A point of discussion centered on the city’s property assessments, which are critical for determining tax obligations based on market values. The city assessor’s report detailed the assessment of 131,000 properties, with value notices having been mailed to property owners. These assessments, which are based on market transactions from October 2023 to September 2024, are vital for calculating taxes for the following year. The report highlighted a decrease in overall estimated market value to $64.8 billion, excluding utilities and railroads, and noted a 2.6% increase in market value despite a previous decline in residential values.

The accuracy of the assessments was emphasized, adhering to state standards for equity and fairness. The report also touched on the significant reduction in sales volumes since 2022, a 45% decline that impacts the reliability of assessment data. Additionally, there was concern about the uniformity of assessments, as highlighted by a discussion initiated by a commissioner about a constituent’s perception of unfairly high property assessments.

In a related discussion, the council examined property assessment appeals, focusing on localized issues in areas such as the Stinson Triangle. The council explored how staff conduct inspections and market analyses to address appeals, particularly for unique properties like historical ones that don’t fit standard residential models. The availability of a city website tool providing data on property records and sales was also discussed.

Financial concerns were another key focus. The city controller reported on fourth-quarter financials for 2024, noting a AAA bond rating despite shortfalls in property tax revenues and state aid. The controller highlighted that revenues finished about $40 million under budget, with expenditures also underspent by a similar amount, primarily due to delays in state aid and budgeted funds held in North Commons Park.

The council reviewed the city’s assets, mentioning an increase in value for the Target Center and Convention Center by about $9 million to $10 million since 2023. The self-insurance fund was below target due to increased liabilities, but cash balances rose by $10 million to about $275 million. The general fund remained stable with a balance of approximately $209 million, exceeding the target by $96 million. The council planned to use about $24 million to $25 million of the fund balance for the 2025 budget while also rolling over funds and addressing public safety aid restrictions.

The meeting also covered strategic fiscal planning, with discussions on how shifts in commercial and industrial tax contributions affect homeowners. The council addressed the impact of rising rents and the classification of new developments on the tax base, particularly in underserved areas. The potential for funds freed from convention center debt service to mitigate property tax increases was explored, and the need for an updated tort liability actuarial valuation was discussed.