City Council April 08, 2026   4/8/2026

Good afternoon.

My name is Elliott Payne.

I'm the President of Minneapolis City Council.

At this time I'm going to call to order this meeting of the City Council and I will start this meeting by ensuring we have a quorum of the City Council and adopting our agenda.

What do you want to do for BET, Mr.

Clerk?

Yeah, thank you President Payne.

I will call the roll on City Council to verify that we have a quorum of City Council.

Council member Chughtai is absent.

Whiting.

Present Chowdhury is absent.

Stevenson?

Present.

Rainville?

Present.

Chavez?

Present.

Warren is absent.

Wonsley?

Present.

Vice President Osman is absent.

President Payne?

Present.

With that, the agenda for today's meeting is before us.

I will ask for a motion from a member of the City Council to adopt the agenda.

So moved.

It's been moved and seconded.

Councilmember Whiting?

Aye.

Stevenson?

Aye.

Before we begin the meeting, let me remind all members and staff that this meeting is broadcast to enable greater public participation.

The broadcast includes real-time captioning as a means to increase the accessibility of our proceedings to the community.

Therefore, all speakers need to be mindful of the rate of their speech so our captioners can fully capture and transcribe all comments for the broadcast.

I will ask Andrew Hawkins from the Clerk's Office to introduce this item and our presenters.

Thank you.

Council President Payne, BET President Brandt, and BET Vice President Harris Bernstein, members of the City Council, and members of the Board of Estimate Taxation.

Take a breath.

Good afternoon, all of you.

My name's Andrew Hawkins, and I serve as a director of legislative research and oversight for the city's legislative department.

Today's joint session provides an opportunity to deliver the report on national landscapes of municipal revenue sources to both bodies through a single platform to ensure that all parties have the opportunity to receive that information together.

The intent of this work was to provide a landscape analysis on the range of options, or the range of municipal revenue options currently utilized across cities nationwide.

This analysis includes example programs and revenues, as well as identification on the feasibility and availability to the city of Minneapolis.

Good afternoon City Council members and members of the Board of Estimation and Taxation.

My name is Margaret Shouse and I'm a director in the state and local government practice at Guidehouse, a professional services firm that delivers advisory, technology, and managed services to public and private sector clients.

I'm joined today by my colleague Lucy O'Keefe and we will be presenting Guidehouse's research on municipal revenue diversification.

First, I want to thank the City Council and BET for the opportunity to share this work with you today, fittingly during the peak of tax filing season.

And I also want to thank the Office of the City Clerk for their sponsorship of this research.

During this briefing, we will lay out the purpose and context for this work, summarize our key findings, including areas where Minneapolis' revenue practices are aligned with comparator cities and where it is distinct, deep dive into details of revenue strategies adopted by comparator cities that could support new revenue generation for the city, and invite your questions at the end, although Lucy and I will be sure to periodically pause throughout in case there are questions that you have during our presentation.

The primary objective of this research was to identify potential opportunities for revenue generation that met key characteristics, including sustainability of revenue, size of potential revenue, and the ability to structure the strategy equitably.

This included our assessing Minneapolis' current revenue base, comparing the city's revenue performance to other cities, and evaluating leading practices by comparator cities for potential impact and applicability to the city.

We also examined the ease and feasibility of implementing these strategies.

We conducted this work from September through December 2025, and I believe you all have a copy of the final 63-page report from which this briefing is derived.

and our primary sources of data for this research included the city's open data portal, the Lincoln Institute of Land Policy's fiscally standardized city's database that allowed us to normalize comparison of revenue data across our 10 cities in our sample, as well as additional budgetary, fiscal and policy research.

So to summarize some of our key findings, when we compare Minneapolis to similar cities, two things stand out.

First, that the city relies more heavily on intergovernmental funding than most of the comparator cities, and second, that Minneapolis generates less revenue per resident than nearly all of those cities.

I'll show you the state on the next slide, but what it suggests is that there is room to strengthen and diversify the city's local revenue resources while staying in-family with peer cities.

Minneapolis can increase revenue generation by implementing new strategies and or adjusting existing sources.

Other cities are doing this in a variety of ways.

Common approaches include levying real estate transfer taxes, local income taxes, adjusting excise taxes, or introducing payments in lieu of taxes.

Of those options, we found that a few may be more promising candidates to consider.

For example, an individual income tax, real estate transfer tax, and payments in lieu of taxes demonstrate a higher alignment with the city's goals of sustainability, equity, and generation.

We understand that most new revenue generation strategies will require multi-year approval and adoption process, including state authorization.

To that end,

Should the City pursue this path, the City may wish to consider longer-term strategies balanced with more immediate opportunities, such as examining existing rates or improving how the City collects current revenues.

In our baseline review of Minneapolis' revenue composition, we looked at the last five years of budget data, or revenue data, rather.

And over this period, we found that the city's revenue picture has been relatively stable overall, but the composition is shifting due to a number of factors.

And what I'm about to describe is increasingly a common picture in municipal finance across the country.

First, as COVID era federal funding has phased out, intergovernmental revenue is declining and the cities are relying more heavily on taxes and fees in the current budget.

There's also growing pressure on the federal side as federal funding reductions, particularly in areas like housing, healthcare, workforce programs could directly impact service delivery.

Property taxes, of course, remain the city's largest single revenue source and they become more volatile as property values decline.

and at the same time the inflationary pressures are resulting in higher labor costs and growing capital costs that are pushing expenditures upward.

So taking all of these together, these dynamics create a structural challenge and the city's trying to manage rising costs and uncertain external funding without continuing to lean more heavily on property taxes.

This context frames the following considerations for Minneapolis, which is what mix of revenue strategies could provide a more resilient and diversified revenue structure that better aligns with the city's long-term fiscal goals.

For our revenue benchmarking, we identified nine comparator cities, shown in the table on the left.

On the right, they include San Francisco, New York, Denver, Seattle, Philadelphia, Portland, Boston, Atlanta, and Kansas City.

And these cities were selected in consultation with the city using the following qualitative and quantitative selection criteria.

Have they been cited in previous City of Minneapolis research or in other studies on municipal revenue generation?

Have they adopted innovative revenue strategies?

Are they comparable to Minneapolis in budget, population, or median income?

And or do they demonstrate alignment with the city's priorities and goals?

The intent here was to create a broad comparison group to give a grounded view of what revenue practices have been successfully adopted in other peer cities for further consideration.

Looking across these 10 cities, we found that compared to its peers, Minneapolis brings in less revenue

on a per capita basis.

Both overall, where the table shows in that first column, the city is ranked ninth place amongst its peers.

