Allen E. Hoppe, CFA, CTP, Director - Banking, Investments and Debt
Minneapolis, MN
Minneapolis, MN
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Mayor Jacob Frey joined City Council Member LaTrisha Vetaw and local community leaders to celebrate the official signing ceremony for the Community Performing Arts Center, marking a major milestone in the Upper Harbor Terminal redevelopment on the Northside.
The 8,000-seat concert venue will be operated by the legendary Minneapolis nightclub First Avenue and the Minnesota Orchestra. The venue is expected to host around 50 ticketed events each year, with $3 in proceeds from each sale reinvested directly into the local community through a partnership with the African American Community Development Corporation (AACDC).
“Imagine a warm summer night in Minneapolis, sitting by the river, watching your favorite band play live at a state-of-the-art venue—that’s what we’re delivering to the Northside,” said Mayor Frey. “The Community Performing Arts Center is a generational investment. Not only does it bring jobs and tourism to the community, with our partners at First Avenue and the Minnesota Orchestra committed to reinvesting revenue back into North Minneapolis, it brings real change.”
“The Upper Harbor Terminal is more than a development, it’s a long-term investment in North Minneapolis,” said Council Member LaTrisha Vetaw. “This project creates real jobs, builds community wealth, and opens doors for residents who have historically been left out of major economic opportunities. I am proud to help bring this vision to life and ensure that Northside families benefit from every phase of this project.”
The AACDC will manage and distribute funds generated from commercial ticketed sales at the Community Performing Arts Center, reinvesting revenue into social, cultural, and economic initiatives on the Northside. The Minnesota Orchestra has put together a fundraising coalition to raise private funds to support the building of the amphitheater. When the venue is complete, the Orchestra will play both a performance role—playing at the venue each season—and an operational one, working alongside First Avenue on the venue’s long-term oversight.
“This milestone is the result of countless hours of community planning, co-creation, and dedicated neighborhood input,” said Dayna Frank, President and CEO of First Avenue Productions. “We are honored to be a part of such an incredible project and look forward to building a world-class, inviting, boutique urban amphitheater on the Mississippi riverfront. Thank you to the State of Minnesota, the City of Minneapolis, our partners at the Minnesota Orchestra and AACDC, and the hundreds of Northside community members who contributed ideas to make this project truly special. We are thrilled to be moving forward and building a cherished community asset to be enjoyed for generations to come.”
“The Orchestra is proud to partner with First Avenue, another home-grown music organization, and the AACDC to expand the musical footprint of Minneapolis with this beautiful outdoor amphitheater,” said Minnesota Orchestra Board Chair Nancy Lindahl. “We are grateful to the Mayor and City of Minneapolis for their support and to the coalition of generous funders who rallied together to make this vision a reality. These private individuals were drawn to support the project because of a shared belief in the important role music, the Orchestra and the arts can play in strengthening our City, and we now look forward to seeing this come to life along the riverfront for audiences for decades to come.”
In addition to world-class musical acts, the amphitheater will also host year-round community programming in public spaces, with a strong focus on including Northside residents, businesses and organizations. Construction of the Community Performing Arts Center will create more than 500 jobs, and once completed, amphitheater operations will employ more than 250 people.
"We are thrilled to reach this milestone in our journey — excited to collaborate with the community and this incredible team to bring year-round programming, public art, career paths, and local vendor opportunities to life," said AACDC Board Chair Keith Baker. "Can’t wait to see years of community planning become a vibrant reality."
The Upper Harbor Terminal, a 48-acre riverfront site off Dowling Ave. N and I-94, is currently being redeveloped by the City in partnership with the Minneapolis Parks and Recreation Board and a group of local developers with additional investments from the State of Minnesota and the federal government.
The $350 million investment—including $20 million from the City—reconnects North Minneapolis to the Mississippi River and will include affordable housing, a health and wellness hub, 20 acres of riverside parkland, hundreds of new living-wage jobs, and more. Infrastructure work was completed at the site last summer, with construction set to begin this fall. The amphitheater will begin hosting events for the 2027 concert season.
Today, the City of Minneapolis announced $700,000 in funding to empower local artists, creative entrepreneurs, community place makers, and cultural organizations working to enhance community and quality of life through culture and creativity . In total, the 2025 Cultural District Arts Fund will grant 65 awards across the city’s seven cultural districts.
“Minneapolis is a city where culture, creativity, and community go hand in hand—and the Cultural District Arts Fund is proof of that,” said Mayor Jacob Frey. “From dance and storytelling to puppetry and public art, these 65 projects reflect the best of who we are. Thank you to our Arts Department for finding unique ways to bring the arts to life in every corner of our city.”
“Minneapolis thrives on the energy of its vibrant creative community, and this fund represents the City’s commitment to empowering artists and initiatives that are shaping a brighter, more inspired future for all who call this city home.” said Ben Johnson, Director of Arts & Cultural Affairs.
