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City controller warns General Fund footing is narrowing as 2025 books close
Summary
City Controller George Hargrove and Deputy Controller Rob Lange told the Minneapolis Budget Committee that the city's nongeneral funds held up in 2025 but the General Fund fell from about $209 million to roughly $140 million, is only slightly above the 17% minimum, and is forecast to drop further in 2026 absent changes.
City Controller George Hargrove told the Minneapolis Budget Committee on May 4 that the city finished 2025 with a mixed picture: "Our nongeneral fund is actually, I think, doing quite well in most areas," he said, but he cautioned that "the General Fund ... is starting to approach its minimum balance requirements." Hargrove said the fourth-quarter report is a point-in-time accounting while auditors complete final adjustments and that the Annual Comprehensive Report will provide final numbers later in June.
Deputy Controller Rob Lange walked members through the General Fund drivers. He said the city began 2025 with about $209 million in fund balance and ended the year near $140 million, a decrease of roughly $68 million. Lange noted the council's minimum policy requires about $109 million (17 percent of the fund), and staff's forecast presented to the committee showed the projected year-end balance for 2026 could be about $87 million if current trends continue.
Officials said two main forces pushed the fund downward: lower-than-budgeted revenues (notably a property-tax shortfall) and larger-than-expected public-safety spending. Hargrove and Lange reported that property taxes were roughly $19 million under budget in 2025, sales-tax revenues were essentially flat year-over-year, and transfers into the General Fund declined, contributing to a near-term cash decrease. They also called out sizable overages in public-safety budgets: police and fire were two of the largest contributors to the spend-down in 2025, and the controller's materials separately called out $5.7 million in unbudgeted settlement costs charged to multiple departments.
Lange emphasized the forecast is sensitive to year-end audit adjustments and one-time items. "It's a point-in-time report," he said, urging council members that 2026 decisions should take the final audited numbers into account when they become available.
Council members pressed staff about the drivers and requested follow-up detail. Council Member Wonsley asked for a department-level reconciliation of settlement-related costs after staff acknowledged an earlier summary figure required correction; staff said they would provide a detailed breakout of the $5.7 million total and the portion attributable to the police department. Other members pressed staff on options to address persistent public-safety overtime and the implications for future budgets and rollovers.
The committee filed the report for the record and directed administrative follow-ups on settlement accounting and department-specific forecasts.