As well as from taxes specifically, where the city comes in 10th place.

With respect to charges, Minneapolis is ranked fourth in per capita revenue generation, and ninth in per capita miscellaneous revenue, and that includes things like rents and licenses and permits.

So there are reasons for these rankings.

First, Minneapolis leans heavily on property taxes.

About 87% of the city's tax revenue comes from that single source, with relatively little coming from sales tax or other options.

And certainly that kind of concentration creates risks and highlights a potential need to diversify.

Also compared to peer cities, Minneapolis' residential property values are relatively lower.

Among the 10 cities in our sample, only Philadelphia and Kansas City had lower median residential property values than Minneapolis.

By contrast, many peer cities have diversified tax structures that also include income taxes, sales taxes, or business taxes.

and while there may be room to adjust charges and fees, understandably that comes with constraints.

Many of those fees feed into the enterprise funds where the use of those funds are restricted.

So even if rates for charges were to increase, that doesn't necessarily translate into flexible dollars for the city to use for general operations.

With that context on where Minneapolis stands today, the next question is, what are other cities doing differently?

And more importantly, which of those approaches could potentially apply to Minneapolis?

To answer that, we conducted a broad scan of revenue strategies adopted by peer cities,

We initially identified a dozen different taxes, fees, and charges.

And in discussions with the city, we focused further on the five strategies that you see highlighted in the yellow on top of this table, due to their higher potential for meeting goals for sustainability, equity, and magnitude of revenue generation.

So over the next 23 slides, we will be delving into more details of each of these five strategies.

Each of them have different strengths across those three characteristics, as well as measurements of how feasibly they could be implemented by the city.

And I'll take a moment here to just introduce each of them.

First, we'll delve into real estate transfer tax, which is levied at the transfer of property ownership

Next, payments in lieu of taxes, also called pilots, which are voluntary payments made by nonprofit entities to offset the cost of public services that they use.

Individual income tax, which can be levied on wages, salaries, investments, or other forms of income earned by an individual or household.

An empty homes tax, which is imposed on residential or commercial properties that remain unoccupied for a specified period of time, such as over six months.

And then finally, asset monetization, which involves generating public revenue from public assets such as land, building, or infrastructure through leasing partnerships or user-based charges.

To assess the value and applicability of each of these strategies to Minneapolis, as well as to assess and compare these strategies against each other, we created this scorecard qualitatively for which we scored each strategy, a low, medium, or high, across the six factors or categories you see on that first column.

And I'll walk through each briefly here.

are the first three of which you'll recognize.

So total generating revenue potential, we deemed an annual generation range of zero to $100 million as low, $100 to $200 million as medium, and $200 million or more as high, and that's annually.

Next, looking at equity of tax or fee burden, a one-size-fits-all approach would be deemed low,

The ability to moderately or modestly tier the strategy is deemed medium, and the ability to structure even more progressively is deemed high.

And sustainability, where a high variable revenue source would be rated low, a relatively consistent source with some fluctuation would be rated medium, and a fairly steady predictable source is rated high.

And we also added three additional factors to assess feasibility of implementation.

That includes ease of administration.

So for example, would the city need to set up new structures to implement that strategy?

And that would earn a low rating.

Or on the other end of the spectrum, are there pre-existing structures that the city could take advantage of which would earn it a high rating?

For public acceptability, based on the experience of peer cities that have implemented these strategies, we included a rating on the level of opposition they faced, low, medium, or high, from the public and or special interest groups.

And lastly, we rate the ease of implementation, which takes into account factors such as the level of stakeholder engagement needed based on the experience of peers, and whether state or local legislative action is required to advance.

Here is our qualitative scoring of each strategy in descending order based on overall rating.

Perhaps not surprising, but when we look at the most sustainable and equitable revenue options, they also tend to be the hardest to implement.

Clear example, individual income tax.

While it has the highest revenue potential across these strategies and can be designed to be progressive, there are legal stakeholder and policy hurdles that may make it a longer-term approach to implement.

On the other end of the spectrum, tools like pilot programs can be more feasible in the near term, but are unlikely to generate the revenue at the same scale.

We also acknowledge that the challenges today faced by nonprofits in today's environment make pilot a less palatable strategy, and the green scores here reflect the experience of implementing those pilot programs by peer cities and during a different time.

Now a real estate transfer tax sits somewhere in the middle.

It can generate meaningful revenue, it can be structured in a progressive way, and it faces relatively, comparatively fewer barriers than something like an income tax.

Councilmember Shaffer, did you have a question?

Oh, no, I did not.

I have a quick question.

For your revenue per capita calculation, I'm curious what's included in that.

So for instance, we have both a city and a park board levy, but that's different from the actual tax burden per capita, right?

So the county is assessing the levy as is the park board.

And so I'm wondering, as you're looking at those comparative cities,

Oh, that's a great question.

So to answer your question, the numerator is the total revenue that the city received based on the data in the city's open portal.

And then the denominator is the size of the population.

So it would not account for the tax burden that each citizen is experiencing in that per capita.

Right.

I wonder how much tax burden there is coming from King County versus Seattle and like what that ratio is, but we should be mindful then that that's something that's outside of the scope of what you're presenting, right?

Yes.

Vice President Harris Bernstein.

Hi, thank you for this.

Excited to dive in.

I just want, I think you might have just said this, but the ones we're going to go through are just the ones selected for further study.

Is that right today?

That's right.

Okay, thank you.

Yes.

I do want to circle back the question you asked.

We do have in the full report a table that does show that per capita calculation for each of the 10 cities, in case that was something that you're interested in taking a look at.

All right, let's dive now into real estate transfer taxes.

So this tax would diversify the city's property tax revenues and could be designed to promote equity via progressive fees and reinvestments into the community of those revenues earned.

Now in terms of revenue generating potential, this score is a medium representing an estimated $101 million to $159 million in annual revenue potential for the city.

and I'll walk through how we arrived at that estimate in a subsequent slide.

On equity it scores high as it primarily impacts those engaged in property transactions and as noted can be structured progressively.

For example, to focus on higher value properties.

It scores low on sustainability due to the sensitivity of this revenue source to real estate cycles.

And it scores high on ease of administration as the tax collection could occur at the point of sale by the title or settlement agent

and based on peers, public acceptability earned a medium score from public opposition.

And what this story really tells is that how you structure this tax is really important to how it is accepted and messaged to the public.

And then ease of implementation, we scored it a medium due to the existence of this tax at the state level, the deed tax, but still understand that implementing this tax would require legislative approval at the state level as well as local voter approval.

On this slide, what I'll highlight is the taxable population of entities, which describes who would be potentially impacted by the adoption of this tax strategy.