A dynamic portfolio of art projects is supported by this fund, including funding for new/existing festivals, cultural venues/spaces, supporting pop-up projects and creative activations. The 65 selected projects will showcase a vibrant tapestry of community engagement, artistic expression, and cultural celebration across the seven Minneapolis Cultural Districts: Lowry Avenue North, 38th Street, Cedar Avenue South, Central Avenue, East Lake Street, Franklin Avenue East, and West Broadway.
Highlights of the funded projects include:
38th Street Projects: Dance and music performances blending cross-cultural partnerships, hands-on iron-casting workshops, piñata parties, sauna rituals, and storytelling-based workshops focused on trust and healing.
Cedar Avenue South: Innovative performances combining shadow puppets with live music. Afghan and Somali Heritage Celebrations through workshops, concerts, and youth art & fashion.
Central Avenue Projects: Music gatherings at Dutch Bar, art market, sci-fi/fantasy arts convention, and Chinese folk demonstrations. Creative workshops include beading, crafts, poetry and writing month.
East Lake Street Projects: Community involvement in Urban Art Village and winter festival builds, bilingual puppet shows, live choral music performances, and miniature Brazilian puppetry.
Franklin Avenue East Projects: Large-scale gathering with art-making activities for families. Native traditional arts workshops, cultural storytelling, and civic engagement events.
Lowry Avenue North Projects: Placemaking & Public Art including sculptural installations, pop-up music festivals, and open mic series supporting local creativity.
West Broadway Projects: Showcasing immersive theater performances, youth programming, film screenings and participatory dancing events promoting health and community.
A full list of award recipients can be found on the fund's website.
The Arts & Cultural Affairs Department exists to advance, support, stimulate, and promote a diverse and active arts and cultural environment that recognizes and draws on the full potential of Minneapolis’ artists and arts organizations, reflects, and responds to civic concerns and aspirations, and enriches the lives of all people who live in, work in and visit Minneapolis. More information about the department’s work can be found on the Arts & Cultural affairs website.
The City of Minneapolis’ finance team has been awarded the “Distinguished Budget Presentation Award” and a certificate of achievement for “Excellence in Financial Reporting” by the Government Finance Officers Association (GFOA), the leading organization for municipal finance experts. The awards honor the team’s commitment to financial excellence, transparency and responsible planning.
“These awards specifically speak to the rigor of the Annual Budget Process, and Financial Reports which are accessible to all residents. That’s something our community deserves and expects. You shouldn’t have to be a financial professional to understand the city’s budget,” said Dushani Dye, Chief Financial Officer for the City of Minneapolis. “It also means so much to us because these awards are from our financial peers. This organization is the gold standard in government finance, and we’re honored to be recognized.”
Requirements for the awards change annually, and the GFOA gave credit to the City’s team for the ability to pivot where needed to consistently make improvements to the City’s budget systems. The organization provides comments that budget leaders say help refine processes and documents in the coming years.
The GFOA called the certificate of achievement in particular the “highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.” The City has received this award for 50 years consecutively.
The next meetings of the Capital Long-Range Improvement Committee (CLIC) are June 18 and 25. The group of residents and businesses advises the City on its six-year capital improvement plan. See the calendar of upcoming committee meetings or previous agendas and minutes.
The mayor’s office and the Finance Department are in the process of developing the 2026 Mayor’s Recommended Budget. The mayor’s budget address is scheduled for mid-August, with several public meetings to follow.
There are several ways to stay informed on the budget process. The budget team will participate in several events around the City, like the Juneteenth Celebration of Freedom at Bethune Park this weekend. There will be interactive activities to learn the basics of the budgeting process, along with take-home materials.
Only two cities in the United States can boast about being among the happiest in the world. According to the Institute for Quality of Life’s 2025 Happy City Index, Minneapolis is one of them. The Institute ranks 200 of the globe’s most joyful cities in gold, silver and bronze categories based on several factors like strong economies, inclusive policies, climate initiatives and more.
“Of course Minneapolis is one of the happiest cities in the world—that’s no surprise to those of us who call it home,” said Mayor Jacob Frey. “Where else can you launch a startup in the morning, bike the Chain of Lakes at lunch and catch a game or a show at night? We’ve got big-city energy with backyard access to nature, and that makes life here pretty hard to beat.”
Being happy is more than just a smile on the street or a friendly neighbor. The Happy Index, as it turns out, is quite serious. Ranked 30th out of the gold category’s 31 worldwide cities, 150 independent researchers worked since August to judge Minneapolis on six robust rubrics that essentially lead right back to happy people:
Education & Innovation – The Index touts the honor that 25 percent of Minneapolis residents hold master’s degrees, and 20 percent are considered proficient in at least one foreign language, contributing to a “diverse and globally connected workforce” and community.
