Introduction

Minneapolis: As a city, we've come together, worked together, and learned together. We are continuing to navigate a generational, global pandemic. And throughout the last eighteen long months, our city has shown an unwavering commitment to one another. Compassion and a commitment to science have formed Minneapolis’ compass throughout this journey. And as the first city in Minnesota to issue masking requirements and apply targeted public health measures, Minneapolis has been leading throughout the pandemic. Our city-wide vaccination rate for adults is 87 percent. If you are among the 13 percent not yet vaccinated, please get the shot. This is about protecting the most vulnerable people in our community, including children and immunocompromised adults. This is about ensuring we continue making progress on our path to economic recovery.

Local restaurants and businesses have developed templates for innovative customer service and public health solutions that keep their employees safe. Every resident in every corner of this city has been impacted, but we know that those effects have not been felt evenly. And the commitment to help first those who need it most is an ethos I have seen roundly embraced, over and over again, by this extraordinary city.

This is the Minneapolis I know. We will rebound in excellent fashion. As we see playing out across the country today with the resurgent Delta variant, this long, grueling fight against the virus will continue to demand the best of us.

Affordable Housing

That's the case with any policy fight worth having. There are no shortcuts on the road to racial justice, no easy answers when it comes to our most pressing challenges. Our 2022 budget proposal paves the way for change with bold investments that build on recent accomplishments while committing to the long-term health and success of our city.

We’re outlining the coming year's recommended budget today at Lucy Laney Elementary School where these elements meet. When I launched Stable Homes Stable Schools in 2018, equitable outcomes guided our decisions every step of the way. Thanks to the support and collaboration of partners like Minneapolis Public Schools, educators, parents, Minneapolis Public Housing Authority, Hennepin County, nonprofit partners like the YMCA, and philanthropic partners like the Pohlad Family Foundation, we've helped prevent or end homelessness for thousands of children and their families, approximately 95 percent of whom are families of color.

And right here at Lucy Laney, we've helped provide safe and stable housing for over 200 children and their families. Stable Homes Stable Schools stands as a testament to the extraordinary affordable housing work we've undertaken… to what is achievable when our work is grounded in compassion… and what is possible when partners come together with the courage of their convictions, for the betterment of our city. Stable Homes has gone from pilot to permanent and is now a staple in our budgets in an ongoing way. Through

each of the last three budgets and our federal spending proposals, we have laid the foundation for a resilient, more equitable and inclusive housing future in Minneapolis.

We are not interested in talking points that sound good. We are about policy that does good. Between 2018 and 2020 we have built or preserved nearly 3,000 units of affordable rental housing, including 1,350 deeply affordable units. As a city, we have never done so much, so quickly for affordable housing.

When we took office, the annual rate at which we were building new deeply affordable housing — that's housing available to households earning 30 percent of the Area Median Income or below — was 41 units per year. This last year alone, we hit nearly seven times that figure with 273 new units. We've seized opportunity amid challenge and historic investments have produced historic results. We have stayed true to our values, and we are not letting up.

We're keeping this momentum going with a $28 million commitment to affordable housing work from our first round of Rescue Plan funding. Thanks to an unprecedented two-year investment of $35 million in the Affordable Housing Trust Fund in 2019 and 2020, over 400 more units have already closed in 2021, with over 75% of those units affordable at 30% AMI or below. And 1,500 more units have received funding awards for projects that are expected to close in this year or next. These investments won't show up as splashy change items in this year's budget. That's a good thing. We've worked hard to make these investments boring by making this funding an ongoing, permanent fixture in every Minneapolis budget going forward. In other words, it's not news now. It's a paradigm shift in how your local government approaches affordable housing and how our administration has fundamentally reshaped this City's approach to the budget.

We are making another $15 million investment in our affordable housing trust fund in 2022.

Over the past two years, we have also deepened our partnership with the Minneapolis Public Housing Authority, consistently coming to the table with resources to leverage additional funding to preserve, improve, and expand public housing. We funded major energy efficiency upgrades for the Elliot Towers renovation, the largest Public Housing redevelopment in our city's history. And that project is slated for completion - on-budget, on-schedule later this fall. That's good for our public housing stock and our climate action work. We've invested in badly needed safety improvements like fire sprinklers and are providing $4.6 million in Rescue Plan funding to support the re-development of approximately 16 sites into 84 deeply affordable public housing units. And today, we are proposing a $1 million, ongoing investment in our partnership with the Minneapolis Public Housing Authority to support new development and preservation initiatives in 2021 and beyond.