And as I mentioned, the application structure of this tax could be designed in a wide variety of ways, in terms of the tax rates, the tax threshold levels, the rate structures, the tax base, revenue uses, to reflect Minneapolis' unique real estate market dynamics and community priorities.

So drawing on some of the examples from our peer cities, in New York City, they use a tier transfer tax with higher rates on more expensive properties, while in Washington, D.C., they apply a relatively flat rate, but pair that with a high deed recordation tax, which results in a higher burden at the point of sale.

Meanwhile cities like San Francisco have highly progressive structures where rates increase significantly for luxury and commercial transactions.

And Chicago applies different rates depending on the property type with a portion dedicated to specific purposes like affordable housing.

So these differences reflect the local choices where often you see cities with higher cost housing markets often adopting more progressive rate structures while others prioritize simpler, flatter taxes or

choose to dedicate revenues to targeted policy goals.

On this slide, I'll walk through how we estimated the revenue potential of adopting a real estate transfer tax for Minneapolis.

And I'll caveat that all of these revenue estimates are high level and are intended to be illustrative of the generation potential.

And we would also recommend to conduct more in-depth combined modeling of impacts across local and state taxes if one were to pursue these, and that was outside the scope of this study.

So for this we estimated the upper range of 159 million by applying the City of Philadelphia's flat rate to the total value of Minneapolis's 2023 residential and commercial property sales.

We then dipped outside of our Pierce City cohort for a progressive tax example and applied Berkeley's tiered and progressive tax approach to the same 2023 figures for Minneapolis to arrive at that lower range estimate of 101 million.

To close out real estate transfer tax, let me highlight some of the pros and cons on the right side of this slide.

So on the pros side, these taxes are generally easy for the public to understand and often receive voter support, at least in the comparator cities that we looked at.

They also have relatively low administrative burden compared to other new taxes.

On the cons side, as I noted, careful policy design really matters.

Poorly set thresholds can distort the market, for example, causing buyers or sellers to cluster just below tax cutoffs.

And importantly, because these revenues can be volatile, it can make long-term budgeting more challenging.

Finally, I want to highlight in that yellow box that many cities have successfully used real estate transfer taxes to fund housing policy priorities.

In cities like Baltimore, Los Angeles, and Santa Fe, they've generated meaningful funding for housing initiatives through this revenue strategy.

I was glad to see the real estate transfer tax rank highly.

I think it's one of my top three.

I think it hits people when they are flush with cash, and that makes it a little bit less painless.

The revenue estimates that you made here based on other states' transfer tax percentages seem considerably higher than what we've employed here in Minnesota.

I just did some back-of-the-envelope calculations based on transactions in Minneapolis in the course of a year.

And the state rate here is 0.33 percent, considerably lower than

1.5 and for Hennepin County it's .01%.

My calculations, we'd be struggling even if the legislature were to approve us at the state rate, which I doubt they would, to reach 10 million in Minnesota.

That's a great question.

Yes, the examples we modeled here were based on the real estate transfer tax rates of those other cities.

But you raise a great point going back to looking at the impact of multiple taxes, knowing that the detaxes you mentioned at the state level, if this were to be considered local level, would be a combined effect.

But you raise a great point, which is because there are so many ways that you could structure this tax if you were to consider it,

Thank you, President Payne.

Just a quick question here, kind of on the administration piece of when these taxes show up for homebuyers.

That is a great question.

That is certainly one of the decisions that can be made in constructing such a tax.

In our research, it doesn't even always specify whether that tax is borne by the buyer or the seller, but we have often seen that that point of collections would be when that point of sale happens and is being filed with the agent.

Thank you.

I have a question about the difference between low and medium under

Eves of Implementation.

So, for the real estate tax, you've rated it as medium ease of implementation, but then you also note that it would require both state action and voters to pass it.

That is a great question.

I will say

This requirement is true of nearly all of the strategies that we're going to describe because of Dylan's Rule and Minnesota, like many states, requires that approval to pass new taxes.

And so this is more of a relative rating across what peer cities have experienced.

But I dare say, if we were to rate all of those high, you're right, many of these, I think except for asset monetization and pilot programs,

Yes, because these are all new taxes.

Okay, thank you.

Thank you.

Actually, Councilmember Stevenson's question, one that I wanted to ask around some of the procedural pieces that would be needed to unlock, there's already a state tax.

And actually, I'll start with my first question on that.

Do we have a sense of how much revenue is collected via the existing tax that's on the books right now?

Or a range?

Sorry, as a fan of the Minnesota Department of Revenue's Tax Handbook, I pulled it up.

And so our deed transfer tax, which I believe is what we're talking about here, raised $140 million in 2024.

Yeah.

OK.

Does it say if there is any dedication?

What I most liked about seeing the yellow kind of box complementing this is having it be dedicated towards a specific initiative.

And we've talked a lot about that, too, in our discussions of bringing in additional revenue.

Can it be dedicated towards meeting our needs to create more affordable housing or public housing, those things?

But once you know, does it say anything on the D-text?

So right now, it's just.

General Fund, okay.

And if that then is how much is reappropriated to different cities of that hundred million.

Vice President Bernstein.

President Payne, Council Member Wonsley.

Okay, so that is clarifying how the existing revenue works.

I'm very much interested in this piece of it sounds like there will have to be a complementary lobbying effort at the state level to get that exemption or approval for Minneapolis and then you mentioned at that point it would need to go through a ballot process as well.

OK, great.

And then earlier in the presentation, you mentioned something about fees.

And I want to make sure I have the same assumption of how you all are looking at fees.

So part of our conversation around revenue is about looking at this unlocking new taxes.

But also, right now, the only way in which we do have some very modest and restricted

Income that allows us to support some of our goals is through fee collections.

But again, that's heavily regulated and restricted at the state level.

But you mentioned there were fees that we could be charging.

Did you mean fees in the sense of the taxes or I see those often as separate things by state definition.

So just wanted to see.

Awesome.

Could you speak a little bit more on that?

I'm not sure.

I couldn't really see where that was broken down in the report or the presentation of where are some of those.

In our initial research, when I showed that table of 12.

Actually, let me go back to it.

We did look at trying to see if we did look at any fees.

We looked at service fees.

And so there was a limited review of the applicability there.

OK. Got you.

So does it seem like it was worth the bang?

OK. All right.

Those are the questions I had.

Thank you.

Vice President Bernstein.

Council President Payne.

I just had a question about the base for the estimate.

There's a note at the bottom that it includes high-value commercial real estate sales that occurred in 23, so it might not be representative, but it does include residential transactions as well.

It just also has some commercial.