Governance & Transparency – Minneapolis is once again praised for its high voter turnout in local elections, including this past November’s races. The Index also applauds the convenience and efficiency of the City’s e-services like online payments and appointment scheduling.
Health & Well-Being: Minneapolis can be proud of its long life expectancies and 92 percent medical insurance coverage rates. City residents might also be happy to know we have some of the more robust mental health initiatives in the world.
Mobility & Transport: The Happy City Index also hails the “highly developed,” safe and efficient public transportation system.
Environment & Sustainability: Researchers confirmed that Minneapolis’ environmental efforts are a priority for its residents in terms of air quality, efficient electricity usage and renewable energy. The Index also lauds our beautiful City parks.
Economy & Business: Minneapolis is an “attractive destination for professionals and entrepreneurs alike” thanks for the 474 businesses per 1,000 residents – and the low unemployment rate.
“Every year has its highs and lows, and the past year was no exception – from debates related to AI (artificial intelligence) to various hot and cold conflicts…and aftershocks of the pandemic,” the Index cited. “Minneapolis is a thriving urban center. The economy…is robust and business friendly. Local governments have a direct and significant impact on people’s everyday lives and, consequently, their happiness.”
The top five happiest cities in the world, in order, are Copenhagen, Zurich, Singapore, Aarhus and Antwerp.
Mayor Jacob Frey announced his priorities for 2025, laying out a progressive agenda that will drive the City's policy and budget decisions. The priorities build on the work already underway and focus on key areas that will shape Minneapolis’ future: building out a comprehensive safety ecosystem, expanding affordable housing, creating economic opportunities, advancing climate action, and ensuring good governance. These priorities aren’t just about policy—they reflect a commitment to building a Minneapolis that’s stronger, more equitable, and more sustainable for everyone.
"Our vision for 2025 is clear: provide the most important City services with excellence,” said Mayor Jacob Frey. "We want to see safe streets, affordable housing, good paying jobs, and equal access to opportunity regardless of zip code.”
“Setting priorities for the City is a roadmap for the work ahead. It provides the strategic direction for City staff to dig in and work on behalf of Minneapolis residents,” said City Operations Officer Margaret Anderson Kelliher. “Doing the work of the City is like running a well-oiled machine. When we all work together for the good of the City, that’s when real change happens. We appreciate Mayor Frey setting the tone for 2025 and beyond.”
“The Office of Community Safety’s vision of a safer Minneapolis is aligned with Mayor Frey’s priorities,” said Community Safety Commissioner Toddrick Barnette. “We have generated significant momentum in our first responder recruiting efforts and continue to build out the foundation of our expanded response services through the Safe and Thriving Communities plan. We are fully engaged in the work laid out by the MDHR Settlement Agreement and while there is much to be done, we are committed to delivering the community safety ecosystem that our community expects and deserves.”
“The City is committed to the important work of police reform and building upon efforts that have already been implemented in the Minneapolis Police Department,” said City Attorney Kristyn Anderson. “The community has spoken loud and clear that this is a priority for the City not just for this year, but for years to come.”
The City of Minneapolis has unveiled a draft Development Framework for the highly anticipated New Nicollet Redevelopment project, guided by input from thousands of community members. Through 14 in-person and virtual events, 2,245 survey responses, and 520 in-person interactions, the community’s voice is represented and shaping every aspect of this project.
During an open house at Whittier International Elementary School, the project team celebrated the public’s engagement and shared a bold vision for transforming the former Kmart site into a thriving hub of green space, a variety of housing options, and small business opportunities.
“Reconnecting Nicollet Ave. has been a decades-in-the-making vision, and we are going to get it done right,” said Mayor Jacob Frey. “For far too long, this space has separated our communities rather than united them, and this community-driven process is bringing them back together. Opening it up with people, a park, and public realm improvements will drive life into a place that everyone will want to be.”
The New Nicollet Redevelopment site spans 10 acres of land between the Midtown Greenway trail, Lake Street, First Avenue and Blaisdell Avenue. The City's plan includes the reconnection of Nicollet Avenue and creates more opportunity for
“Residents are at the center of the New Nicollet Redevelopment project, which is a generational investment in our community. Thousands of residents have offered their feedback as part of the extensive community engagement guiding the project,” said Minneapolis City Council Vice President Aisha Chughtai. “I’m committed to ensuring impacted residents have a seat at the table and their vision guides every decision in this development.”
A few of the top resident priorities emerging from community engagement include enhanced public spaces, a variety of housing choices for households at all income levels and a new grocery store.
"Whittier Alliance has been thrilled to partner with the City and other local community organizations to drive community engagement on this project. We know that effective planning happens when community members' voices are heard,” said Anna Schmitz, executive director of Whittier Alliance. “It's exciting to see the results of that engagement in this Development Framework--and, crucially, we know that engagement work can't stop here. We look forward to continuing to bring community members to the table as this project continues to move forward."