We are not going to sacrifice the progress we've made.

Budget Mechanics

We’ve been intentional, taking a measured and honest approach to keep the City on solid ground. When I delivered this speech last year, we were staring down a $156 million revenue shortfall. Since then, we've stabilized our finances and continued delivering core services. Has it been painful? Absolutely. Do I regret the decisions made? Absolutely not. We will emerge from the pandemic, on solid footing and well-prepared for transformation and change.

But here is our reality: More COVID cases equals fewer small businesses open. More COVID cases equals fewer events and celebrations. And it follows, fewer events and celebrations, fewer businesses open means lower revenues for our city. Our plan helps insulate property taxes from massive spikes that could result from fluctuations in revenues driven by COVID cases. We do that by assuming a cautious approach as to how quickly we can count on funding streams.

Throughout the pandemic, our City staff have needed to do more with less. The work for so many has gone beyond anything in their job description. So to everyone working for this local government, whether you’re seated at a desk in City Hall or the Public Service Building, running COVID testing and vaccination clinics with

the Health Department, out in the field with Reg Services or Public Works, or serving as a first responder: THANK YOU.

As we continue our work to combat the Delta variant, we must fill the staff positions that have been lost, either through attrition or a hiring freeze. Just to maintain our current service levels, we would have been confronting a $34 million gap in 2022. That shortfall grows to $47 million when we factor in the need to bring back staff and make strategic programmatic investments. Looking further down the road, we're anticipating shortfalls of $37 million and $34 million in 2023 and 2024, respectively.

This budget features a plan to allocate $120 million in federal relief funding over three years to bridge those gaps, ensure we aren't confronted with a huge property tax increase now or in future years, and most importantly — help our city recover. We have done everything possible to help ensure that the measures we are taking won't burden those who have been disproportionately impacted over the last year and a half. Property taxes are inherently regressive, and, with property values rising quicker on the Northside than the rest of our city, we're investing with an eye toward our short and long-term priorities. We have made it a priority to curb property tax increases not just this year but for years to come. I'm recommending a 5.45 percent levy increase for 2022.

Accountability

These measures represent the building blocks for effective local government, and for fostering greater trust in our institutions.

Following the murder of George Floyd, Minneapolis became ground zero in the debate around the future of public safety — and a case study in the dangers of grand pronouncements with little planning. Communities of Color in Minneapolis have demanded change of the highest order — to the structural barriers that were deliberately designed … that have for generations shut down meaningful reform … overtly hamstrung accountability — and done lasting harm to community trust. Locally, we've worked to keep the focus where it belongs.

Chief Arradondo and I have moved forward with over a dozen policy reforms since last June, going even further than we or any Minnesota department has in creating a more just and accountable system of community safety. We're finalizing another series of reforms, slated to take effect in the coming weeks.

MPD will no longer be conducting traffic stops solely for offenses such as expired tabs, an item dangling from a mirror, or not having a working license plate light. And the City Attorney's Office will stop prosecuting tickets for driving after suspension when the only basis for the suspension was a failure to pay fines or fees and there was no accident or other egregious driving behavior that would impact public safety.

As part of this budget proposal, we're setting out to further strengthen the internal disciplinary processes in Minneapolis. We have repeatedly called for state lawmakers to make targeted changes to the arbitration process, which would in turn allow local governments to make the most meaningful changes possible in their police departments: terminating bad cops for bad behavior, like egregious use of force or falsifying official documents. In the meantime, we must continue doing everything within our power to further instill accountability.

Earlier this year, we embedded an Assistant City Attorney in the investigative process. The goal was straightforward: further enhance the integrity of disciplinary investigations themselves by working with our excellent Civil Rights team.

We are throwing our weight behind good internal disciplinary processes because a disciplinary decision should never be overturned by an arbitrator due to an internal shortcoming. We will be adding two new attorneys to ensure that the work continues in full, one for ongoing support within MPD and the second to

review MPD trainings. We are also proposing an additional, full-time body camera analyst for our Office of Police Conduct Review to help ensure they have the tools they need to continue serving community.