Yes, theoretically, one thing the team did note is that there were some very high commercial real estate transactions.

Got it, thank you.

And then just to comment, I also am interested in this one, President Brandt's point about a tax that applies when people have the cash.

People already pay transaction fees like closing costs when they're selling homes or selling commercial properties, so that makes it interesting.

But I share his note about the tax rate.

So we do have the deed transfer, which is a third of a percent.

And then we also have a mortgage registry tax, which is a quarter of a percent or so.

So when you add that up, that's a little bit over a half a percent.

That's what folks in Minnesota are paying in taxes when they sell a property.

So, ostensibly, this is something the City Council could get behind, but it's going to be a tenth, at best, I would imagine, of the tax rate that's estimated here.

Just so folks are thinking about that.

I wanted to question you on something that is sort of a theme running through many of these revenue options and that's the assumption that a referendum would be needed.

Is that based on practice elsewhere or Minnesota law or city charter?

The reason I ask is I've been a property owner in Minneapolis for 50 years now and I

The only taxes that I think I've voted on have been school board operating levies when they go to a public referendum.

I think more typically the legislature gives the city the authority to do something and then we proceed.

For example, we didn't vote on the ballpark extra sales tax.

Thank you, you raise a great point.

Let me offer a response and see if Lucy has anything to add.

No, nothing to add to that.

Thank you.

Thank you, Mr.

Chair.

Going back to Councilmember Wonsley's questions, to take it one step further, in these other peer cities that you've looked at, is it ever the case that something like

The real estate transfer tax goes to, gets categorized as something like an affordable housing trust fund where all of that money automatically goes into something that is constrained.

Maybe it's for affordable housing, maybe it's for something environmentally focused.

Have you ever seen this in some of your reviews of other cities?

Yes, yes, we have definitely heard that and in a number of the cities that is

One of the requirements of their putting forward that local proposal how they would use that that new revenue source for local uses And so we have seen it applied not just to affordable housing but also to address homelessness Initiatives within some of these cities.

Interesting.

I added myself to cue because I was curious for the comparator cities

That is a great question.

I'm trying to think back of our peer cities.

How about I will say that in doing our review, I know that is always the desire, to be able to provide some offsetting relief if one is to do that compounded impact analysis of different taxes.

It does not, of course, always happen, which is the rub.

Thank you.

All right.

No, thank you for those great questions.

Let's dive now into payment in lieu of taxes or pilot programs.

So this strategy would allow Minneapolis to grow revenues by creating a voluntary pathway for tax-exempt organizations to contribute financially to the public services that they use.

The strategy may be less desirable from an equity standpoint, as it focuses revenue generation on non-profit institutions that may already be resource constrained.

On that note, I will take a lighter touch going over this strategy, given those pronounced constraints for non-profits in the present environment.

But in terms of revenue generating potential, it scores low, representing an estimate of 10 million to 19 million dollars in annual revenue potential for the city.

It scores low on equity as levies are typically based on fixed percentage of a property tax value across all voluntary participants.

It scores medium on sustainability due to its relative stability as a revenue source when implemented in pure cities.

It scores medium on ease of administration as the city may need to set up a new system to administer and operate revenue collection.

Based on peers, they reported a high score for public acceptability.

While pilot adoption did not generate significant public opposition in peer cities, given that it does not increase the tax burden on city residents and participation is optional.

and for ease of implementation, it was scored as high as implementing the strategy would not require a legal or policy change.

But as previously noted, participation would likely be limited in the present environment.

I'll skip ahead actually two slides.

to focus on our estimate of potential revenue.

And again, this estimate is very rough knowing, of course, that participation would be voluntary.

But how we calculated this range of $10 to $19 million from Minneapolis was to look at other cities that have implemented a pilot program to calculate what percentage of their city's budget is, their budget's revenue is generated from pilot.

and then applying that to Minneapolis' FY26 budget level of $1.9 billion.

So in our examples, we saw a range of 0.5% of the city's budget coming from pilot to 1%.

We applied that to the FY26 budget for Minneapolis and that's how we derived the 10 to 19 million potential range for the city.

To close out Pilot, let me highlight the pros and cons on the right side.

As noted on the pro side, Pilot programs create a pathway for tax-exempt non-profits to contribute to the cost of public services they use, and it helps rebalance the tax burden between non-profits and city taxpayers.

On the con side, costs may be passed on through higher fees or reduced services.

Revenue potential may be limited if non-profits prefer to contribute via in-kind contributions over cash payments.

And there is a risk of damaging government non-profit relationships if negotiations are not carefully structured.

Thank you President Payne.

I did want to see if there was some localized analysis or kind of break down a percentage of what our landscape looks like as it pertains to these categories here in Minneapolis.

I think what is most interesting about this is

In Minneapolis, we do have a concentration of universities, both private and public, and seeing if that factored, if there were exemptions that you saw be lobbied for as it pertains to public institutions, even the hospitals.

Right now, we're also experiencing some volatile dynamics with our health care systems, where larger corporate health care institutions are

trying to absorb some of the smaller ones.

Right now, even our county is trying to figure out how to preserve our existing regional hospital, which is publicly owned.

So I just wanted to know if there was some of that more localized analysis done, too, and thinking of we do have a decent concentration of specifically both hospitals, universities right here in Minneapolis, nonprofits.

We have a lot of non-profits, also called Minnesota Land of 10,000, Lays Land of 10,000 different non-profits as well.

Yes, no, that's a great question.

Unfortunately, we didn't do that.

I understand, I think the question would be to assess the percentage of land that is occupied by tax exempt organizations.

Yes, it would essentially be if they were not a tax-exempt organization, what would be the property tax value that they would pay?

And then in some of the examples we've seen, it would be set perhaps at something like 25 percent, and then there would be a further negotiation for those

Oh, okay.

This is good to know.

I know we have some of those Ankind services actually with some of our university partners, but this is great to see also other ways to actually bring that into tangible and concrete revenue too.

Yeah, this is related to that previous comment.

But in the Boston example, with many schools and universities, do those schools have significant in-kind situations like we have with the U of M as far as shared services around roads, et cetera?

That is a great question.

No, we didn't really dig into that as much.

So the City of Boston does publish the results of their program annually and in that you can see the breakdown of what they end up actually paying in terms of a pilot amount and then what was valued in terms of in-kind services or those kinds of partnerships with the city.

I just think that maybe we need to hold these potential revenue source numbers lightly.

Yes, absolutely.

That is a great point.

President Brown.

I'd just like to point out that very deep in the most recent assessment report which both bodies received is a breakdown of where the non-profit or tax-exempt property lies in whose hands and there's a considerable amount that's in public hands that we wouldn't be taxing.

