to the Council that explains the concept of a structurally balanced budget. She noted that the budget would include a contingency of up to five percent, provide adequate funding for capital replacement and maintenance, and that the budget should describe goals, services, and programs. Ms. Holm said revenue policies direct how the City maintains the ability to pay for services it provides its customers. She explained that revenue should maintain a diversified and stable revenue system. She noted that annual revenue estimates are completed through an objective, conservative, analytical process, and user fees should be reviewed and revised on an annual basis. She said that fees and user charges for Enterprise funds should fully support total direct and indirect costs, and user fees for City services will generally be established at a level that will recover the full cost of providing the service. Ms. Holm explained that one of the big topics of recent years is the median home value, and the value of someone's home based on what their property tax levy from the City is calculated from. She noted that from 2022 to 2023, there was a fairly significant increase that the residents definitely felt, but since that time, the increases have been much lower. She compared the median home value in Brooklyn Center to several surrounding cities, with Golden Valley's median home value coming in at $447,200 versus Brooklyn Center’s $281,000. She continued to explain the taxable market value estimates and noted that this number is assigned by the county, which is the consolidation of all the properties and businesses within the City. She said that Brooklyn Center's taxable market value went up less than half a percent for all properties for 2026, but as the City considers more economic development, this would impact the taxable market value and increase the value of commercial, industrial, and apartment properties. She noted that residential homes were the only properties that increased by three percent for 2026. She explained that the property tax levy was lowered to 4.78 percent, and said it was worth noting that an increase or decrease of one percent is approximately $250,000 in revenue. 12/01/25 -4- Ms. Holm explained the cost of government for the 2026 median value residential property. She displayed a chart that clearly states how the cost is allocated by City Department, with the three highest being the Police taking the majority at $656, Public Works taking $328, and general government taking $209. She explained the projected property tax impacts and that City Staff looks at how a percentage would impact the levy. She said that it is important to remember that the calculation is complex and is based on the taxable market value of the home, along with applying a homestead tax credit, and the calculation is based on that amount. She noted that for the median home value, the tax rate is 64.097, which equates to a $134 increase. She said that if the levy went up or down by one percent, that amount would adjust by $15. Ms. Holm detailed the budget process next steps, which include the special meeting held tonight for adoption of the 2026 budget and levy, and submitting the final levy amount to Hennepin County by December 30. Once that is completed, work will begin on the 2027 budget. She noted that tonight’s actions include a Public Hearing to take public comments and approval of the three resolutions. She asked the Council if there were any questions. Dr. Edwards said he wanted to clarify for the record that communications had gone out to residents that the Community Center would be closed on Sundays, prior to the determination that room rentals would still be available on Sunday. He said if the Council gets questions regarding the Community Center not being open on Sundays, there is an option for room rentals. Councilmember Kragness asked if the fitness center is not open on Sundays. Dr. Edwards confirmed that it is not open on Sundays, room rentals only. Councilmember Kragness requested that she get the projected property tax impact detailed sheet from Ms. Holm. She asked about the positions that were eliminated, since those positions were budgeted for 2025, and if the effective date begins in 2026. Dr. Edwards confirmed that those employees would be employed through the holidays. Councilmember Moore asked if Mayor Graves wanted comments after or before the Public Hearing. Mayor Graves responded that the Council can make comments now and after the Public Hearing. Councilmember Moore asked Ms. Holm about the Artist-in-Resident position on page 136 of 206, where it states that there has been a reduction of 0.125 hours, but in the budget, it shows that the City is fully funding that position at $38,000. She said she knows part of that position is grant- funded, and the other is part of the tax levy. Ms. Holm said the Artist-in-Residence was a 0.625- funded position, and a portion of that position was grant-funded; however, the movement to fully fund that position at the 0.625 would require an increase in the budget, so it was reduced and is fully funded now by the General fund. Councilmember Moore asked if this budget reflects a part-time Artist-in-Residence that is taxpayer-funded through the levy. Ms. Holm confirmed that it is correct. Councilmember Moore 12/01/25 -5- asked about another allocation of $50,000 towards arts and sculptures in the CIP. Ms. Holm said that it is funded every other year with an allocation of $50,000 towards public art. Councilmember Moore said she was opposed to taxpayers' funding an Artist-in-Residence program when the City is not giving part-time City employees cost-of-living increases. She said the budget is supposed to describe goals, services, and programs, and she does not think that is fully communicated as she looks through the budget. Mayor Graves moved, and Councilmember Moore seconded to open the Public Hearing. Motion passed unanimously. Lori B. said she wanted to comment regarding the layoffs and the cutbacks at the Community Center. She said providing opportunities for youth to keep them out of trouble should be the focus, since there is not a lot to do in Brooklyn Center, and closing the Community Center does not help. She said she is very opposed to seeing the money that is continually spent without question, while taking away firefighter positions. Julie B. said she is a 16-year resident and is disabled. She thanked City Staff for the time