"The New Nicollet Redevelopment is a testament to the power of inclusive, community-driven planning. Thanks to the dedication of our planning staff and the thousands of residents who shared their ideas, we are creating a vision that reflects the needs and aspirations of the people who live and work in this area,” said Community Planning and Economic Development Director Erik Hansen. “This project will bring new housing, green space, and economic opportunity to the heart of Minneapolis, and we are excited to continue this work together."
The project team will seek approval of the Development Framework from City Council and the mayor this spring. Construction on Nicollet Avenue is expected to begin later this year.
Minneapolis reached a major milestone in 2024, surpassing $1 billion in construction value for the 14th year in a row. The impressive total reflects the city’s continued growth and residents’ confidence in Minneapolis as a place to live, invest and build.
At a news conference Tuesday, Mayor Jacob Frey – flanked by Council President Elliott Payne, Council Member Jamal Osman, City leaders and development representatives – said the numbers signify how much people believe in Minneapolis’ future and are committed to making it stronger.
"No matter the scale or scope of the project, these numbers speak volumes: people trust Minneapolis. They see it as a city of opportunity, a city worth building in, and a city worth building on,” said Mayor Jacob Frey. "Surpassing $1.8 billion in construction value is no small achievement. I am incredibly proud of our outstanding CPED team and community partners, whose dedication ensures Minneapolis remains a city that people are eager to invest in and call home.”
Half of the highest-valued projects in 2024 are for affordable housing developments, showing the City continues to invest in publicly subsidized homes for residents who need them. The City also permitted smaller, residential projects like kitchen or bath remodels, home additions and more. Over the last several years, this has proven that residents not only want to move to the city but want to improve their homes to stay long term.
"These numbers represent the City’s deep commitment towards addressing the housing crisis,” said Minneapolis City Council President Elliott Payne, Ward 1. “Construction at this scale doesn’t happen at the whim of the market, but through focused and consistent dedication to housing policy that prioritizes the needs of the community.”
“I am very pleased to see the City continuing to invest in publicly subsidized housing for Minneapolis residents,” said City Council Member Jamal Osman, Ward 6. “Buying a home can be a struggle, so it is great to see efforts being made to help people stay in Minneapolis. Homeownership should be achievable for everyone in Minneapolis, and if the City continues investing in its future, that can become a reality for more residents.”
By the numbers, the City of Minneapolis issued 44,574 permits in 2024. There were 640 dwelling units permitted for new construction. The overall value for the year is more than $1.806 billion.
“The exciting part is that this work never stops. There are more significant projects in the future that will continue to build and enhance Minneapolis – for people and our community,” said City Operations Officer Margaret Anderson Kelliher. “It’s an important responsibility to build a future Minneapolis for generations to come.”
“This milestone is a testament to the collaboration and vision of our employees, city leaders, developers and residents, said Community Planning and Economic Development Director Erik Hansen. “As we look ahead, the projects on the horizon promise to continue reshaping Minneapolis into a city that thrives for everyone who chooses to open businesses and call it home."
New York, December 18, 2024 -- Moody's Ratings (Moody's) has upgraded the City of
Minneapolis, MN's issuer rating and the rating on its outstanding General Obligation
Unlimited Tax (GOULT) bonds to Aaa from Aa1. The city had about $900 million in
debt outstanding at the close of fiscal 2023 (December 31 year-end). The outlook has
been revised to stable from positive.
The upgrade to Aaa from Aa1 reflects the continued strength in the city's economic
and demographic trends, a consistently strong financial profile and declining long-term
liabilities.
RATINGS RATIONALE
The Aaa issuer rating reflects the city's position at the center of a large and diverse
regional economy that benefits from consistently low unemployment, strong labor
force participation and a growing full value per capita that now exceeds $160,000. The
Minneapolis economy benefits from several large and stabilizing institutions and
favorable demographic trends with a stable to growing population that remains
relatively young compared to an aging state and nation.
The city has a strong financial profile with an available fund balance ratio that typically
hovers between 45% and 50%. Finances will remain strong despite growing public
safety costs given a stable revenue base, sound financial management including
multi-year budgeting and a track record of the willingness and ability to materially
increase the property tax levy. The long-term liabilities ratio has declined to levels well
below 200%, which is in line with Aaa rated peers, and the fixed costs ratio
consistently hovers around 10%.
The Aaa rating on the GOULT bonds is at the same level as the Aaa issuer rating
because of the city's full faith and credit pledge and the authority to levy a dedicated
property tax unlimited as to rate and amount to pay the bonds.