I think the elephant in the room here and I would defer to

Councilmember Wonsley or even the attorney's office is the University of Minnesota, which I've always had sort of a murky understanding of in terms of whether they're subject to city laws and so on.

Do you have a sense of whether the city could compel if a pilot law passed or didn't even need to be passed

which happened voluntarily whether they would be subject to that.

Yeah, I think this is a situation to where if we pursue something like this, this will require the stakeholder engagement and also pointing to like what we highlighted what is already on the roster like we have joint power agreements with the U of M for a variety of services.

Specifically, I think of we just approved one related to MPD where in exchange for

for filling a training need of MPD.

They're given space at a U of M facility.

So it would be really looking through our departments and getting a breakdown of where are some of those in-kind service agreements, where those exist.

Maybe also getting a value of what that could be attached to.

But I know that also exists too with public works as well.

Some of the things that you mentioned of like to share right-of-ways.

But there are some things that I would love to explore that I don't think has been quantified, especially when it comes to housing.

I think that's a really big piece around the U.

They're also doing significant development or have this this 10-year plus

Like development plan for the U where they're looking at being a hub for public research What does that allow us opportunities to further engage on like where we could expand some partnerships on?

I would just add, I think my understanding, and I'll maybe lean on the experts here, is that the point of a pilot is you're not compelling people, they're volunteering, so it's kind of the exact opposite of a levy.

I think that is everybody on this topic.

Just one last brief point.

The Citizens League undertook a massive project a number of years ago, I think about eight or nine years ago, with the city of St. Paul.

St. Paul has, yes, a lot of government buildings, but also a number of museums.

and other nonprofits and colleges and universities.

And they undertook a very kind of intense study.

I can't read the article.

It's 106 pages long up here on this dais to summarize it.

But ultimately, they did go into it similar to what the presenter said, which is, ask nicely.

Find a compelling way to show how

you're benefiting from one another.

Ultimately though, St. Paul did decide not to move forward with any such thing.

But it is an interesting read that has a lot of similarities to Minneapolis, for whatever that's worth.

All right, thank you.

I appreciate all those questions.

Let's dive now into individual income tax.

and an income tax would help diversify Minneapolis's tax portfolio, increase fiscal autonomy and offset property tax burden on low and middle income households.

It comes with substantial legislative hurdles and likely resident pushback and it has moderate alignment with city revenue goals as the tax can be progressively structured to focus on highest income residents and generates a relatively stable revenue source.

In terms of revenue generating magnitude, this has the greatest potential by a wide margin, representing an estimated $291 million to $410 million in annual revenue potential for the city.

It scores medium to high on equity, particularly if structured progressively based on income levels or focused on unearned income.

It scores high on sustainability, as it performs relatively well, but can fluctuate with economic conditions and employment trends.

It scores medium on ease of administration, as the city could leverage Minnesota's existing income tax collection system to administer.

Public acceptability, not surprisingly, earned a low score, as income taxes often face strong opposition for increasing the overall tax burden on residents.

While it was raised earlier, it is possible to reduce another tax to offset the creation of an income tax.

This has not consistently happened in peer cities.

We also acknowledge that Minnesota's state income tax is relatively high among states and that adding a local income tax would require modeling the impact of both.

And ease of implementation is assessed as low due to the level of stakeholder engagement needed to make the case for this tax and that it would require legislative action at the state level.

On this slide, we briefly note that residents and non-residents are potential taxable entities.

So similar to real estate transfer taxes, there are a wide range of ways to implement an income tax, and I'll share some examples from across our peer cities.

For example, in New York City, they use a progressive graduated income tax applied to residents only, administered through a state piggyback system and based on broad taxable income, not just wages, resulting in a comprehensive and relatively stable revenue source for the city.

Philadelphia, as an example, uses a flat wage tax applied to both residents and non-residents working in the city with different rates for each group.

and employers do the withholding.

This creates a straightforward though less progressive revenue source.

Notably in Philadelphia, the tax rates are scheduled to gradually decrease over the next five years with the city reducing rates to improve competitiveness and reduce burden on workers.

So you'll note these variations really reflect local policy choices.

Cities with stronger equity goals and administrative capacity like New York City tend to adopt more progressive broad-based income taxes, while others, like in this example, Philadelphia, favor simpler flat rate wages taxes that are easier to administer but less progressive.

And then some jurisdictions also layer in targeted or high income only taxes to fund specific initiatives.

On this slide, I'll highlight how we estimated the revenue potential of adopting an individual income tax for Minneapolis.

Of course, a lot of assumptions also baked into this estimate.

This calculation assumes an individual income tax assessed on wages and earned income.

And as previously noted, that doesn't have to be the way that this tax is structured.

That was used for the purposes of this estimate.

We arrived at the low range estimate of $291 million by simply assessing a flat 1% rate to total household income in Minneapolis.

And then we estimated the upper range of $410 million by applying a graduated tax rate of 1 to 2% to the highest tax bracket of $200,000 a year or greater.

And all other households were assessed a 1% income tax rate.

I'll also caveat that to do this estimate we didn't have access to granular data on individual and household incomes for Minneapolis to refine this estimate.

To close out individual income tax, let me highlight the pros and cons on the right of the slide.

On the pro side, an individual income tax diversifies revenue, can broaden the tax base, and increases local control over funding.

Again, it can be structured to be more progressive than other local options such as sales and excise taxes, which tend to be regressive.

On the con side, this revenue is more volatile, fluctuating with economic cycles.

It adds to an already high income tax burden at the federal and state levels, raising competitiveness concerns.

And depending on how it is structured, it may create a risk of taxpayer relocation, although evidence of the scale is mixed.

Yeah, just a technical question.

Great question.

Great, thank you.

President Moran?

Thank you, President Payne.

I wanted to ask, first of all, about the evidence of out-migration being mixed.

Do you have any sort of addendum that we could go to for further information on that?

Because I've made no secret of my interest in exploring the feasibility of this approach.

But I agree that we ought to know the answer there before we plunge ahead.

If we were to plunge ahead, and I say we, I mean the council, which is in the driver's seat on this.

That's a great question.

Unfortunately, much of the data we found here was anecdotal.

Okay, thank you.

I just would say that

Even as an advocate for exploring this area, there's many questions that remain regarding how an income tax might be structured, various technical points, and I assume that the fact that you haven't moved ahead in those areas at this point means that you're waiting for a clear direction from the council on which of these possibilities for raising revenue should be pursued before you

Our scope of work concluded with this final report.

All right, thank you.