Accountability from the MPD is a non-negotiable, and these investments reflect another significant commitment to exactly that. But we also should not be afraid to acknowledge the difficulty of the work law enforcement does. Last year, our proposal for an early intervention system — an investment deeply supported by the family of George Floyd — was cut by the City Council. To build a better department, we need to better understand the state of the department and the people serving in it. With a state-of-the-art early intervention system, we can ensure supervisors and department leadership have access to real-time data that help inform when an officer may need additional support — or when they're no longer fit to serve. That's why we're proposing $500,000 in up front funding to bring this technology to Minneapolis and $250,000 in ongoing funding to keep it running here.

But community safety isn't relegated to policing.

Community Safety

That commitment has been baked into every single one of my budgets and our first Rescue Plan proposal that centered affordable housing and inclusive economic development work with nearly $100 million in new investments. We have built up new, alternative safety responses, invested record amounts in affordable housing production, and put economic inclusion into action with vehicles for investment that are actually precise and explicit in who benefits from that investment. When our administration created the Office of Violence Prevention in 2019, it was funded at $3.5 million per year.

Today, OVP is receiving $7.8 million in ongoing funding, that's in addition to several million through the Rescue Plan funding proposal. Our budget includes major investments in youth recreation and programming and another $500,000 proposal for proactive youth-specific violence prevention work in this year's budget. We are continuing to work closely with Director Sasha Cotton to thoughtfully scale her work and support her team while ensuring that our new ecosystem of public safety solutions is working in harmony as it grows.

We are poised to increase capacity for the successful restorative justice and diversion work with an additional $350,000 ongoing commitment to the City's Strategic Justice Initiatives. And we will become the first city in Minnesota to fund new work in coordination with the State's Missing and Murdered Indigenous Relatives Office. This cross-jurisdictional work is overdue and a welcome addition to how we support the Native community.

This budget also builds on the work we've done to address the opioid epidemic and support neighbors experiencing addiction. We are proposing funding for a physical space where we can help break cycles of addiction — somewhere that isn't an Emergency Room or police station — where people are simply welcomed and supported by those with the experience and relationships that matter.

Policing and MPD

It would be disingenuous to expect these new, complimentary programs to succeed simply by breaking down the work of others. Sadly, we've seen a willingness to do exactly that over the last several years when it comes to the work Chief Arradondo is leading. If we're serious about enacting systemic change, we need to have this conversation in honest terms.

My 2022 budget proposal features new funding for the recruit classes we will need for both core public safety work and culture change by bringing in the type of community-oriented officers who the vast majority of Minneapolis residents want to see serve. Since taking office, I have offered an honest approach for what a better, more just police department looks like. And now, more than ever, we need to focus on what is right.

Crime in Minneapolis is not felt evenly. I've met extensively with Black and brown residents, small business owners, and staff on the Northside, along Lake Street, and all across our city. While no community is a monolith, the message we are hearing is clear: they want cops to be more present, more accountable, and more community-minded. And they support our Chief's work. Roughly 85 percent of gun violence victims in Minneapolis are Black.

As we've seen, crime is both caused by deep-seeded inequities and an accelerant of them. There are Minneapolis neighborhoods where lives and livelihoods are threatened, where you don't have the privilege of philosophizing over some ideal. They need justice, accountability, and, yes, safety in their neighborhoods — right now.

Public safety experts continue to broadly agree that in a case like ours, with a diminished number of officers per capita, the data backs more and better — not more aggressive — policing as key in driving down violent crime. We also know that among the surest ways to deliver justice for victims of crime while establishing a deterrent is by solving violent crime. Again, experts agree there: successful investigations rest largely on investigative time and resources.

These are not matters of opinion. These are conclusions supported by data and thought leaders across the country.

Presently, we have roughly 600 active sworn officers, creating an unacceptably low officer per capita ratio in Minneapolis, putting us dramatically behind our counterparts in St. Paul, Milwaukee, and Kansas City.

