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Minneapolis Q3 report flags $67M general‑fund drawdown and a near $20M police overspend
Summary
Controller and finance staff told the Budget Committee that the city projects a roughly $67 million year‑over‑year use of general fund cash and that public safety — chiefly police overtime and recent hiring — is driving a projected $19.5 million overspend; council members requested follow‑up memos on collections, litigation reserves and staffing costs.
The Minneapolis Budget Committee on Monday heard a detailed third‑quarter financial status report showing the city expects a significant drawdown of the general fund and has a sizable projected overspend in public safety budgets.
City Controller George Hargrove said the period‑9, point‑in‑time report (unaudited) shows an expected general fund cash position of about $166 million at year‑end, down from $234 million a year earlier — a projected use of roughly $67 million. Hargrove flagged several revenue pressures, including property‑tax collections running below assumptions (about $17.5 million under budget), and softer downtown receipts tied to sales and hospitality taxes.
Deputy Controller Robert Lang walked the committee through fund‑balance details and said the quarter‑end projection left roughly $9.5 million in unassigned general‑fund balance after restrictions and commitments. "Year‑end 2025 balance for the cash is projected to be $166,000,000 in the general fund," Lang said.
Officials identified public safety as a primary expenditure driver. The report showed the police department projecting a multi‑million overspend largely tied to payroll: settlement costs and contractual back pay contributed, but the largest share reflected a surge in hiring — staff said the department brought on roughly 174 new sworn positions or trainees this year, many of which raised near‑term payroll and training costs without immediately increasing full‑duty patrol strength. MPD finance staff reported critical staffing overtime (CSOT) was about $16.5 million in 2025, and total overtime plus CSOT ran near $31 million for the year.
Council members pressed staff for follow‑up detail. Council member Cashman asked how the shortfalls could affect the city’s AAA bond rating; staff said they had begun internal process changes and would provide memos on the composition of the tax shortfall and the drivers of the police overspend. Council member Wansley asked whether anticipated legal claims were included in the self‑insurance forecast; staff said they estimate known claims with the city attorney’s office but detailed case exposures are privileged and may require closed‑session review.
Where this goes next: The committee filed the report and requested follow‑up memos with itemized breakdowns — including the county’s accounting of court‑ordered property‑tax adjustments, a detailed overtime and back‑pay accounting from MPD, and a staff memo on what is being factored into the self‑insurance liability estimate — ahead of continued budget markup this week.