I will just only caveat to say it was interesting in some cities where the income tax does apply to individuals who work in the city but of course reside elsewhere.

Going back again, there are so many interesting different ways to structure this.

That effect was part of some cities.

Thank you, President Payne.

And this has just been an ongoing conversation around what could we do so there was a goal to have a more broad analysis around what is the landscape with comparative cities.

What are some specific tools we could be exploring to bring in additional

revenue within getting this presentation ideally following up from there.

But that said, I did also see this as one to further explore.

Also, want to make sure that we're in our further exploration of this one, looking at some of the more localized dynamics we're experiencing where we're seeing corporate flight or businesses lay off

I want to make sure if this is something very different or maybe it's similar to the payroll tax.

I think of an example of the Amazon tax that was

initially passed and then repealed due to opposition by the businesses in Seattle, where I believe it was a payroll tax for high earners associated with those corporations that were based in Seattle, and also complemented that with a dedicated focus.

So it was to go towards addressing homelessness and housing, specifically to give some type of restrictions and purpose to those

Is that similar, like the payroll tax?

Yes, I think that does count as a potential category or a way to structure.

We have certainly seen that in some of our peer cities, just what you mentioned, either a payroll tax that could be based on certain higher earners, it could be based on the number of employees you had, of course, applied to businesses that have employees over a certain threshold number, certainly could be a percentage as well.

Thank you for that clarity again, something as we're thinking through which of these recommendations we'll like to pursue.

I absolutely agree there needs to be a more municipal analysis of some of those dynamics.

Even with now the massive push to get what were large segments of remote workers back into the cities, especially to bring back downtown, what does that dynamic mean for something like this?

You answered or provided clarity there.

I know that tax flight is kind of like the number one critique of an income tax, especially for a municipality.

It sounds like there's not a lot of hard data around that.

It's more anecdotal.

I'm curious if it's similar, you know, the mechanism of shifting compensation from income to like

shares, as an example.

I remember there was a whole era when people would make it sound like, oh, the CEO is so ambivalent, they only take a dollar salary.

But of course that was a tax advantage for them.

Where there are income taxes, do you see

I don't think we saw that example in any of our peer cities.

No, we do include, I'm just thinking of the Seattle payroll tax

In particular, we do include an analysis of that in the full report, not the deep dive.

Just a curiosity.

Thank you.

Okay, great.

There's two more strategies left, empty homes tax and asset monetization.

So for empty homes tax, this is one in which the owners of properties that are vacant for more than 182 days or half a year, whether consecutive or non-consecutive in a calendar year are charged a tax.

One of the interesting insights from this research was that it can be designed progressively in order to target higher income residents and businesses.

However, the administration and enforcement of the strategy may be challenging based on, for example, the availability of vacancy data and existing infrastructure to implement attacks like this and enforce it.

In terms of scoring for total revenue, we scored this as low, estimating about $6 to $12 million generated annually from a tax like this.

And we'll walk through the case study example of how we arrived at that range.

As far as equity, we rated this medium.

The tax is applied equally to vacant properties regardless of property value, so different from the real estate transfer tax.

However, it may target higher income property owners, for example, that own more than one property that they do not reside in the city.

As far as sustainability, this provides a consistent source of revenue with some fluctuations depending on, again, real estate market conditions.

And then in terms of ease of administration, kind of already touched on this, but it really does depend on the level of vacancy data that the city has or is able to collect.

And one thing that came up in our research is the potential to use, so Minneapolis has an existing vacant building registration program, and there's data tied to this program.

who our understanding is that the data in this program and the registry of information on vacant properties is more focused on abandoned property in the city.

As far as public acceptability, we put this one as low, although we

see that this one may face less opposition from the public than a real estate transfer tax, but could face more opposition from different stakeholder groups like real estate special interest groups, for example.

As far as ease of implementation, again, really depends on the city's existing infrastructure to implement this tax and the availability of data to track and enforce implementation.

Moving on to the next slide.

So an empty homes tax, and we've touched on this with other strategies, may require state and local approval, and the revenue would really depend on the number of properties in Minneapolis to which this tax would apply, so it's really important to do that baseline research to see exactly how many properties would fall under this tax, potentially.

And then as far as ease of implementation, again, we rated this medium, estimated revenue low.

When we looked across peer studies and the per capita revenue generated from them, it was about $12 to $47 per capita.

As far as who is impacted by this tax, this tax applies to property owners whose units are vacant for more than half of a year.

So this includes, for example, second homes not in regular use, inherited properties that are left empty, and ADUs, for example.

So there are some, in cities that have an empty homes tax, there are some specific exclusions and exemptions which I can walk through a few examples of.

So periods of vacancy that qualify for one of several vacancy exclusion periods

that do not count towards the 182 days include, for example, building permit application periods, a rehabilitation period, disaster period, case of owner death, lease period.

Some exemptions, so for example, the Berkeley in Oakland, which we look at, they exempt properties that are owned by organizations that are nonprofits.

And then they also exclude properties that contain four or fewer residential units, sorry, owner-occupied properties that contain four or fewer residential units, so think multi-family properties.

And then those that are owned by, owned in a trust.

So although empty home stocks typically applies to residential units, some cities also levy this tax on commercial properties as well, so it can be used to both residential and commercial properties.

And so I did, we do have this call out which I already mentioned about

The city's existing vacant building registration program, that's an annual fee that property owners pay for the city and this is something that we could potentially look at the data further to see if it could be leveraged towards something like an empty homes tax.

All right.

In terms of the tax structure, this is a flat rate and annual fee.

How it would be administered, the city would use vacancy data to identify vacant residential and or commercial units in the city.

They could provide a written notice that would be sent of the amount owed and then taxpayers would have a certain number of days to pay the statement and or claim an exemption or an exclusion.

How revenue generation was calculated.

So we used Berkeley's empty homes tax as the case study here.

So the City of Berkeley charges $3,000 per unit for a single family home, condos, duplexes, and townhouses.

That's in the first year of vacancy and then in each subsequent year.

Property owners are charged $6,000 and then the rate is higher per year for all other residential units or for example apartments for the first year the unit is vacant and then in subsequent years the tax goes up to $12,000.

So to do the calculation on this slide, we used the US Census Bureau's housing vacancy survey data for the city of Minneapolis.

So the vacancy rate based on this data set for the city of Minneapolis in 2024 was 4.9%.

This is about 21,675 properties.

Of that vacancy rate, it's broken down into different housing types or different unit types.

So 77% are apartments, 9% are single-family homes, and 50% are other.

So we group together single-family homes, condos, duplexes, townhouses together, and then we

took basically, we assumed that the city may only be able to collect between five to 10% of the tax from available vacant units.

