Local Government Aid and Budget by Fund Type
Local Government Aid (LGA)
The City of Minneapolis is certified to recieve $78.3 million. Of this amount, the City plans to allocate $68.8 million for its General Fund, $9.2 million to the Park Board, and the remaining $0.2 million to the Municipal Building Commission (MBC). The table below shows the historical certified and actual LGA amounts, as well as the certified LGA levels for 2022 based on current law.
Budget by fund
The City uses different funds to account for expense and revenue associated with the various services provided. The General Fund, where the City accounts for most property tax supported services, represents 37 percent of the 2022 Council Adopted Budget, an increase from 33 percent in the 2021 budget.
Special Revenue Funds are used for personnel costs, operating costs, contractual services and equipment that are funded by specific revenue sources. Special revenue funds support the convention center, health and family support, public safety, Federal, State and local grants and ongoing support of closed pension funds.
Capital Project Funds include permanent improvement and arbitrage funds and are used for the construction of infrastructure projects.
Debt Service Funds are used to pay interest and principal on City debt. For more detail on the debt service plans, review their annual presentation.
Internal Services Funds are used to account for business-like services that the City provides to other City departments. Internal services include information technology, equipment (e.g. police squad cars, fire equipment, and other rolling stock), property services, tort claims, and workers compensation claims.
Enterprise Funds include services that the City provides that operate like a “business” - similar to internal service funds but with external customers. Charges for services are expected to recover operating costs, indirect costs, capital investments, and interest expense. Utility rates are set with the intent of funding these costs. Enterprise services of the City include sanitary sewer services, storm water management and flood mitigation, water treatment and distribution, solid waste and recycling, and parking.
Expense and revenue by fund type
Expense by fund type
(Interfund transfers and independent boards are excluded)
Revenue by fund type
(Interfund transfers and independent boards are excluded)
Expense
Revenue
Expense by category
(excludes independent boards and interfund transfers)
Total City Budget - expenditure by categories
2022 Council Adopted Budget: $1.57 billion
Funding for pension liabilities
The City’s property tax levies for its closed pension funds that have been merged into the Minnesota State Public Employees’ Retirement Association (PERA) for 2022 total $14.8 million, held constant from the 2021 adopted budget. This constant payment is reflective of State action in the 2019 legislative session to restore MERF funding support. The three merged funds include:
- The Minneapolis Employee’s Retirement Fund (MERF) Division of PERA – fully merged in 2015.
- The Former Minneapolis Police Relief Association (MPRA), a closed fund.
- The Former Minneapolis Fire Relief Association (MFRA), a closed fund.
Teacher’s Retirement Association (TRA)
The 2006 Legislative session combined the Minneapolis Teachers Retirement Fund Association (MTRA) with the State’s Teachers Retirement Association (TRA). As part of the legislation, the City was required to redirect its annual $2.25 million MTRA tax levy to TRA through 2037. State law changed the $2.25 million City levy to a $2.25 million contribution in 2012. This change increased the total levy for this purpose as the City previously contributed its net TRA levy collection, which was less than $2.25 million because the City does not collect 100 percent of its levy. For 2022, the City will levy $2.3 million for TRA to insure that net collections provide the $2.25 million. For the purpose of long-term planning, it is anticipated that these costs will remain constant and end by 2040.
Public Employees Retirement Association (PERA), the plan for most current City employees
The employers’ contribution level in PERA’s Coordinated Plan for 2022 is 7.5 percent, and the PERA’s Police and Fire Plans’ employer’s contribution remains at 16.95 percent, both same as in 2021. The estimated total cost of contributions to PERA for the City exclusive of its independent boards for 2022 is $37.6 million, which is covered in the budgets of the departments in which the employees work.
Growth in personnel costs
Personnel changes. The 2022 Council Adopted Budget increases the Full-Time Equivalent (FTE) count of City positions by 143 from the 2021 Adopted Budget, exclusive of the City’s independent boards, from 3,960 to 4,104 FTEs as the City begins its recovery from the COVID-19 pandemic. All departments that made spending cuts in 2021 are adding back to their core services in the Council Adopted Budget, though total FTEs Citywide remain below their pre-pandemic levels of 4,273.
Salary and wages. The 2022 Council Adopted Budget includes an increase in personnel expenditures ($358 million in salaries and wages, compared to a 2021 total of $332 million), excluding the City's independent boards.
Fringe benefits. Budgeted expenditures for all fringe benefits are increasing from $138 million in 2021 to $154 million in 2022, exclusive of the City’s independent boards. This is a reflection of adding FTEs to the City's workforce as well as increased payments into the Workers' Compensation Fund by 27 percent. This is driven by increased actual and projected spending out of the Workers' Compensation Fund in 2020 through 2022.
Elected official compensation. The Council set the annual salary for the Mayor for the 2022-2025 term and for Council Members for the 2022-2023 term as part of the salary schedule adopted on December 8, 2021 pursuant to Resolution 2021R-386. The salary schedule for the Mayor and Council Members for the terms set to commence on January 3, 2022, shall be increased by one and a half percent (1.5%) to begin with the first pay period in January 2022; and shall be increased by two percent (2%) each subsequent year of the elective terms.