MINNEAPOLIS (FOX 9) - A new phase of the 2020 budget proposal for the city of Minneapolis from Mayor Jacob Frey uses spending freezes, use of cash reserves, program cuts and furloughs in an effort to address $97.8 million in revenue losses caused by the COVID-19 pandemic.
“This unprecedented time calls for an unprecedented approach to our budget," Frey said Thursday.
Phase 2 of the budget proposal, released Thursday, will help the city avoid mass layoffs and continue the “core” and “essential” work of preserving housing, economic development and racial equity work, the Mayor said.
“It would be fiscally irresponsible to use all of our ‘rainy day’ funds now,” Frey said. “We are in the very early stages of what promises to be a long flood, and this work will remain ongoing.”
Other funds the city could use to help offset the COVID-19 revenue losses have also been affected by the pandemic.
“Now, with fewer people traveling downtown from across the state, fewer people are parking," Frey said. "So our parking fund is diminished. Fewer people are using water so our utility fund is depleted.”
The proposal includes city employee furloughs the Mayor says won’t exceed six days between August and the end of the year. Most employees will be furloughed for fewer than six days.
The Mayor will take a pay cut equivalent to the percentage of pay lost by the greatest number of furlough days.
Phase 1 of the new budget proposal has saved $58.2 million to date through hiring freezes, wage freezes, delaying IT and city fleet upgrades, discretionary spending freezes and a 15 percent cut to contract spending.
Friday, the city’s budget director will provide an overview of the budget to the City Council, which will hold its first budget public hearing July 14. The Council will markup the budget July 17 and hold another public hearing July 22. The Council will vote to adopt the budget after another markup July 24.