So we took five to 10% of that 21,000 number and then calculated the number of units of that five to 10% that would fall into those two categories.

So the single family condo duplex versus the apartments and other units.

And then we did not include, just noting in this calculation, we did not include properties that may be excluded or exempted.

So this might be an overestimate of the tax revenue here.

and some of the implementation considerations.

Obviously, the current state statute does not permit the city to levy an empty homes tax, but there's some existing precedents like the city has a blight tax and a vacant buildings registration fee.

And then as far as community engagement, as we've mentioned with the other strategies, it's important to engage community,

the community members and any affected stakeholders to educate them on the empty homes tax, how it works, and sort of dispel any potential misconceptions.

From an administrative standpoint, again, this really program heavily relies on the availability of vacancy data.

From an equity standpoint, the tax would be really borne by owners of multi-family properties with multiple vacant units and single-family homeowners with multiple

Properties, and perhaps it could be designed, for example, to have less of an impact on smaller multi-family property owners.

Some of the pros, so the cities can generate revenue in a more progressive manner by focusing the tax on property owners who own multiple vacant units.

The empty homes tax can also incentivize property owners to sell units that have been vacant rather than pay the tax returning housing stock to the market.

And then as far as cons, empty homes taxes may face stronger opposition from property rights advocates and real estate interests, making them potentially more challenging to implement.

In terms of defining vacancies, establishing enforcement mechanisms, and managing expectations, there may be some challenges.

And in the box below, we highlight the two examples of cities in California that have passed empty homes taxes into law.

The San Francisco example that is currently held up in court.

There's been a lot of stakeholder opposition to it.

And then Oakland similarly has a empty homes tax.

So it's really an empty, yeah, empty homes tax that applies to both residential and commercial.

And the threshold in terms of number of days vacant is smaller.

Alright, I will pause there if there are any questions on empty homes tax.

Thank you.

I just had a question.

You said that death is a reason for, you know, having a pause on this and I'm just wondering is it the entire time during probate?

Yeah, it's during probate exactly.

Okay, yeah.

Yeah, this one I was really excited to see.

Our office has worked with CPED on advancing vacancy fees, which is within our jurisdiction right now, to recoup the full cost of vacant properties, essentially becoming a nuisance when we have to be responsive to homelessness, all sorts of things as a result of prolonged vacancies.

And CPED most

Recent presentation on this last year really looked at kind of the same points of six months to a year of prolonged vacancies and some of the things that was highlighted in trying to advance that work is we don't have, when we're thinking of administration, a really solid infrastructure in actually keeping track of vacant units and that has been the hold up in

I think some of the recommendations that our staff recommended was looking at utilities as a way to try to track whether or not a unit has been vacant.

And that's been the biggest issue.

And then also what would be needed to ramp up staffing support so there could be proactive inspections to detect when a unit is being vacant in a prolonged sense.

And something that complements our fees program, because they have to legally, is when you mention

the sense of inspiring property owners to either sell or activate the properties because I think this is one of the biggest things of we have empty, you know, homes, commercial spaces, I'm glad you brought that up, that do create blind sites in our communities and they also impact property or real estate values as well when they're vacant and we see disproportionate, like, inequitable impacts of that across the city.

We do have a portion of property owners who have portfolios here and live elsewhere and so I do think there is this piece of okay you have the ability through our existing fee program or the vacant building registry to say let's work with you to figure out how to either activate this space

or sell it to a working class resident who wants the dream of home ownership.

So this is one that I find most fascinating.

And also we've made some significant work.

I think we've just seen

stalling a month's advancement and because some of the things that I mentioned earlier with our staff and actually moving forward with this and we even looked at a phased approach of administering this fee over time for these particular type of properties that are not nuisance because we already revamped pro-loan vacancy fees for properties that are considered a nuisance by our code.

So looking at the ones who are not,

and are just sitting there in our community.

Thank you.

Just a few quick questions.

Okay, thank you.

And San Francisco's ordinance was struck down.

As you note, how about Oakland?

It's different, and yeah, it's still in force.

Okay.

Our vacant boarded registration program here, if it operates under the same legal restrictions it did 15 years ago, is limited to provable costs of city administration related to overseeing these sorts of properties.

Do you anticipate that the

that we would have any problems from a legal standpoint piggybacking a pure tax on top of a registration type tax.

Yeah, just following up on Councilmember Wonsley's questions.

I'm curious, did you have any sort of empirical data on the effect of vacant buildings by this?

Yeah, we couldn't find any data, but that would be interesting if we were able to get that from Oakland and Berkeley that have this tax.

But yeah, we weren't able to explore that.

It seems like pretty consistent.

Okay, all right, thank you.

Thank you, Council President.

Just resonating with what Council Member Wonsley just spoke about with respect to vacant properties, not only are properties left vacant then by individual owners, but in this fee that we're assessing for properties or for commercial properties, both residential and commercial properties,

You know, I think the fee is a nice gesture to kind of get people motivated, but I could see it a lot stronger.

Then I'm also concerned about how the city indemnifies itself when they host vacant properties left within communities that then

are not developed or they sit stagnant for years on years on end because that is a significant problem within my ward specifically and how it relates to how we assess taxes with respect to properties that are, you know, it's not an even tax base.

When there are properties that are owned by the city and then a slew of additional

vacant properties, and then we look at areas of concentrated poverty where there's not enough income generated in the homes within themselves, even those that are then occupied, right?

That we're able to balance that revenue and ensure that we are being an equitable voice

for the community in its totality.

So I'm really curious at how the city plans to indemnify the communities themselves as the city, right?

Hosting properties in the ward that are then left vacant and what that means for the communities as well.

You know, we didn't include that in our research, but those are great points.

Yes.

OK.

Thank you.

I'm not sure, the strategies for having homes occupied is quite a bit different than vacant commercial space.

And I see in some of these notes, and it might have been I needed to step out for a phone call that I didn't hear everything you had to say about the vacant commercial property.

I have a group of people who ask me about this every single month at a business association meeting saying there is so much activation that they could do on a couple of these MT commercial properties in my ward.

As I imagine others have too, I know others have too, and there's space for artists, there's space for like pop-up coffee shops, there's ways to really activate a space to make it a vibrant commercial note or corridor and yet the

The owners of these empty commercial spaces just aren't interested at all.

It would be too much of a hassle for them.

They'd rather just leave them empty.

They are not blighted.

They are not boarded, but they are just sitting empty and they do create a real

It doesn't help with the vibrancy, whether we're talking about uptown or 50th in France.

Yeah, so the one other example that I mentioned is the city of Oakland.