they took to prepare the budget, and understands there were difficult constraints this year. She said she is disappointed that there were lay-offs and that there was no capacity given to avoid that. She said even as a low-income resident, she would have happily paid an extra $30 a year to have those services and avoid people losing their jobs. She said she is disappointed with the messaging that the community received early on in the budget process, which set up the community to be upset no matter what. She said the idea that there would ever be a zero percent budget increase was unrealistic at best and set up the community to be upset, no matter what happens during this time. Mayor Graves informed Julie B. that she was out of time and thanked her for addressing the Council. Mayor Graves moved, and Councilmember Moore seconded to close the Public Hearing. Motion passed unanimously. RESOLUTION ADOPTING THE 2026 ANNUAL CITY BUDGET Councilmember Moore thanked the residents for addressing the Public Hearing. She said she agreed regarding the Community Center, but Sunday was the lowest traffic date and was an administrative decision. She said she was elected to represent 33,782 residents, and she looked at everything during budget meetings and went line by line through the budget. She said she still has concerns about the 4.78 percent levy, especially for people who are on individual or fixed incomes. She said that the City is already past 25 percent water utility rates, which is astounding even for someone who is single or a single parent, but for a family of four, it will be a significant increase. She noted that there is a water meter fiasco in the City, which Staff have a plan in place to remediate, and she hopes that a contract is finalized to get that underway by the end of the year. 12/01/25 -6- She said the Council was told that the City is losing upwards of $200,000 annually on faulty water meters. She noted that she still thinks there is a Department that has duplication, but this Department did receive a reduction in Staff. She said she believes strongly in expanded response and reaching out to community members who are having mental health crises, but currently, there is an embedded Social Worker within the Police Department, as well as a contract with Canopy Roots through May, and a Paramedic and Social Worker through Hennepin County. She said there is also a position within Parks and Recreation called Workers and Interveners, and moving forward, maybe duplication for those types of positions can be looked at to determine if they are worth it. She reiterated that the Artist-in-Residence position is not worth it, considering all the other increases. She said that with the loss of a full-time Staff member in Communication, she hopes that other Staff can somehow bridge that gap through the website and other means, since maybe 0.25 of City residents are actually engaged. Councilmember Jerzak said he appreciates Councilmember Moore's comments and her dissent, but negotiating a budget requires give and take, and no one ever gets everything they want. He said while he appreciates some residents saying they would rather pay more than eliminate City Staff, some people do not have the capacity to pay more, and there is a delicate balance. He said he met with Dr. Edwards a number of times to discuss the budget, and appreciates the Staff's efforts in making these difficult decisions, and they did the best they could with what the City has. He said he would support the budget. Councilmember Kragness thanked City Staff for getting the levy as low as they could and knows it was a team effort. She said she wanted to comment on the miscommunication that went out about a zero percent levy increase, which is not realistic when the cost of living has already increased by three percent, and the Council needs to be careful about the information that they are putting out. She said that this notion also pertains to the Community Center closing, and recognizing that things can change before putting information out to the public. She said she does not agree with everything that has happened to get the City to this point, but she understands it and is willing to go forward with what it is. Mayor Graves thanked the residents who commented and said she tends to agree with everyone's statements to one effect or another. She said she is not entirely happy with the cuts that happened to the budget, and has a difference in opinion about what essential services are for the City, and ways to invest in the City. She said City Staff worked very hard, and collaborated across Departments and brought back a budget that the Council could get behind collectively. She said she hopes to continue to see the benefits of some of the work that the Council has done over the last four to five years, which has been innovative in community development, prevention, and safety, and start to quantify the benefits and ways to save money. She said she understands that it takes time, sometimes five to 10 years, to see the cost benefits of decisions that they are making now. She said she is feeling a little bit disappointed, but at the same time, feeling a sense of accomplishment because they have gotten to this point together with the help of the Staff while respecting each other's differences and having respectful conversations. 12/01/25 -7- Mayor Graves moved and Councilmember Kragness seconded to adopt a RESOLUTION adopting the 2026 Annual City budget. Councilmember Moore voted against the same. Motion passed. RESOLUTION APPROVING THE 2026-2035 CAPITAL IMPROVEMENT PLAN AND ADOPTING THE 2026 CAPITAL PROGRAM Councilmember Kragness moved, and Mayor Graves seconded to adopt a RESOLUTION Approving the 2026-2035 Capital Improvement Plan and Adopting the 2026 Capital Program. Motion passed unanimously. RESOLUTION APPROVING FINAL TAX CAPACITY LEVIES FOR THE GENERAL FUND AND DEBT SERVICE FUNDS AND A MARKET VALUE TAX LEVY FOR THE HOUSING AND REDEVELOPMENT AUTHORITY FOR PROPERTY TAXES PAYABLE IN 2026 Councilmember Kragness moved, and Mayor Graves seconded to adopt a RESOLUTION Approving Final Tax Capacity Levies for the General Fund and Debt Service Funds and a Market Value Tax Levy for Housing and Redevelopment Authority for Property Taxes Payable in 2026. Motion passed unanimously. ADJOURNMENT Councilmember Kragness moved and Mayor Graves seconded adjournment of the Special Session at 7:25 pm. Motion passed unanimously.