RATING OUTLOOK
The stable outlook reflects the expectation that the strong regional economy will
continue supporting sound economic metrics and that the city's consistently strong
financial profile will allow it to absorb cost pressures related to employee
compensation and public safety staffing.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Not applicable
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- A weakening of demographic trends or prolonged declines in labor force participation
trends, resident incomes, or full value per capita
- A materially weakened financial profile with an available fund balance ratio
approaching 30%
- A long-term liabilities ratio increasing to levels well above 250%
LEGAL SECURITY
The GOULT bonds are backed by the city's full faith and credit pledge and authority to
levy a dedicated property tax unlimited as to rate and amount. The bonds are
additionally secured by statute.
PROFILE
The City of Minneapolis is located in Hennepin County (Aaa stable) in eastern
Minnesota (Aaa stable) and is directly west of St. Paul, with the Mississippi River
creating the border between the two cities. Minneapolis is the largest city in the state,
with a population that exceeds 420,000 residents. Governmental services primarily
consist of police, fire, health services, public works and general governmental
functions. The city's major enterprise funds include sanitary sewer, stormwater, water
treatment, municipal parking, solid waste and community planning.
The City of Minneapolis has committed nearly $17 million in direct investment, along with $1.5 million in 10-year federal tax credits, to 11 affordable rental housing projects in Minneapolis. The funds are awarded through a competitive request-for-proposal process each year. Both the Affordable Housing Trust Fund Program (AHTF) and the Federal Low Income Housing Tax Credit Program support new construction and the rehabilitation of affordable multifamily rental housing. The City Council approved the awards on Dec. 5.
"Minneapolis is leading the way in affordable housing, with the Affordable Housing Trust Fund playing a central role in our efforts," said Mayor Jacob Frey. "With the support of our amazing housing partners, we’re creating deeply affordable housing at a rate 8.5 times higher than previous years. Safe, affordable housing is a basic right for everyone in Minneapolis, and today’s investment is a reminder that we’re fully committed to making sure that right is a reality for all."
The AHTF was established in 2003 to assist in financing the production and stabilization of affordable and mixed-income rental housing projects with 10 or more units. Twenty percent of the total units need to be affordable and occupied by households at or below 50 percent of the area median income (AMI).
The City received 25 applications requesting $42,600,298 in funding from the AHTF. Proposals were evaluated based on underwriting standards, financial feasibility, location, project readiness, design guidelines and more. The funds are provided as a deferred loan with a 30- to 40-year term.
The 11 projects awarded AHTF funds are as follows:
The City Council also approved the project at 2116 Nicollet Ave. S. for a preliminary reservation of Federal Housing Tax Credits (HTCs) of $1.5 million for its housing additions. This HTC award will generate more than $12 million in equity to support the construction.
“The 2024 AHTF Program will help create or preserve 803 rental housing units across Minneapolis,” said Elfric Porte, director of housing policy and development for the City of Minneapolis. “Mayor Frey has championed producing and preserving affordable housing through the AHTF budget for over a decade. I’m grateful to him and the City Council for again stepping up with a significant $18 million investment in this work.”
S&P Global Ratings assigned its 'AAA' rating to the City of Minneapolis' $123.59 million series 2024 general obligation (GO) bonds, based on the application of its "Methodology for Rating U.S. Governments," published Sept. 9, 2024. At the same time, S&P Global Ratings affirmed its 'AAA' rating on the city's GO debt outstanding. The outlook is stable.
"The 'AAA' rating reflects Minneapolis' highly productive economy and robust tax base, the willingness and ability to increase property taxes to match expenditures, and a management team that consistently has built reserves to a high level by responding to unexpected budgetary changes and forward planning," said S&P Global Ratings credit analyst Jessica Olejak.
The stable outlook reflects the continued stronger revenue recovery, economic growth even with some risks around commercial real estate, and a five-year plan that shows a measured use of reserves and stimulus funds but a return to structurally balanced operations in the next two years with reserves remaining above the fund balance policy.
We could lower the rating if the city draws down its general fund reserves more rapidly than planned, which we believe could signify unanticipated budgetary pressure and would leave less room for fiscal maneuvering in outyear budgets.
Fitch Ratings - Chicago - 18 Sep 2024: Fitch Ratings has assigned a 'AAA' rating to $123,590,000 of general obligation (GO) bonds series 2024 to be issued by the city of Minneapolis, MN.
Proceeds are being used to finance the construction of various assessable public projects, utility system improvements, and other capital projects. The bonds are expected to sell during the week of September 30.
In addition, Fitch has affirmed the 'AAA' ratings on the following city of Minneapolis, MN securities:
--Approximately $813.85 unlimited tax general obligation (ULTGO) bonds;
--Long-Term Issuer Default Rating (IDR).
The Rating Outlook is Stable.
Today Minneapolis Mayor Jacob Frey delivered his 2025 Budget Address in downtown Minneapolis in front of several Council Members, City leaders, and community partners. The mayor’s proposed budget addresses the increased cost of maintaining current City services while continuing to fund core programs, initiatives, and infrastructure important to Minneapolis residents.