But actually, so even though that tax applies to both residential and commercial properties, it only applies to ground floor commercial spaces.

And that's $3,000 annually, and then it goes up.

It goes up in subsequent years.

But to your point, how has that tax impacted the activation of those spaces?

We didn't really dig into our research.

Vice President Bernstein.

Yeah, I just wanted to just kind of put my marker down on this as well as something that I heard a lot of approval from when I was talking to voters over the summer and in the fall and it seems like we're hearing a lot of agreement here so I just kind of wanted to flag that.

I think this is a really interesting area and I think she just walked out but I really appreciated Councilmember Warren's comments as well about the vacant city property.

I think the city owns an enormous amount.

We're going to talk about asset monetization next.

The city owns an enormous amount of land.

and are we using that, putting that space to good use and I think it just seems like something that a lot of people agree on and so as we're facing a difficult budget year, several difficult budget years possibly, there's a range of densities in the cities that we're comparing here and density is an important driver of the strength of our tax base as well and so thinking about how we treat empty homes, empty commercial space and city property, I think that's all very related and so I'm glad to hear a lot of interesting consensus on those topics, just wanted to say that, thanks.

I wanted to make one comment before I headed to head out for my colleagues and I guess this is just a bigger picture thing but these items I really appreciate this work these items that we're looking at are ten million dollars or less except for the income tax.

We are facing property tax increases of eight percent or more on a two billion dollar budget.

So while I appreciate looking at these additional revenue streams and we need to keep this on our radar, we also need to think about a study like this around the very efficiencies of our government and our departments within the city.

that because if we start bringing forward additional revenue, additional taxes without having done our homework on the city, I'm talking to my colleagues here, around a serious study on efficiencies around city departments, this seems inauthentic.

because of the pain that our constituents are feeling around property tax increases.

And I just want to point out these dollar amounts are not nothing, but they are relatively insignificant in light of the budgetary pressures we will be facing.

So thank you.

I'm gonna call on Councilmember Wanzi-Click, but just to

Just so you're aware, an audit is actually working on an efficiency study that's supposed to be coming out in the next month or two.

And they've been at it for a few months.

Yeah, actually in response to that too, a couple of things that's moving is we asked the administration to do a fee study and fee analysis to look at the places where we are undercharging for existing city services.

We also believe that performance

Management and Information is supposed to be doing this work as well of analysis of department program by program of what's not, you know, being basically how those programs are being administered if we actually

needs to be rethinking some of those things.

So from my understanding, this body has been moving that analysis of where we could be more efficient, where we could reappropriate and redirect existing dollars.

But I want to say, if we are able to find ways to recoup $1 million, $2 million, we should pursue those efforts regardless, because that means $1 million, $2 million off the shoulders of taxpayers as well.

So I think this is the case of trying to figure out a multitude of

Oh, you're good?

Okay.

I'm going to have you continue, but I'm also just flagged that we are at our quorum threshold for council, so if anybody has any intentions on leaving, please let me know because we don't want to lose quorum.

Okay.

All right.

So the next strategy, and I'll try to move through these ones quickly, as mentioned, asset monetization.

So we also included within asset monetization, even though this is a tax example, an outdoor advertising tax.

So an outdoor advertising tax is an example of asset monetization employed by cities, including the city of Philadelphia.

Minneapolis can consider imposing a tax on the rental or sale of outdoor advertising space as a strategy to increase revenue without imposing additional taxes on residents.

So the tax would be administered by the city as a percentage of the purchase or rental price of advertising space and imposed on companies that are, for example, advertising on billboards, benches, bus shelters, and other street furniture.

The tax would be collected by the ad space vendor, so it essentially would operate like a sales tax.

Some of the interesting findings from this research is that although the outdoor advertising tax would be relatively straightforward to implement, the revenue generating potential may be quite limited, so something to look at.

We did not create an estimate of revenue generating potential for this one, just given the lack of availability of data, knowing the amount of advertising space in the city.

So more exploration would need to be done there.

In terms of equity, we

This one is low.

It requires all outdoor advertisers to pay a fixed percentage, so it applies to small businesses and large businesses equally.

And as far as sustainability, it does provide a relatively consistent, but again, small source of revenue.

and then ease of administration, relatively straightforward, the talks is collected at the point of sale, so we scored this one as medium and then public acceptability, it might face some public opposition from small businesses just because it is applied equally regardless of business size.

Yeah, okay.

Okay, I'll jump forward to the last one.

Let me just move to the right slide.

So sale of lease of public assets.

So this is a type of asset monetization that involves converting non-revenue generating city assets into sources of income.

Minneapolis could conduct an asset inventory to identify underutilized public assets such as land, buildings, and infrastructure.

and monetize those through sale, leasing, redevelopment, or public partnerships.

Funding generated from the strategy could be earmarked for funding priorities like affordable housing.

Essentially, the aim of the strategy is to really unlock hidden revenue in publicly owned land and buildings without raising taxes.

As far as key insights, the sale and lease of public assets would likely face lower public opposition, but the strategy is limited by low dependability of revenue and lower ease of administration and obviously require some work in terms of putting together that asset inventory.

I'll move forward in the slides here.

So as far as justification, the city could monetize and generate revenue from some of these underutilized assets while limiting additional tax burden on residents.

Again, we did not estimate annual revenue associated with asset monetization, but this would be a first step really in exploring the strategy further and putting together that asset inventory of existing public infrastructure and other assets that are underutilized.

As far as tax structure, this is not a tax or fee imposed.

And then as far as tax administration, the city would identify these underutilized assets and generate revenue from them either by selling them or through leases.

And so there are

We did see a couple examples of asset monetization.

For example, the city of Atlanta joined this incubator program back in 2022.

And they conducted an inventory of all city-owned properties.

And basically, they ended up forming a Atlanta Urban Development Corporation, which is a nonprofit subsidiary of Atlanta Housing.

And this group basically is tasked

with utilizing those funds to then develop affordable housing in the city.

All right, that concludes the end of asset monetization and concludes the end of our slide presentation.

Okay, Mr.

Yeah, President Payne, at this point it does appear that we've lost quorum, so the official meeting does need to end at this point.

We just made it to the end.

I think we can't do any more questions because we lost quorum, but if you have questions for our presenters, if you could just stick around for folks to come check in with you, that would be great.

Thank you, President Payne.

Before I adjourn the meeting, I'd like to thank you, particularly Councilmember Wonsley, the rest of the Council, Guidehouse, and LRO for moving the ball forward here and giving us this information.

Unfortunately, the Board of Estimate and Taxation was not able to achieve quorum today, and so I'll officially adjourn our March 25th meeting that was adjourned to today.