Through this budget, we are continuing the hard work of addressing this shortage and rebuilding the department. We have pressed the MPD to accelerate recruitment efforts with expanded recruit classes and we are pushing to move up to 150 new recruits and cadets through the academy next year.

We are doing everything in our power to add new officers, and these five classes in 2022 will be essential to helping offset the major attrition we've experienced. And as we bring in new personnel, we are taking steps to help ensure we have the right people serving as Field Training Officers, police tasked with onboarding and training new recruits. This budget includes incentive pay for officers who assume this vital role. We've also outlined a path that restores the MPD to its full sworn compliment of 888 officers by 2024.

Inclusive Growth and Transformation

As we continue the hard work of deep, structural change and creating safer communities; we're applying pressure and moving with resolve toward economic inclusion, wealth generation for Minneapolis BIPOC communities, and explicitly pushing back on a long, uninterrupted history of anti-Blackness. We launched the Commercial Property Development Fund two budgets ago, noting that communities of color have historically and systemically been locked out of the basic ownership opportunities and the ability to build generational wealth.

Over the last two years my team has steered $18 million to this fund that prioritizes investment in communities that have historically been denied it. The Commercial Property Development Fund offered a new approach for a city that has for too long been too comfortable relying on surface-level policymaking. This source of patient capital is making true ownership possible. Since its inception and funding, we have approved eight loans for a total of $4 million. These eight loans leverage approximately $20 million in private financing. Three of the loans have closed with construction having begun on these projects. And there is a full pipeline of exciting projects that will come to fruition over the next year. These are real concrete results when it comes to equity in economic development.

Entrepreneurs like Kenya McKnight-Ahad and Houston White, and many others, will have the space and opportunity to grow and serve more Minneapolis residents. This budget also honors the work of our local, multi-jurisdictional partners and takes into account the damage that the pandemic has done to some of our most important programming, specifically for young residents.

Youth Programming & Climate Action

I began my term highlighting a passion I've had from the beginning of my political career, stating housing is a right and funding it at record levels. And while that commitment to affordable housing won't change, we're capping the term with another passion of mine dating back to the early stages of my life: youth recreation.

The impact youth recreation, and specifically, kids' track and field had on me cannot be overstated. The impact of recreation on youth throughout our city, especially lower income students, is more than a smart budget allocation — it is critical to a well-functioning society. When our youth have no access to safe, healthy outlets, they are often left with dangerous ones. The basic seeds of opportunity, cooperation, and community are sowed not through an absence of activity but a surplus of it.

For years now, we have been working towards a comprehensive strategy for funding a park and recreation board that lives up to the second half of its name. So this year, we partnered to create a long-standing impact for our future by adding new funding for youth recreation to the tune of $2.6 million, supporting programming, supervision, and quite simply a lot of great things to do in our parks. That funding will go toward 12 full-time staff to develop programs and engage young Minneapolis residents. It will go toward 7 staff to manage the Creation Spaces program, and it will support additional green workforce development.

Some will question the wisdom in stepping up this funding as we climb out of a budget crisis. But I would question the wisdom of failing to invest in our future when our future is upon us now. The recent report on climate change from the United Nations made as much clear. Deferred maintenance isn't an option. We've got to act locally and advocate globally.

We have implemented a social cost of Carbon for Minneapolis, dedicated the city to a goal of 100 percent renewable by 2023 in all municipal buildings — and we're going to put more backing behind our Rebuild Resilient program. Rebuild Resilient has already helped small businesses throughout the city make energy upgrades. This initiative is a shining example of smart climate policy intersecting sound economic development work, and we're investing another $500,000 in it moving forward.

Conclusion

Finally, I want to extend my deep appreciation for our city staff, led by an exceptional crew of department and division heads. The entire city should know how important your leadership has been over this last year-and-a-half. Through great difficulty, you've helped hold our city together. We are grateful for your leadership, your talent, and abiding commitment to our residents… to the community who depends on you.

Minneapolis has demonstrated with unflinching clarity that we are ready to not just think but to act bigger than we ever have. Minneapolis has shown the world that transformation and change are attainable. No matter the challenge, we've stayed committed to our core values and to our community. As a local government and as a city, we've done the hard work. And we've looked out for one another. Amid a sea of change, that will remain a constant in the city of Minneapolis.

Thank you.