In prepared remarks, Mayor Frey outlined his budget proposal which features investments for the City’s workforce, funding for the federal consent decree and state settlement agreement, and continued commitments towards the City’s nation-leading affordable housing work, sustainable climate action, downtown revitalization, and inclusive economic development.
The mayor’s proposed 2025 budget totals $1.88 billion with an 8.1% increase in the tax levy.
“What we are providing through this budget is a way through. We’re doubling down and investing in programs that work for the long haul, we’re ensuring our resources are used effectively, and we’re making sure our community will see the benefits,” said Mayor Frey.
“These investments are aligned with the values I’ve had since day one, and a difficult budgetary cycle doesn’t mute the core values guiding our shared work.,” Mayor Frey continued.
“Our planet demands work to reduce carbon output, and in Minneapolis we can take steps to deliver. People need the stability of a home, and in Minneapolis, we can continue leading the nation in providing affordable housing. Our streets need to be safe, and in Minneapolis, we can do both innovative and honest work to make that happen.”
Mayor Frey’s budget reflects a commitment to maximizing City resources. Inflation and significantly higher but necessary labor costs have increased the cost of delivering excellent City services. The spending down of American Rescue Plan Act (ARPA) funds and a reduced valuation of office buildings have shifted the impact of those costs to homeowners and renters through increased property taxes.
To address these realities without cutting essential city services, the City has:
Multiple other levies factor into the City's overall property tax levy, including independent boards like the Minneapolis Park and Recreation Board, the Municipal Building Commission, and the Minneapolis Public Housing Authority.
The City of Minneapolis' 'AAA' IDR and GO ratings reflect the city's 'aaa' financial resilience given a 'high midrange' level of budgetary flexibility and Fitch's expectations that general fund reserves will be maintained at or above 10% of spending and transfers out. The ratings also incorporate 'strong' demographic level metrics driven by high levels of educational attainment and a history of relatively low unemployment rates and a 'midrange' long-term liability composite. The ratings also reflect the application of a +1 notch additional analytical factor for economic and institutional strength due to the city's role as a vital component of the Minneapolis-St. Paul-Bloomington metropolitan statistical area (MSA), which contributes 1.4% to U.S. GDP.
--Sustained declines in financial resilience leading to general fund reserves falling to below 10% of spending and transfers out;
--Marked deterioration of demographic and economic metrics;
--Material increase in long-term liabilities assuming current levels of personal income, governmental revenues and spending.
--Not applicable given the 'AAA' ratings.
The bonds are general obligations of the city, backed by the city's full faith and credit and unlimited ad valorem taxing power. To pay debt service, the city is obligated to levy a tax without limit as to rate or amount on all taxable property within the city.
The Local Government Rating Model generates Model Implied Ratings which communicate the issuer's credit quality relative to Fitch's local government rating portfolio (the Model Implied Rating will be the IDR except in certain circumstances explained in the applicable criteria). The Model Implied Rating is expressed via a numerical value calibrated to Fitch's long-term rating scale that ranges from 10.0 or higher ('AAA'), 9.0 ('AA+'), 8.0 ('AA'), and so forth down to 1.0 ('BBB-' and below).
Model Implied Ratings reflect the combination of issuer-specific metrics and assessments to generate a Metric Profile, and a structured framework to account for Additional Analytical Factors not captured in the Metric Profile that can either mitigate or exacerbate credit risks. Additional Analytical Factors are reflected in notching from the Metric Profile and are capped at +/-3 notches.
Minneapolis Model Implied Rating: 'AAA' (Numerical Value: 11.27)
-- Metric Profile: 'AAA' (Numerical Value: 10.27)
-- Net Additional Analytical Factor Notching: +1.0
Individual Additional Analytical Notching Factors:
-- Economic and Institutional Strength: +1.0
Minneapolis' Model Implied Rating is 'AAA'. The associated numerical value of 11.27 is at the upper end of the range for its current 'AAA' rating.
Minneapolis' financial resilience is driven by the combination of its 'High' revenue control assessment and 'Midrange' expenditure control assessment, culminating in a 'High Midrange' budgetary flexibility assessment.
-- Revenue control assessment: High
-- Expenditure control assessment: Midrange
-- Budgetary flexibility assessment: High Midrange
-- Minimum fund balance for current financial resilience assessment: >=10.0%
-- Current year fund balance to expenditure ratio: 30.9% (2022)
-- Five-year low fund balance to expenditure ratio: 20.7% (2022)
Revenue Volatility - 'Strongest'
Minneapolis' weakest historic three-year revenue performance is neutral to the Model Implied Rating.
The revenue volatility metric is an estimate of potential revenue volatility based on the issuer's historical experience relative to the median for the Fitch-rated local government portfolio. The metric helps to differentiate issuers by the scale of revenue loss that would have to be addressed through revenue raising, cost controls or utilization of reserves through economic cycles.
-- Lowest three-year revenue performance (based on revenues dating back to 2005): 3.0% increase for the three-year period ending fiscal 2015
-- Median issuer decline: -4.7% (2022)
Population Trend - 'Midrange'
Based on the median of 10-year annual percentage change in population, Minneapolis' population trend is assessed as 'Midrange'.
Population trend: 1.0% Analyst Input (53rd percentile) (vs. 1.0% 2021 median of 10-year annual percentage change in population)
Unemployment, Educational Attainment and MHI Level - 'Strong'
The overall strength of Minneapolis' demographic and economic level indicators (unemployment rate, educational attainment, median household income [MHI]) in 2022 are assessed as 'Strong' on a composite basis, performing at the 74th percentile of Fitch's local government rating portfolio. This is due to very high education attainment levels and very low unemployment rate offsetting midrange median-issuer indexed adjusted MHI.
-- Unemployment rate as a percentage of national rate: 75.0% Analyst Input (83rd percentile) (vs. 69.4% 2022), relative to the national rate of 3.6%
-- Percent of population with a bachelor's degree or higher: 53.5% Analyst Input (91st percentile) (vs. 52.6% 2021 Actual)
-- MHI as a percent of the portfolio median: 97.9% Analyst Input (47th percentile) (vs. 98.1% 2021 Actual)
Economic Concentration and Population Size - 'Strongest'
Minneapolis' population in 2021 was of sufficient size and the economy was sufficiently diversified to qualify for Fitch's highest overall size/diversification category.
The composite metric acts asymmetrically, with most issuers (above the 15th percentile for each metric) sufficiently diversified to minimize risks associated with small population and economic concentration. Downward effects of the metric on the Metric Profile are most pronounced for the least economically diverse issuers (in the 5th percentile for the metric or lower). The economic concentration percentage shown below is defined as the sum of the absolute deviation of the percentage of personal income by major economic sectors relative to the U.S. distribution.
-- Population size: 422,003 Analyst Input (above the 15th percentile) (vs. 427,806 2021 Actual)
-- Economic concentration: 32.2% Analyst Input (above the 15th percentile) (vs. 32.8% 2022 Actual)
Demographic and Economic Strength Additional Analytical Factors and Notching: +1.0 notch (for Economic and Institutional Strength)
Minneapolis is a vital component of the Minneapolis-St. Paul-Bloomington MSA, the 15th largest MSA in the country in terms of GDP contribution at 1.4% of U.S. GDP as of 2022. The city is home to several large corporation headquarters and is an important contributor to the MSA which had job levels of approximately 2 million in May 2024, according to the Bureau of Labor Statistics.
The most recently available data was used for demographic and economic metrics.
Long-Term Liability Burden - 'Midrange'
Minneapolis' liabilities to governmental revenue remain strong while carrying costs to governmental expenditures and liabilities to personal income remain midrange. The long-term liability composite metric in 2022 is at the 58th percentile, roughly in line with Fitch's local government rating portfolio.
-- Liabilities to personal income: 4.5% Analyst Input (58th percentile) (vs. 4.9% 2022 Actual)
-- Liabilities to governmental revenue: 155.8% Analyst Input (61st percentile) (vs. 168.4% 2022 Actual)
-- Carrying costs to governmental expenditures: 14.0% (2022) (56th percentile)
Direct debt was adjusted with debt issued and amortized since the most recently available audit (2022).
Analyst inputs reflect new debt issued and debt amortized in fiscal 2023.
Minneapolis is the largest city in the state of Minnesota. Population growth has been strong as educated, younger workers have been attracted to the diverse employment opportunities in the city, as well as to the city's amenities and cultural attractions and easy commutability. Along with its sister city of St. Paul, Minneapolis forms the core for the second-largest economic center in the U.S. Midwest, after Chicago.
The city's broad and diverse economic base benefits from major employers in the stable health care, higher education and state and county government sectors. Minneapolis's economy is very diverse. Major employers include entities in health care, banking, higher education and the retail trade. The city also includes a significant public-sector sector given the proximity of the state government.
The five largest employers in the city are the University of Minnesota (17,691), Allina Health (10,856), Target Corporation (8,500), the Hennepin Health Care (7,111) and Wells Fargo Bank (7,000).
On Friday, Mayor Frey and Council Member Katie Cashman were joined by City leadership to celebrate the City’s 100th electric vehicle going into service. The Minneapolis Public Works Department is driving an ambitious Green Fleets policy geared toward creating a zero-emission fleet. This initiative is just one part of the Climate Equity Plan, which is the City’s plan to reach its accelerated, equitable, and aggressive climate goals over the next ten years.
“Climate change is an undeniable fact, and it’s on us to urgently address it,” said Mayor Jacob Frey. “Today’s launch of our fleet’s 100th electric vehicle marks a significant milestone on our path to becoming a carbon-neutral city. This initiative—along with our other Climate Legacy Initiative projects—is an investment in our environment, an investment in the health of our residents, an investment in sustainability, and, most importantly, it’s an investment in the future of Minneapolis. We are not just talking about change; we are making it happen.”
"Minneapolis is nationally recognized for its natural amenities. We’ve made it our mission to protect that reputation and take climate action through our city’s operations," said Margaret Anderson Kelliher, City Operations Officer. "I’m so proud to mark this milestone for our staff and for the residents they serve. By continuing to electrify our fleet, we’re investing in a more durable, sustainable future not just for our planet but our workforce.”
The City’s commitment to converting its fleet to all electric vehicles will continue to ramp up in the second half of 2024. While 100 electric vehicles are now operating on city streets, 41 additional vehicles have been delivered and are being outfitted for service with 11 more on order. In addition, 49 fleet charging stations have been installed across city operations with another 43 scheduled to be installed this year.
The City’s new Climate Equity Plan, provides a roadmap for climate work over the next decade, including initiatives like the City’s all-electric fleet. The Plan is funding by the mayor’s Climate Legacy Initiative. Beginning with Mayor Frey’s 2024 budget, $10 million will be invested each year to the CLI, which triples previous climate work investments. The community-wide plan sets a goal to significantly reduce climate pollution by 2030 and become carbon neutral by 2050. It also envisions action to weatherize all homes, reduce utility bills, promote green job training, and plant more trees.
“As a Council Member, I hear about the need for strong climate action and investments in our resilience and our future. But I also hear from constituents about day-to-day noise pollution, whether it’s from speeding cars on the parkways around the lakes, honking traffic on i-94 or even their neighbors’ leaf blowers in the fall,” said Minneapolis Council Member Katie Cashman, who represents ward seven and is chair of the Climate & Infrastructure committee. “Electrifying our city vehicles is not just about air pollution reduction, it’s also about noise pollution reduction and making our city more pleasant and livable."
Air pollution is linked to increased rates of cancer, heart and lung disease, asthma and allergies. Carbon dioxide pollution, a greenhouse gas, causes climate change. Cars and trucks are the largest contributor of air pollution within Minneapolis and are a significant source of greenhouse gases.
“Today, we are a part of one of the many incredible stories going on across this city,” said Patrick Hanlon, Minneapolis Health Department Deputy Commissioner of Sustainability, Healthy Homes and Environment. “We started with a few projects scattered across the city, and we are now investing in hundreds of clean energy projects each year that are saving people money and improving our environmental quality. As environmental and public health professionals, it feels good to work in a city that reinvests in its community in this space.”
The trophy case at the City of Minneapolis is filling up, thanks to national recognition for an array of features that make the City of Lakes a destination for visitors and a source of pride for residents.
Recent recognitions include:
“Minneapolis is cruising into the summer and racking up some major wins,” said Mayor Jacob Frey. “While we all know our parks are special, our arts scene is unique, and our people are happy, seeing Minneapolis top all these national lists puts a serious hop in our collective step. Our city is on a roll, and we all have to lean into the positive accolades to keep the momentum going.”
The destination feel of the city was in full force this past weekend, when hundreds of thousands of people descended on downtown for “Gymnastics City USA” and Pride events. City teams report all events were safe and successful because of increased traffic control and true collaboration between city teams and downtown businesses.
Nicollet Mall was transformed into Promenade du Nord, an ode to all things Paris where athletes will compete in the Summer Games. As part of a citywide effort to revitalize downtown, city leaders are exploring the conversion of Nicollet Mall into a pedestrian only zone, along with options for directing transit service elsewhere through downtown.
The bustle will continue as Minneapolis hosts the Taste of Minnesota this weekend and Aquatennial celebrations July 24-July 27.
For the second year in a row, Minneapolis is ranked number one in biking out of 2,300 cities in the U.S. in the PeopleForBikes’ seventh annual City Ratings, in addition to having one of the best new U.S. bike lanes of 2023. The city’s neighbor, St. Paul, ranked fourth. Cities are measured by the quality and connectivity of its bike network based on safe speeds, protected bike lanes, reallocated road space, intersection safety, network connections and trusted data. Minneapolis boasts 25 miles of on-street protected bikeways and 111 miles of off-street bikeways and trails for residents and visitors to enjoy. In fact, to keep up with demand, the City of Minneapolis is even hiring a bike coordinator.
“Biking is one of the most popular ways people get around the city, and we couldn’t be prouder of this distinction – for two years running,” said Jenifer Hager, director of transportation planning & programming for the City of Minneapolis. “Our bike share program and trail systems are some of the best in the country. Pedaling through Minneapolis is a great way to see the city and spend the day.”
